Media myth: A government program that burns through its 14-week budget in one week will stimulate the economy.
The networks loved “stimulus” in 2009 and the government’s clunker of an idea to give away free money to car buyers was no exception.
ABC, CBS and NBC heaped praise on the Cash for Clunkers rebate program that offered vouchers of up to $4,500 to new car buyers if their trade-ins qualified for the program and they bought the government-approved fuel-efficient vehicles.
That list of approved vehicles included the 2009 Hummer H3T, according to Edmunds.com.
Despite the poor budgeting of the program and massive bureaucracy surrounding each purchase the networks insisted that it was a “victim of its own success.” CBS “Evening News” anchor Katie Couric teased on Aug. 3, “[S]ales reports out today show the Cash for Clunkers program gave U.S. automakers a much-needed jumpstart.”
Jim Cramer called the potential $2 billion extension for the program, “money well-spent,” on NBC’s “Today.” The experts brought on by the networks also favored the program. Proponents outnumbered critics nearly three times as often, in the 37 network stories between July 4 and Aug. 3.
Though the program was touted as “great for the auto industry” and the environment, the Washington Post concluded that the program was not “necessarily a boon to the environment.”
Jeremy Anwyl, CEO of Edmunds.com (a car buying Web site), said “it’s not clear that cash for clunkers actually increased sales.” Later analysis from Edmunds found that the government didn’t get much bang for the taxpayer buck either – shelling out $24,000 per car once you subtract cars that would have been sold without the program.
On Dec. 8, President Obama announced plans for a similar rebate program for home weatherization, nicknamed “cash for caulkers” the same day he proposed spending $50 billion more on stimulus for infrastructure projects.