It was easy to predict that the Cash for Clunkers would only drive up sales very temporarily as the expense of future sales.  Recent results have verified the sharp dropoff in auto sales when the program ended.

It was also easy to predict a backlash from consumers over the nationalization of GM and Chrysler.  This bailout was a self fulfilling failure. GM and Chrysler were down far more than other car companies. GM was down 45%, Chrysler was down 42% and Ford was down a mere 6%.

Yes this is only correlation but the stories of consumers avoiding the nationalized car companies are becoming common, even if they are rarely covered by the press.

While the very expensive bailout may have seemed attractive in the short term, it may have succeeded in destroying so much customer loyalty that it will prove disastrous in the long run.  GM would have been better served to have reorganized through an orderly and LEGAL bankruptcy.

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