Friday, December 11, 2009

Deja vu all over again

Detroit's three automakers criticized Japan on Thursday for keeping foreign automakers out of its cash-for-clunkers program while noting how Japanese automakers claimed nearly half the vehicles sold under the U.S. clunkers program...

...The Obama administration said Thursday that Japan should open its version of a cash-for-clunkers program to foreign vehicles...freep.com

Would anyone expect anything else? As noted in the article, it would be little more than symbolism even if Japan did include foreign automakers since Detroit sells so few cars in Japan. However that symbolism would be a symbol of fair play while not threatening Japanese auto companies in the slightest. The reason given by the Japanese government is that since so few Detroit autos are sold in Japan, they are exempt from fuel economy certification, and only cars with that certification qualify. It's just something that can't be helped. No discrimination against foreign things intended.

Besides, Japanese intestines are longer.

Michael Moore, the millionaire capitalist who admits to being embarrassed at his own wealth*, was in Japan recently to promote his latest movie (profits from which will cause more embarrassment to flow into his bank account) and while here lectured Japan to stop becoming like the US. He needn't worry about that.

8 comments:

  1. Anonymous5:25 PM

    Notice how Japan is asking the US to help counter the new "Buy China" regulation passed in Beijing? Of course, the US is busily helping the Japanese, who may be shut out of the PRC market. Detroit will find itself at the bottom of the in-box as US diplomats confer with the Japanese on how they can reopen the Chinese market.

    Americans are dunces of the first order!

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  2. They're consistent, if nothing else.

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  3. Anonymous1:54 PM

    Perhaps Detroit should make a car that meets certification criteria.

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  4. Perhaps my post and the article were unclear:

    "...since so few Detroit autos are sold in Japan, they are exempt from fuel economy certification, and only cars with that certification qualify."

    The Japanese government is not claiming that foreign autos cannot meet the standards. They have been exempt from testing. So if they have not been tested, they cannot meet the criteria of being certified.

    If you have different information on this, I would be interested.

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  5. I did find and post further information on this.

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  6. I don't know much about cash for clunkers in Japan, but the whole program is rather ridiculous in the first place. If people hold on to old stuff, then the left over money goes into savings, which goes into investments, which goes into increasing productive capacity (where it's really desired), which ultimately gives us more stuff and cheaper prices.

    As things stand now production capacity is only encouraged where it's not needed (via government endorsement) and the finances supporting it are a house of cards bound to collapse.

    Another problem is cars in America, and perhaps Japan as well, are full of so many foreign parts they can hardly be called American or Japanese.

    Finally though, if the purpose is to stimulate the home economy, why the heck should anyone be helping people buy foreign cars.

    The whole thing is nuts from start to finish. Or maybe that's just me.

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  7. The program is nuts.

    As I recall---I haven't checked recently---it was not especially successful in the US. People who wanted new cars rushed to buy them during the initial term. Later after that period was over, sales dropped again because so many had already made their purchases. All it seems to have done (if that pattern held) was shift the time of purchase.

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  8. Young J12:49 PM

    Admittedly cash for clunkers wasnt spectacularly succesful, but its not a bad idea in a recession, especially with failing automative companies. You are just shifting demand forward, but thats the point, to get people to purchase now rather than in the future. While many of those sales might come at expense of say next months sales, the real benefit would come from people who, because of the economy, would have kept their used cars until the next year or later rather than purchasing now. However, even just the restocking would have a positive effect, especially if you can stave off plant closures/bankruptcies till the market recovers.

    As for why its better to spur consumption? in a perfectly working economy, that money would get saved and reinvested into businesses by banks, except that right now because of low demand, business arent looking to expand or even maintain production, and banks arent looking to invest. Plus unless that money is being given to the poorest people it doesnt all get back into the economy quickly - some goes into mattreses, some goes oversees, etc.

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