Newton's third law of motion: F1 = -F2
Obama's first and only law of economics: Stimulus Today = 2x Hangover Tomorrow
In 10 days auto companies will announce their September auto sales. If auto specialist Edmunds.com is right, expect to see an unprecedented decline in the September SAAR number: from 13.7 million in August to a 28 year low of 8.8 million!
September’s light-vehicle sales rate will fall to 8.8 million units, consumer auto site Edmunds.com said. That would be the lowest rate in nearly 28 years, tying the worst demand on record.
After the cash-for-clunkers program boosted August sales to their first year-over-year increase since October 2007, demand has plunged. In at least the last 33 years, the U.S. seasonally adjusted annual rate has only dropped as low as 8.8 million units once -- in December 1981 -- with records stretching back to January 1976.
Demand increased to 8.9 million in the first five days of September, with 3.6 percent of sales from cash for clunkers. The rate slipped to 8.7 million from Sept. 6 to Sept. 12, Edmunds.com said, with 3.3 percent of deals leftover from cash for clunkers.
The slide in demand also has lowered the average dealer profit per vehicle, the consumer auto site said. The average was $981 the week leading up to the July 24 launch of cash for clunkers, and that steadily increased to $1,494 the last week of the program. As of last week, average dealer profit had slipped to $1,303 per vehicle.
“Many people regard February as the darkest month of the recession, but even then the SAAR was higher, at 9.1 million units,” Edmunds.com senior statistician Zhenwei Zhou said in a statement.
And the simple observation that anyone in Obama's crack team who had ever read Econ 101 would have figured out:
Now that consumers can’t receive $3,500 to $4,500 for trading in gas guzzlers for new vehicles with better fuel efficiency, they aren’t rushing to purchase vehicles.
The silver lining: thousands of Americans took out new lines of credit and other loans that will add to the increasing monthly bill, while their wages (if they are lucky to be employed) decline in real (and nominal) terms, or have less and less emergency unemployment benefits left. Thus money which could have been spent more efficiently to pay down consumer debt, ended up propping bank balance sheets, with the blessing of the President, whose primary agenda purposes are to i) recreate the credit/housing bubble and ii) to transfer any and all residual middle class wealth into the coffers of Wall Street, not necessarily in that order.
And here is Obama's economic brilliance in all its estimated splendor: