Cramer on BloggingStocks: Don't Hit the Brakes on 'Cash for Clunkers'
TheStreet.com's Jim Cramer says critics of the program don't understand the simple good it does.
The Wall Street Journal's editorial page launches an attack of the Cash for Clunkers campaign today, noting that we are destroying perfectly good cars for no reason and giving away thousands of dollars only to increase the federal deficit. We should give vouchers for all sorts of goodies if we are going to go down this route, they cynically point out, and they label it a Democratic giveaway.
First, let me say that if the government gives away $4 billion or $5 billion on this one, big deal. We have supported every cockamamie military project, every bogus part of stimulus -- ours amounts more to a giveaway to the only secure workers in this country (state and local employees) with a minimum of stimulus for infrastructure -- so what's wrong with one that actually mimics the successful Chinese program of forcing consumers to spend?
Second, we have kept the autos on life support, as GM (Cramer's Take) and Chrysler are gigantic welfare programs to keep people in jobs and avoid a further drop in employment. This program at least gives them something to do and something to make and doesn't just have them do nothing. The production of cars still takes a huge number of people, and this program has great spillover.
Third, this spurt in sales allows Ford (NYSE: F) (Cramer's Take), the most important auto company with the best lineup of fuel-efficient cars, to close its billion-dollar cash burn and do more refinancing and perhaps equity offerings to get that company to be the leading car builder, perhaps in the world. We should be saluting that.
Fourth, the environment will be cleaner. I still don't know what's wrong with that, as we should not presume that all cars turned in are at the upper limit of 18 mpg. We are doing something good against global warming, too. The Journal dismisses that part of the initiative, of course.
Cramer on BloggingStocks: Don't Hit the Brakes on 'Cash for Clunkers' - BloggingStocks
The Wall Street Journal's editorial page launches an attack of the Cash for Clunkers campaign today, noting that we are destroying perfectly good cars for no reason and giving away thousands of dollars only to increase the federal deficit. We should give vouchers for all sorts of goodies if we are going to go down this route, they cynically point out, and they label it a Democratic giveaway.
First, let me say that if the government gives away $4 billion or $5 billion on this one, big deal. We have supported every cockamamie military project, every bogus part of stimulus -- ours amounts more to a giveaway to the only secure workers in this country (state and local employees) with a minimum of stimulus for infrastructure -- so what's wrong with one that actually mimics the successful Chinese program of forcing consumers to spend?
Second, we have kept the autos on life support, as GM (Cramer's Take) and Chrysler are gigantic welfare programs to keep people in jobs and avoid a further drop in employment. This program at least gives them something to do and something to make and doesn't just have them do nothing. The production of cars still takes a huge number of people, and this program has great spillover.
Third, this spurt in sales allows Ford (NYSE: F) (Cramer's Take), the most important auto company with the best lineup of fuel-efficient cars, to close its billion-dollar cash burn and do more refinancing and perhaps equity offerings to get that company to be the leading car builder, perhaps in the world. We should be saluting that.
Fourth, the environment will be cleaner. I still don't know what's wrong with that, as we should not presume that all cars turned in are at the upper limit of 18 mpg. We are doing something good against global warming, too. The Journal dismisses that part of the initiative, of course.
Cramer on BloggingStocks: Don't Hit the Brakes on 'Cash for Clunkers' - BloggingStocks
