Okay, I have to admit that the government’s Cash for Clunkers program worked better than I expected. With the program running low on cash right out of the gate—and Michigan lawmakers requesting $2 billion on top of the original $1 billion that is all but spent–plenty of dealers and analysts are surprised at how fast it worked. The law’s critics, including me, figured it had been hammered into mediocrity like so many pieces of legislation in Washington. I wrote that the program was lousy legislation in this magazine story. I still don’t think it was a great bill for improving fuel economy. And the sales boost will be short-lived without more money. But the program has worked. Why has it been so popular? For starters, the government made some changes between the time it was passed and when the feds rolled it out. Some cars didn’t qualify under the original legislation because the mileage rating as calculated by the government was too high. You had to trade in a car that got 18 mpg or worse to get the money. But there was a problem. After 2007, the government changed how they calculate fuel economy ratings for every model in order to match real-world driving. Before that, the government’s mileage rating for most models was unrealistically high and consumers griped that they didn’t get that kind of mileage out on the road. So the government decided at the 11th hour to apply the new rating system to older models, thus lowering the mileage rating and making them eligible for a scrappage check. That helped. Some older models and even minivans that wouldn’t have qualified under the original proposal could be scrapped to get cash for a new car once the program started. Another assumption made by analysts at IHS Global Insight and Edmunds.com was that people owning old cars worth less than $3,500 aren’t in the new-car market. They bought used cars and will do so again. They may not even have credit to get financed for a new-car purchase. And for many people driving those older cars, that’s the case. But in many other cases, dealers told me, families with good credit have their teenage or college kids driving the old beater. So they are trading it in for a new model. And last, there’s just good old-fashioned buzz. As long as banks, carmakers and Wall Street are getting bailout money, a lot of consumers figured they’d go and see if they could get their government cheese from Uncle Sam, too. So the program generated showroom traffic and got people shopping. I do stand by the key points from my original column. One, it is a great bill for selling new pickup trucks, which hardly greens the planet as its proponents originally stated. And my bigger point was that the program was grossly underfunded. It was. We’ll only get about a 2.5% sales increase for the year if the House and Senate don’t approve more cash. That’s in the works as we speak. Another $2 billion will likely be approved by the House today. It will be tougher in the Senate, according to sources on Capitol Hill. But it could be approved next week. If so, it could boost sales by 7% to 8% for the year. That will help ailing carmakers. If not, the Clunbker bill’s success will be short lived.

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Cash for Clunkers Surprises Critics

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Cash for Clunkers Surprises its Critics

Why it Looks Like a Recovery is Under Way

The government planned to suspend its popular car trade-in program Thursday night on concerns it is quickly depleting the $1 billion allocated for rebates

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Feds to Suspend ‘Cash for Clunkers’

Oil prices jumped above $67 a barrel Friday in Asia, extending a big rally from the previous day as surging stock markets fueled investor optimism. Benchmark crude for September delivery was up 62 cents to $67.56 a barrel by midday Singapore time in…

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Oil extends rally to above $67 as stocks jump

As the Cash for Clunkers auto stimulus program faces a shortfall, proponents seek to boost funding with an additional $2 billion

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Lawmakers Scramble for ‘Clunker’ Funds

SINGAPORE (Reuters) – Oil extended gains well above $67 a barrel on Friday, after a 5.7 percent jump in the previous session on U.S. data and earnings which renewed hopes of an economic recovery and drove up equity and commodities markets.

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Oil rises above $67 on renewed econ recovery hopes

WASHINGTON (Reuters) – The U.S. government’s $1 billion “cash for clunkers” auto sales incentive program reached its funding limit unexpectedly after an avalanche of business exhausted its funds, an Obama administration official said late Thursday.

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U.S. auto “clunker” program limit, new funding sought

Police were called on a group of retirees who refused to leave Sen. Dianne Feinstein’s West Los Angeles office until she talked to them about health care reform. Los Angeles police Sergeant Rich Brunson said Thursday that police lured the group of seven…

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Police called on retirees at senator’s LA office

Salinas Police Chief Louis Fetherolf continues to push for more officers after a string of shootings this week. With two men killed in separate shootings during the week, the homicide count in Salinas now stands at 16 for the year. In another incident, a 14-…

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Salinas chief pushes for more officers

The latest U.S. missile defense test, conducted Thursday evening in Hawaii waters, was deemed a success as tensions continue with North Korea over that country’s missile program. A short-range ballistic missile was fired from the Pacific Missile Range…

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Latest US missile defense test in Hawaii a success

Asian stock markets rose Friday as better-than-expected earnings at companies from Japan to the U.S. reinforced hopes of stronger global growth. Major markets were higher between 1 percent and 2 percent, and crude oil prices resumed their upward trek to trade…

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Asian stocks rise as earnings boost recovery hopes

HONG KONG (Reuters) – Asian stocks pushed higher on Friday and were poised to score double-digit gains in July as investors keep pouring funds on bets the region’s growth engine will lead the global economy out of recession.

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Asia stocks hit 11-mth high as earnings cheered

The recession likely eased in the spring, with the economy no longer in free-fall. Many analysts predict that when the Commerce Department releases its first estimate of second-quarter activity Friday, it will say the economy shrank at a 1.5 percent pace from…

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GDP report is likely to show recession eased in 2Q

The U.N. Security Council is calling for long-delayed elections in Ivory Coast to take place on Nov. 29 and warned that a postponement would undermine the 2007 peace agreement that ended the country’s civil war. In a resolution extending the U.N. peacekeeping…

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UN calls for Ivory Coast elections on Nov. 29