Rant - Cash for What???
Posted by Mike Fahrion on Sun, Aug 09, 2009 @ 08:44 AM
I try hard not to do this very often - I really do. I know all too well that things are often far more complex and multifaceted than meets the eye of the casual armchair quarterback.
(If you're looking for enlightening info on industrial connectivity, please stop reading now).
I just can't get this one off my brain. For some reason this little example, more than most any other, has proven to me that our government is managed by incompetent goobers.
I'd like my money back, please.
Am I off base here? Read on and let me know.
I get that powers that be have decided on a strategy of spending our way out of the recession. Counter-intuitive but I don't necessarily disagree in principle. But I thought the principle was to borrow taxpayer money to inject into the economy in programs that stimulate jobs and such.
It's Cash for Clunkers that's gotten me a bit riled. I get the idea. We take One Billion dollars and use it to try to encourage taxpayers to get their smelly old cars off the road and tip them into getting back to the dealer showrooms to buy new cars. Some of those new cars are even manufactured in the US, so some of that One Billion dollars could help keep our plants humming.
Now, if you or I was managing this program, we probably would have taken a piece of paper, maybe even a napkin since this is a fairly simple assignment, and put some deep thought into how we could use One Billion dollars to move as many cars as possible. In fact, that's the first thing I'd write on my napkin. Objective: Maximize new car sales. Budget: $1,000,000,000. Completion Date: November 2009
Now, as an engineer, I like to test the boundaries. So on the left side of my napkin I would consider giving the full one Billion to one individual to reward the lucky sap for buying a new car. On the right side of my napkin I'd consider giving one Dollar to a billion individuals to reward them for buying a billion cars.
Now that I have my boundaries established, the correct answer to the question is clearly somewhere in the middle. I happen to have the luxury of spending some time on the marketing side of the world so I know that as a matter of fact, there is a correct answer to that question. It's not a guess. It's not arrived at in committee. Any direct-marketing consultant, for a few tens of thousands of dollars, would do a nice survey and build a model that pinpoints the right dollar amount to incent the maximum number of buyers to hit our objective given our budget. And they'd do it with a margin of error of perhaps 5%.
That's what *I* would have done. I'd like to think that's what any competent, able-minded person would have done with this relatively simple assignment.
So what really happened? Well, I can't find any info on how the $3500 and $4500 incentive amounts were reached, but the result was that the one Billion dollar budget was exhausted in just one week after selling only about one hundred thousand cars.
If we go back to the notes at the top of my napkin, we realize this has been a complete disaster and the incentive number was clearly waaaay too high, maybe by a factor of 2, 3 or 4.
What to do now? In the real world, we'd fire those accountable for this program, apologize to our shareholders and demonstrate our capability to not repeat such enormous mistakes.
But, in the world of politics, we announce the program was a raving success because we gave away every penny faster than we ever could have believed, and ask for another two Billion dollars!
Ugh.
Please tell me I'm missing something. Something big.
-Mike