This is the Cato Daily Podcast for Monday, August 31st, 2009. I'm Caleb Brown.

Cashfor Clunkers is now kaput. but what ought to happen to all of those leftover automobiles?

Instead of destroying resources, Cato Institute Research Fellow Swami I.R. argues they should be

given or sold to those who could use them.

Cash for clunkers seemed to have two goals. One was economic. The idea is that we will stimulate the production of cars which are in trouble.

The second aim was supposed to be green.

The idea was that these clunkers have gas guzzlers, they take a lot of mileage, they have a little mileage,

so we'll substitute them with newer cars, which therefore will consume less gas per mile, and therefore there will be a green effect as well.

These were the two aims.

Okay well what's wrong with that?

Okay what's wrong with it? The news, a delightful little news item from Germany.

Criminal gangs have apparently, instead of destroying the old clunkers,

have bought these old clunkers and have exported 50,000 of them illegally to Africa in Eastern Europe.

And the German Greens claim that this is just a start, actually it's going to be double.

And the implication is that American clunkers similarly will get illegally exported to Mexico.

Then the question is, these smugglers, are they not doing humanity a favor?

I mean when you have stupid rules then people who break those rules can end up

actually improving economic welfare. I mean to understand it here just

consider the Salvation Army asks people to donate old junk including incidentally

old cars. They say you please give it to us. Of course what is junk to

one person is a blessing for somebody else who normally can't afford that stuff.

Even in green terms that's called recycling.

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