Tag Archives: government

Cash for Clunkers?

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I think the Cash for Clunkers program is misguided. Yes, it will stimulate the economy insofar as it encourages people to buy cars and keep the auto industry rolling. I don’t think this is the best thing for society as a whole, though.

Given that the current financial crisis was caused by people getting over their heads in debt, having a program that encourages people to buy more and get into more debt seems like a bad idea. People who would have made do are now getting new cars in order to make use of this great offer. Government largesse, however, does not cover the full cost of the vehicles, so many folks are quite likely spending more money than they otherwise would have.

By effectively lowering the retail price of the vehicles, the government is also distoring the true social costs of car ownership. If anything, car prices don’t reflect all the externalities of their manufacture and disposal. This program is further sheltering individuals from the true costs of their consumption decisions. The cars for which the subsidies apply are supposedly greener, but given that people already have functioning cars, it is not clear to me that the environmental costs of manufacturing new ones and disposing of the old ones are outweighed by the expected gains in fuel efficiency, particularly given that our consumer society gives these cars a very short lifespan before a new model “must” be purchased.

Moreover, it is becoming more and more obvious that the environmental crisis is coming to a head and will impose lifestyle changes on us during our lifetime. Now would have been a good time for the government to use this stimulus money not to prop up what could arguably be called a luxury industry that contributes to the problem by promoting an expensive lifestyle, but rather to encourage viable, practical, and attractive public transportation across the country.

For both fiscal and environmental reasons (and arguably ethical reasons as well), the government should be leading and inspiring us to “use it up, wear it out, make it do, or do without.”

Tightwad or principled?

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Over the holidays, Nicholas Kristof penned a column in The New York Times commenting on how liberals tend to not give as much to charity as conservatives, and urging us to do more. While giving to the needy is in itself good, I think it is ethically consistent for liberals to hesitate in practicing such philanthropy privately.

When we help the needy directly (by giving to a panhandler, say) we are rewarding those who happen to cross our path with a picture that appeals to our sense of need at a moment when we happen to be in a giving mood. That does not mean that the money will be used in the way intended, nor that it will be the best use of our money. What if the food money actually goes to booze? What if the poor family we do not see would use the money more effectively to get out of poverty?

There are similar questions when giving to charitable organizations. Is this charity the best recipient? As a donor, I want my money to go as far as it can; the recipient must have low operating costs and effective programs. Who is eligible for this charity’s aid? If I think that all humans are equally deserving of help and dignity, I would want my money to go help the neediest regardless of artificial boundaries such as membership in a church, town, or ethnic group.

Most importantly, as a liberal, I believe it is the responsibility of society as a whole to take care of the needy and help them get on their feet, and it is the role of government to manage this aid in a way that is impartial and effective. I support helping the needy via progressive taxes on everyone that are used to help our less fortunate brethren fairly. If additional taxes are necessary to fund those (effective!) programs in times of need, I am all for them. Conservatives and libertarians, I’ve found, tend to rail against this compulsory “donation,” but to me it is a fairer way of paying my dues to society. Just as we take care of our elderly parents and disabled friends, we take care of those who need a leg up in the world. And rather than relying on voluntary donations, which invite free riders and cannot attack the problem systemically at the root level, we organize our humanitarian duties into a government role. We, after all, are the government.

I’m not saying so much that private giving is bad (how could it be?), but rather that societal dependence on private philanthropy is wrong, since it runs a high risk of being inefficient (you know overlapping charities must be duplicating some work) and, at best, incomplete in its reach.

Some caveats: I do admit I’m glossing over some practical issues, such as how to make a state system efficient when there are various levels of government. I also hope it’s clear that this argument applies to helping the needy with basic services, which I view as a basic human right society should guarantee. I am not talking about other forms of philanthropy which fall lower in the government’s priorities and which can be significantly advanced by private donations (for example, museums and concert halls).

Finally, though, there is one strong, personal motivation to give back to the community directly. It is a motivation that, perhaps paradoxically, reflects some self-interest, but that does not diminish its value. It is this: giving to the needy directly is a good emotional exercise for the donor in reaching beyond her own comfortable, self-sufficient world and connecting to her fellow man. A tip here or there, a meal for a sick neighbor, shoveling an older person’s driveway: these are the ties that build empathy and community.