Commentary

Is the industrial Midwest really that different from the rest of the U.S.?

Judging by the unrelenting attacks on the recent “Cash for Clunkers” program, it seems like it. Those of us in flyover land feel more like an isolated tribe in the Amazonian rainforest than Americans simply struggling through the worst recession in the last 40 years.

We think the recently ended Cash for Clunkers program, which offered consumers up to $4,500 in federal stimulus money to trade in an old gas guzzler for a new more fuel-efficient model, was a wildly successful idea.

It generated nearly 700,000 new-car sales during a time when the market was at historic lows. It reinvigorated struggling car dealerships and thousands of other small businesses that supply dealerships and auto plants.

And it put thousands of auto workers back on the job to build up empty new-product inventories that will take months to refill.

Cash for Clunkers created real forward momentum in the nation’s stalled manufacturing sector. The White House estimates the program will save 42,000 jobs in the year’s second half.

Most importantly, the program created hope in a region devastated by the nation’s highest unemployment rate. Hope that a seasonally adjusted annual vehicle sales rate running 50% below the 20-year average for the past 10 months will create huge pent-up demand for new vehicles. Hope there is light at the end of the tunnel.

But these are merely the naïve beliefs of the primitive people of flyover land. People who put food on the table by building bright, shiny objects, such as cars and washing machines.

Meanwhile, the left-wing zealots and right-wing ideologues on the coasts and in the nation’s capital are determined to characterize the program as a failure. They don’t like the people of flyover land. They wish their smoky factories and stubborn unions would just go away.

Environmentalists, who normally never bring up cost when they are talking about hybrid-electric vehicles or buying electricity generated by solar panels instead of coal, say it was “too expensive” even though the program represented an increase in average fuel economy of 9.2 mpg (25.5 L/100 km), or 58%.

Meanwhile, many Republicans want to treat the handling of the program’s paperwork as if it were a dry run for government administration of a universal healthcare system. They want Cash for Clunkers to be a failure for selfish political ends.

The only mistake the Obama Admin. made with Cash for Clunkers was it did not assume the $3 billion program would create a stampede of new-vehicle buyers. That was a prudent choice, considering Congress gave Wall Street $780 billion and the people of flyover land saw nothing from it.

The White House says the program will boost economic growth in the third quarter by 0.3 to 0.4 percentage points due to increased sales and fourth-quarter production increases from auto makers replacing depleted inventories.

As the nation’s economy picks up steam, the people of flyover land are stoking the boiler and oiling the gears of the nation’s key engine of recovery. Cash for Clunkers made it possible for more of them to keep working.

dwinter@wardsauto.com