Monday, August 03, 2009

Putting Opposition To Cash For Clunkers In Perspective

Reporting on the CAR Allowance Rebate System (CARS), the hugely successful government program known informally as Cash for Clunkers, which gives American drivers either $3500 or $4500 to trade in their old, fuel-inefficient vehicle for a new more efficient one, David Lightman of McClatchy Newspapers writes that "Senate Republican leaders railed against it Monday, calling the program a model of government inefficiency and out-of-control spending. The program originally got $1 billion, but all but exhausted that funding last week, its first. The House of Representatives approved another $2 billion on Friday, but the Senate is balking."

In news only seemingly unrelated, the Guardian reports that Bank of America has agreed to pay a $33m fine to settle "a prosecution by US regulators for keeping investors in the dark over billions of dollars of bonuses paid to Merrill Lynch bankers in the wake of a $50bn merger with the Wall Street brokerage last year." How many billions exactly? In defining the merger, "Bank of America had already agreed to payouts of up to $5.8bn to Merrill's bankers. A sum of $3.6bn was eventually paid out despite losses at Merrill of $27.6bn for 2008." The problem? TARP funds were used to finance the acquisition (and, indirectly, to pay for the billions of dollars in bonuses.)

So, to recap and to put things in due perspective: Senate Republican leaders rail against a government program that, not quite indirectly, does provide a much needed stimulus to the auto industry, in addition to beneficial effects for the environment, and higher safety for American drivers (given the fact that many newer vehicles have better safety standards than the old ones they are replacing.) Perhaps my memory fails me, but I don't remember Republican Senate leaders railing against the use of government funds when Bank of America used them to pay billions of dollars in bonuses to newly acquired Merrill Lynch employees.

If you ask me, Dickipedia needs to make room for more members, ASAP.

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