The experiment known as “Cash for Clunkers” appears to be a real failure. It was there to spur interest in auto sales and start priming the pump again. It did for a while…a month or so. Now we are back to the reality of the automotive markets. They are still in a very tough place.

Michael Panzner wrote in his excellent daily blog (which should be on your reading list):

“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.”

Well, I don’t know about you, but it makes me feel real confident to know that I own a part of GM.

This is the concern with everything the politicians are doing to “fix” the problem. They are big band-aids. Panzner goes onto pose the question – Will the housing market do the same thing? If you think about it, they have rolled out the same type of incentive programs that have done nothing but put a band-aid on the real estate markets. There is already plenty of evidence that those programs are not working. I really do hate to see this Administration’s Plan B.