I run and invest in expert services businesses. I write about how to grow them here: https://xitter.cf/t.co/72DFWbTxrz / Scalable Video Editing: https://xitter.cf/t.co/4uKaEvERnR.
Austin, TX
Joined August 2008
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I think part of the issue, besides just wanting to hate on anything Obama, is large numbers aren't intuitive.
A one-time 677k seems like a huge number until it is put into context of 35m to 40m used cars sold annually in the US.
My daughter has assembled a group of young mothers to hang out with each other in order to have a circle of women who want multiple kids.
As soon as one gets pregnant in the group it seems like dominos falling through it.
We don’t have to guess. The data shows it didn’t affect prices because ultimately 500k light trucks, suvs and minivans was too small of a number compared to the 35 million used vehicles sold each year.
The lack of enough new cars sold since 2007 and money printing since 2020 raised used car prices.
The number of vehicles destroyed was too small and had no short term or long term effect on used car prices.
Historical data shows this to be true and the claim that used car prices are high today because of cash for clunkers is false.
Total money printing (ie inflation) was accounted for.
The relatively small amount of money from C4C didn’t drive up new or used car prices in late 09/early ‘10.
The biggest impact on used car prices came from the missing 19m new cars that were never bought so they were never added to the market.
For the years of F150s destroyed (20k) in C4C, they were about 0.6% of all sold for those ‘90s years.
Approx 60% of the 3 million ‘90s F150s sold have been scrapped by now.
Every model destroyed in the program are similar percentages of total sold.
The total number of scrapped vehicles in 09 including the 667k C4C was 2m lower than the annual norm.
All vehicle market data shows that C4C did not and could not affect long term prices.
19 million new cars never sold from 2008 to 2013 slowly increased used car prices until 2020. Then money printer went stratospheric and prices jumped.
The 10 million + new cars that haven’t been purchased since 2020 are keeping used car supply stunted.
Remedial Econ:
30 million new automobiles never sold is the reason why used car prices went up.
And, it wasn’t until the US govt increased the money supply by 40% starting in 2020 that used car prices skyrocketed.
Everyone who blames cash for clunkers for today’s high used car prices either has 1) never looked at the data or 2) doesn’t understand economics.
xitter.cf/TimConley/status/20455…
1. The number scrapped was too small to affect the market. It didn’t even bring the annual scrappage number back up to normal.
2. 90%+ would have been scrapped within 15 years as they were already old cars.
3. The 19 million cars not sold from 09 to 13 and the 10m+ not sold since 2020 decimated the used car market as not enough new cars were sold to add more used cars.
4. Nominal price didn’t spike until 2020 onward due to money supply skyrocketing.
Ultimately, 600k cars is a tiny percentage of the market and could not have affected prices.
I’m sure the sexual revolution had an impact on sewing, but the biggest impact happened when apparel manufacturers modernized and offshored in the late 1970s.
As a kid from a poor family a significant portion of my clothes were homemade.
But then it suddenly became far cheaper to buy than make.
Even being poor, mending became unnecessary. Don’t need to sew socks when a 10 pack of tube socks could be bought for a few dollars.
Sewing stopped being a necessity for 10s of millions of families.
I think the distribution is the moat idea is pre-cope.
If software hasn’t already become an incumbent within the next couple of years, its value proposition will be eaten by AI. And even then I don’t know how long their distribution will last.
Companies that build eyeball aggregation will have the longest durability, but even that could be chipped away by LLMs distributing to their users directly in the way Google has been bypassing creators in search.
Everyone who blames cash for clunkers for today’s high used car prices either has 1) never looked at the data or 2) doesn’t understand economics.
xitter.cf/TimConley/status/20455…
Obama's Cash For Clunkers destroyed the used car market and skyrocketed prices?
Let's see what the data tells us happened to used car prices.
The number one factor that initially drove up used car prices was the missing 18.8 million new cars that Americans didn't buy between 2007 and 2014.
You can see that the new cars not sold in the red shaded area impacts the nominal price because there aren't enough used cars hitting the market each year. This has an immediate and lagging effect.
Next biggest impact comes in 2020 when our government flooded the market with freshly printed dollars and millions of new cars that normally would have been purchased. Again, putting fewer used cars into the market.
Now let's talk about Cash for Clunkers and the 677,081 vehicles it destroyed. As you can see it was a blip on the used car market. It was such a low number that it didn't even raise the scrappage line (purple) back up to its normal level.
Between 12m to 15m cars and light trucks are scrapped/retired every year. That's a 3 million swing in volume in any given year. That swing would have a bigger effect on used car prices in a given year than Cash for Clunkers.
Finally, there's exported used cars. I lumped official export data with the government's estimated grey and black market volume. More than double the number of C4C is moved outside the US every year.
So next time someone tries to claim Obama and Cash for Clunkers destroyed the used car market, just show them this chart.
I compiled this data from various government sources on used car market since no one has put these numbers together.
C4C had no impact on the used car market.
xitter.cf/TimConley/status/20455…
Obama's Cash For Clunkers destroyed the used car market and skyrocketed prices?
Let's see what the data tells us happened to used car prices.
The number one factor that initially drove up used car prices was the missing 18.8 million new cars that Americans didn't buy between 2007 and 2014.
You can see that the new cars not sold in the red shaded area impacts the nominal price because there aren't enough used cars hitting the market each year. This has an immediate and lagging effect.
Next biggest impact comes in 2020 when our government flooded the market with freshly printed dollars and millions of new cars that normally would have been purchased. Again, putting fewer used cars into the market.
Now let's talk about Cash for Clunkers and the 677,081 vehicles it destroyed. As you can see it was a blip on the used car market. It was such a low number that it didn't even raise the scrappage line (purple) back up to its normal level.
Between 12m to 15m cars and light trucks are scrapped/retired every year. That's a 3 million swing in volume in any given year. That swing would have a bigger effect on used car prices in a given year than Cash for Clunkers.
Finally, there's exported used cars. I lumped official export data with the government's estimated grey and black market volume. More than double the number of C4C is moved outside the US every year.
So next time someone tries to claim Obama and Cash for Clunkers destroyed the used car market, just show them this chart.
I compiled this data from various government sources on used car market since no one has put these numbers together.
US has been dolling out an extra $2T for the past 6 years.
Nearly half of US economy is dependent on jobs where money is funneled down from government subsidies and money printing.
We would have hyperinflation if the rest of the world wasn't dependent on the US dollar.
You’re changing the typical argument of UBI, which is a welfare system.
Alaska is a good example of inflation. The extra money doesn’t afford people more goods or services as it’s an import driven economy where prices adjust to meet demand. If they could produce locally then their local economy could grow as the money stays instead of being sent outside the state.
At no point does UBI make sense. You have to pretend humans will suddenly evolve to behave differently.
You give large swaths of people free money and they become envious and resentful at best and violent, drug-addled criminals at worst.
The humans in government won’t change either. They’ll print money faster than abundance can lower inflation. The governments will need that money to be authoritarian enough to keep UBI universal.