Let’s walk through the mercury problem (H/T: Instapundit).

• Automakers used mercury as a component for various auto systems until 2004.
• They stopped because mercury is toxic, and it gets into stuff that we eat (the actual level of risk is in fact not relevant for this discussion).
• People get very touchy about toxic elements being thrown out with the rest of the garbage, so there’s an industry designed around collecting the mercury at the end of a car’s life.  The big (only?) one of these is ELV Solutions.
• Here’s a list of the car companies that work with ELV Solutions.  Notice which car company isn’t on the list?
• That’s right: GM isn’t on the list.  They exited the program at the beginning of August.
• Autoblog Green calls the reason why “convoluted,” but it’s not.  There are now two GMs.  Good GM is the one with good assets and a chance of actually making money; Bad GM is the one with all the garbage assets, bad debts, and onerous obligations.
• Good GM does not make cars using mercury, and technically never has (its predecessor Old GM did, not it), so it sees no particular reason why it should fund mercury recovery.
• Bad GM… doesn’t make anything, or indeed do much of anything except sit there and slowly decompose; but Bad GM is the one that ELV Solutions needs to talk to about funding mercury recovery.
• No, Bad GM doesn’t have any money.  Money is a good asset, which is why Bad GM doesn’t have any of it.
• No, ELV Solutions is not able to break even on mercury reclamation.  If you could do that, ELV Solutions wouldn’t exist: the car companies would have done the job themselves and directly.
• So now we come to the Cash-for-Clunkers program, which has suddenly put a large number of pre-2004 cars up for immediate destruction (and mercury reclamation).  A lot of those cars were built by the Old GM.
• ELV Solutions is thus stuck for reclaiming the mercury of a major car company’s old vehicles, without getting funded by that car company.
• And, given that there’s no GM ‘flavor’ of mercury, or GM-only junkyards, ELV Solutions is really stuck for reclaiming the mercury a major car company’s old vehicles, without getting funded by that car company.

One last thing, and please note this carefully: none of this is a bug.  The intent all along was to shunt money-hemorrhaging expenses like mercury reclamation to a zombie company that could go belly-up without also killing General Motors.  So don’t expect the administration to do anything about this.  Although I suspect that the hand of the government that was establishing the GM reorganization [did not know] what the hand that was putting together Cash-for-Clunkers was doing… which may mean that (depending on how this all turns out) a seafood diet may be contraindicated again for a couple of years.

Moe Lane

Crossposted to Moe Lane.

[Updated for clarity.]

Thanks to the glories of YouTube, we can watch as the government mandates the destruction of perfectly good automobiles to “help the economy.”  Here is a very nice 1990s Dodge Dakota 4X4 being destroyed.  It is a much better vehicle than my pick up truck. 

This is a Corvette that looks to be in pretty good condition.  Black, pretty sharp car.  I’m sure there are a lot of young men crammed into 2001 Nissans who would have liked this car.

In this video, a ‘98 Cadillac DeVille with less than 80,000 miles meets its end.  Just 68,000 miles on this Chevy Caprice wagon.

A nice looking 2001 Mazda light truck with 75,000 miles bites the dust here.  Here’s a good looking Volvo prematurely destroyed.  This SUV would look at home in any tony U.S. suburb.

Really, you ought to look at at least a couple of these videos, and the hundreds more like them on YouTube.  Are these “clunkers?”  Can it really help the economy to destroy perfectly good assets?  Are the people running the government the most economically illiterate bunch since FDR ruled the roost?  Or are they dumber?

Remember how cash for clunkers was so successful that Congress was forced to triple the size of the program in a hurry? Well, those billions of dollars will go further now that hundreds of New York auto dealers have decided the program is too badly managed to keep participating in:

Hundreds of auto dealers in the New York area have withdrawn from the government’s Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.

The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They’re also worried about getting repaid.

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Already by about 50 million, which is real money for anybody (except a Democratic legislator, of course).  It’ll likely get worse:

The popular program is being blamed for hurting charities that rely on donations of cars to fund social programs.

Those charities say their donations have fallen up to 12-percent already since “Cash for Clunkers” was implemented.

They fear that as time goes on, their annual donations will drop 25-percent, which amounts to more than 100-million dollars.

See also Reuters.  Below is a list of national charities thus affected (the link has a longer list of state/local ones) :

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If you’re wondering how to reconcile the apparent paradox that the Cash-for-Clunkers program can be simultaneously popular…

The federal government’s new “Cash for Clunkers” program got off to a rousing start over the past two weeks, with some new-car dealers reporting dozens of deals completed in just the first few days.

Officially, the program began July 24 when the government released the final rules. The first flurry of activity kicked in over the first week — when the program came close to running out of money — and is continuing now only because of an infusion of $2 billion more, approved by Congress.

…and unpopular…

Fifty-four percent (54%) of Americans oppose any further funding for the federal “cash for clunkers” program which encourages the owners of older cars to trade them in for newer, more fuel-efficient ones.

A new Rasmussen Reports national telephone survey finds that just 33% of adults think Congress should authorize additional funding to keep the program going now that the original $950 million allocated for it has run out. Thirteen percent (13%) are not sure.

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When faced with a vigorous band of constituents who wished to loudly express their discomfort and annoyance with both Russ Carnahan’s specific and general voting records, the Congressman did the proper thing: he engaged with them.  He listened.  He explained why sometimes - to evoke Burke - you have to exercise your own judgement in representing your district, and not knee-jerk defer to constituent opinion.  In short, he was a Representative.

Yes, I’m joking.  What he actually did was lock the doors on them before the speech, and ran out the back like a scared little bunny rabbit.  Or a Democratic legacy politician who doesn’t understand why the grubby little proles are so exercised over things, all of a sudden.

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The problem is that participating car dealers are currently on the hook for the trade-ins that they made in good faith, but have yet to see any of the deals signed off on by the National Highway Traffic Safety Administration. There are problems with the online system, you see.

Of course there are.  It’s a government program, remember?

[Minnesota Auto Dealers Association vice president Scott] Lambert said the government has created a program that’s “so big and cumbersome that it can’t find a way to accept anything. We’re sending in good, reliable deals.”

It’s nerve-racking for the dealers, he said, because they have given the customer $4,500 and now the dealers need to be reimbursed.

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