Economy needed the push ‘Clunkers’ gave it

Terry E. Peele, Las Vegas

Wednesday, Aug. 12, 2009 | 2:04 a.m.

Mark E. McKenzie, in his letter published Sunday, takes letter writer Robert Blanner to task for his defense of the “Cash for Clunkers” program.

McKenzie’s point is that the program takes money from taxpayer “Joe” and gives it to “Jane.” He claims Jane, the car dealership, the manufacturers, and the autoworkers are better off while Joe has less money to spend at the butcher, baker and candlestick maker. Let’s look beneath the surface of Mr. McKenzie’s logic.

Jane’s purchase of a new car has produced local tax revenue. The dealership has made a profit and the salesperson has secured a commission. This sale has produced revenue that can be spent at the butcher, baker and candlestick maker. This amount of money moving in the economy certainly makes Joe’s individual loss a wash.

Then there is the fact that there is one less car in the inventory of the manufacturer. Once the large inventories are depleted, increased production will begin. This increased production will put autoworkers who have been laid off back to work. Once again more money to be spent at the butcher, baker and candlestick maker.

Mr. McKenzie concludes by asking why automakers are more deserving than the butcher and friends. The answer is: They aren’t. Yet the fact remains that the auto industry has been the foundation upon which our standard of living has been built for years. In this instance, if we raise the tide for the auto industry, the boats containing the butcher and his friends will also rise.