The Senate voted yesterday 71-26 to give tax breaks to Americans who buy new cars. They don’t have to be PHEVs, EVs or even cars that just get better than average gas mileage. No, nearly any new car will do. The amendment to the already bloated, Senate version of the economic stimulus bill was proposed by Senator Barbara Mikulski D-Md. According to the amendment anyone purchasing a passenger car, minivan or light truck between November 12, 2008 (that’s right it’s a retroactive tax cut!) and December 31, 2009 would be entitled to an income tax rebate on their sales or excise tax as well as on the interest on their loan. Individual buyers earning up to $125,000 and couples making up to $250,000 would be able to take the sales tax on the first $49,500 of a car’s price off of their federal income taxes.
Senate Finance Chairman Max Baucus D-Mt, who opposed the measure, estimated that it would add $11 billion to the Senate version of the stimulus bill raising it’s total price tax to almost 900 billion.
Can anyone conceive of a more stupid piece of legislation? Just as has happened with the finance and banking sectors, the American taxpayer has poured billions of dollars into the American automobile industry, while getting next to nothing in return. This legislation does nothing to change that. It does nothing to stop the idiotic way that the Detroit automotive manufacturers have operated. Rather it encourages them to continue business as usual, and Americans to buy the same old inefficient, polluting cars that threatens us with climate disaster. As those of us on the climate-left have been arguing and as Obama himself has said on many an occasion, this stimulus bill, is supposed to be a green stimulus bill. It is supposed to stimulate the economy while also beginning the fundamental process of converting it to one that is sustainable and green. The stimulus bill and the climate bill to come are supposed to work in tandem to save both our economic system and our climatological one.
Yet so far, there are few signs that that is what is going to happen. Like the Wall Street bailout, the Stimulus Bill is threatening to become just another way to take money from the pockets of the American taxpayer (actually the American taxpayer’s grandchildren and great-grandchildren) and transfer it to the corporate incompetents who created the messes, both financial and climatological, in which we find ourselves.
As Paul Krugman wrote a couple of days ago:
When I read recent remarks on financial policy by top Obama administration officials, I feel as if I’ve entered a time warp — as if it’s still 2005, Alan Greenspan is still the maestro, and bankers are still heroes of capitalism.
“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” says Timothy Geithner, the Treasury secretary — as he prepares to put taxpayers on the hook for that system’s immense losses.
Meanwhile, a Washington Post report based on administration sources says that Geithner and Lawrence Summers, President Barack Obama’s top economic adviser, “think governments make poor bank managers” — as opposed, presumably, to the private-sector geniuses who managed to lose more than a trillion dollars in the space of a few years.
And this prejudice in favor of private control, even when the government is putting up all the money, seems to be warping the administration’s response to the financial crisis.
You might think, then, that if banks currently can’t or won’t raise enough capital from private investors, the government should do what a private investor would: Provide capital in return for partial ownership.
But bank stocks are worth so little these days — Citigroup and Bank of America have a combined market value of only $52 billion — that the ownership wouldn’t be partial: Pumping in enough taxpayer money to make the banks sound would, in effect, turn them into publicly owned enterprises.
My response to this prospect is: So? If taxpayers are footing the bill for rescuing the banks, why shouldn’t they get ownership, at least until private buyers can be found? But the Obama administration appears to be tying itself in knots to avoid this outcome.
There’s more at stake here than fairness, although that matters, too. Saving the economy is going to be very expensive: That $800 billion stimulus plan is probably just a down payment, and rescuing the financial system, even if it’s done right, is going to cost hundreds of billions more. We can’t afford to squander money giving huge windfalls to banks and their executives, merely to preserve the illusion of private ownership.
As regards the automobile industry, Micheal Moore has argued, correctly, that the best thing the government could do is to nationalize it.
These auto execs don’t deserve a dime. Fire all of them, and take over the industry for the good of the workers, the country and the planet.
…I care about what happens with the Big Three because they are more responsible than almost anyone for the destruction of our fragile atmosphere and the daily melting of our polar ice caps [actually, it’s coal, Michael, but we can talk about that later. You’re right, though, that that the Big Three CEOs are major villains in the Climaticide story].
Congress must save the industrial infrastructure that these companies control and the jobs they create. And it must save the world from the internal-combustion engine. This great, vast manufacturing network can redeem itself by building mass transit and electric/hybrid cars and the kind of transportation we need for the 21st century. [trains, why, in hell, isn’t Detroit building high-speed, electric trains?–JR] [emphasis–JR]
The point that both Krugman and Moore are making is that we are shelling out huge sums on these bailout and stimulus plans, sums that, if they are wasted (is there any doubt that to a great extent they already have been?), will have done nothing to fundamentally change the economic system that has brought us to the verge of financial collapse and civilization-killing Climaticide.
When we finally do decide to become serious about changing that economic system and stopping global warming (things that cannot be done in isolation) we may not have the resources to do what is necessary because we will have already frittered that money away on precipitous, poorly monitored schemes for saving incompetent and morally bankrupt CEOs, tax cuts that do nothing to promote modern, green infrastructure and and asinine measures such as that proposed by Senator Mikulski, which prop-up our current, failed system and pander to the ignorant voters who have yet to understand that what is at stake here is not just their jobs, but where they will be able to live, how likely they will be to die of heat stroke, exotic diseases and famine, and whether they will go to war over ever scarcer basic necessities such as food and water.