Commentors on last week's post on Cash for Clunkers have argued that the newly-expanded program is better than other government subsidies because of its positive environmental effects. So I did a little research and it turns out that the “green” benefits of this program may be wildly overblown.

Washington is about to spend another $2 billion on cash for clunkers. I wish, instead, lawmakers would declare the program’s first $1 billion a roaring success, take a deep bow, and move on.
In fact, the first $1 billion was not a total failure. It did get help bring auto inventories down, especially for small cars, and, as intended, it took some gas guzzlers off the road.

If there are any ranches in Detroit, President Obama has just bet one on his yet-unborn plan to cap greenhouse gasses. Obama has effectively ordered GM and Chrysler to build more fuel-efficient cars in return for billions more in federal bailout money. But will enough people buy those cars with gas at $2-a-gallon to make this a successful strategy?

George Bush just spent $13.4 billion of your money to kick the automaker mess into the Obama Administration. Funny how easily so many billions slip through our fingers these days.
Seemingly unable to decide whether to let Chrysler and GM reorganize in bankruptcy or engineer a full-blown government bailout of the deeply troubled automakers, President Bush tried to split the difference. He is offering a $17.4 billion loan–$13.4 billion upfront and another $4 billion in February. The deal is filled with demands for cosmetic concessions such as limits on executive comp and corporate jets—none of which are financially meaningful in any way. The White House calls this a loan, but don’t count on a dime ever being repaid.

The headlines today say Chrysler has asked Congress for a bridge loan of $7 billion on top of the $8.5 billion it already requested to subsidize development of fuel efficient cars. But it is not exactly Chrysler that is asking for the money. Rather it is its majority shareholder: the private equity firm Cerberus Capital Management. Thus I cannot help but wonder whether the true beneficiaries of this transaction will be Cerberus and its partners rather than Chrysler’s workers, suppliers, and dealers.

The debate over bailing out the auto industry is producing a veritable fleet of Pinto-like policy prescriptions. And they get worse by the day.
First, an aide to Barack Obama hints the President-elect is considering an auto czar who'd have the authority to force the industry to retool in return for billions in taxpayer assistance. The Russian image is a good start, but the czar thing may be historically premature. Maybe better to call him the Commissar of Cars.