"Reduce the supply of drivable used cars, and you drive up the price of all cars," Tim Carney writes in the Washington Examiner. By scrapping trade-ins, as well as by "boosting sales prices and lowering trade-in payments," Cash for Clunkers "taxes used-car buyers to subsidize new-car buyers."
With that in mind, Carney looks at who's been lobbying for and against the program. Not surprisingly, the automakers aren't the only enterprises with interests at stake:
One lobbyist for this bill was Nucor Steel. In Cayuga County, N.Y., Nucor turns scrap steel into sheet metal and other steel products. The clunkers are now becoming a subsidized feedstock for Nucor, which helps explain why Sen. Chuck Schumer, D-N.Y., has led the push for $2 billion extra in clunker cash.
Then there's Enterprise Rent-a-Car also backing the bill, supposedly out of solidarity with automakers. But Enterprise sells its rental cars after a few years. As a rental firm that buys its cars new, Enterprise benefits every time someone else scraps a used car.
On the other side of the lobbying debate were non-dealer auto-repair shops, whose businesses depend on used or older cars, which the owners don't take to the dealer for repair. Also, the Automotive Aftermarket Industry Association opposed the bill.
These are the guys who can sell you the headlight for your 1998 Ford Taurus, or who rebuild an engine out of a junked car.
Shredding old cars saps both their clientele and their supply of old transmissions to rebuild.