Rapidly Increasing Price Of Used Cars And Older Car Parts

Have you like many, many Americans found yourself needing to replace your car but can't afford new car prices? Of course, the solution is to keep repairing your current one or buy a better used car, right? Hmmmmm. Not so fast.

There's a new report out describing how used car prices and car repair parts prices have skyrocketed the past year or so. Why do you suppose that is? Look no farther than President Obama's "Cash For Clunkers" program from two years ago.

That program gave people cash for their old cars so they could then buy new cars. The administration wanted to prop up the auto industry (while many of us said they should just be allowed to go through reorganization bankruptcy). What did they do with those used cars that were turned in? Remember, they scrapped all of them! Those cars and the parts they could have provided for future car repairs were permanently removed from the market. Fewer used cars and parts => higher prices for used cars and parts.

Who was helped by that clunkers program? Mainly the middle class who couldn't afford a new car otherwise. Who was hurt the most? Those among us with incomes below the poverty level. We haven't been able to afford new cars for a long time. Now we can't afford to buy used cars or to repair our current ones either ones thanks mostly to that clunkers program. Basically, that program made those below the poverty line subsidize (by way of paying more for used cars and parts) car purchases by those above the poverty line. That sounds like redistribution of wealth all right. From those below the poverty line to the more affluent.

The fact that GM went through bankruptcy ANYWAY seems lost on most people who support this administration. We were sold this "clunkers" and "bailouts" bills of goods based on the argument that not doing those and allowing GM bankruptcy would be a disaster for our country. But many of us said reorganization bankruptcy was exactly(!) what they needed so they could get out from unaffordable contracts. We citizens poured all that money into the auto industry and GM went bankrupt anyway. Where exactly did all our auto bailout money go then? (Not where you think but that's a subject for another day.)

This is the kind of stuff that happens when the government nonsensically involves itself in our country's economic activities. They CANNOT do a better job than the private sector left to its own devices. And this administration is NOT the friend of the economically disadvantaged Americans that most people think they are or that this administration likes to claim. It's just like health care reform. The reform a vast majority of Americans wanted was a lower cost of health care. What we got was a higher cost of health care because this administration had a progressive agenda to fulfill rather than what we wanted. Who can afford $10,000/year in health care premiums and deductables? I can't! Any more than I can afford even a used car now.

By the way, many of us said at the time the clunkers program was implemented what would happen with used car and parts prices and I blogged about it. Sorry to say, I told you so!