Appliance Rebate Fiasco

(Someone had better fix this problem quickly. - promoted by desmoinesdem)

I thought that the appliance rebate was going to make some good headlines for Gov. Culver.  But it looks like it is going down as a fiasco.  The program was supposed to start at 8:00AM today, but by 8:10, the website was already down.  

It only had the message: "The service is unavailable."  

 The phone lines are also jammed.  Most of the time I don't even get a busy signal, it just leaves me hanging, listening to static.  Has anyone else tried to get a rebate yet?

UPDATE from desmoinesdem: The $2.8 million in stimulus money for these rebates in Iowa was exhausted in one day. Representative Bruce Braley has urged House Speaker Nancy Pelosi “to include funding for clean energy appliance rebate programs in any jobs legislation considered by the House.”

Steve King idiocy of the week

These unbelievable comments from Representative Steve King come to you courtesy of KTIV in Sioux City, who asked the congressman about the upcoming closure of the John Morrell plant in April:

King doesn’t support a suggestion, by Iowa governor Chet Culver, to extend federal unemployment benefits to 39-weeks after a worker loses his, or her, job.

The republican worries some Morrell workers won’t start looking for a new job until that 39th week when benefits are about to run out.

King says the 26-weeks workers get, right now, is enough. Rep. Steve King, (R) Iowa says “We shouldn’t turn the ‘safety net’ into a hammock. It should actually be a ‘safety net’.”

The John Morrell plant currently employs about 1,450 workers. The unemployment rate in Woodbury County is above 6 percent, so it won’t be easy for all of the displaced workers to find new jobs quickly. The Iowa Democratic Party slammed King’s “absurd” comments:

“Calling the extension to unemployment benefits a ‘hammock’ is insulting. Sioux City is suffering with the blow of the Morrell plant closing. This is the worst recession in 80 years. But, Congressman King believes that we should be worried about these workers being too lazy,” said Iowa Democratic Party Chairman Michael Kiernan. […]

“Iowans believe in working hard and playing by the rules, and I know that many affected by the Morrell plant closing are already looking for work to provide for their families after the plant closes. Steve King should stop insulting his constituents and get to work helping them get through this difficult time.”

Not only is King insensitive, he appears to be ignorant about how unemployment benefits relate to the broader economy. Last year Mark Zandi, chief economist of, calculated the stimulus “bang for the buck” of various forms of tax cuts and government spending. The table he created is on page 9 of this pdf document, or you can view it here. Of everything Zandi examined, extending unemployment benefits had the second-highest bang for the buck, generating $1.63 in economic activity for every $1 spent by the federal government. That was more than three times the bang for the buck of any permanent tax cut. Even the best tax cut for economic stimulus (a temporary payroll tax holiday) generates only an estimated $1.28 in economic activity for every $1 in revenue the federal government doesn’t collect.

In other words, extending unemployment benefits to former John Morrell workers wouldn’t just give them a safety net, it would produce more revenue for businesses in the Sioux City area. Last year’s stimulus bill extended federal unemployment benefits, but that provision may expire at the end of this month. Meanwhile, long-term unemployment has reached its highest level in decades. According to KTIV, King has talked with Smithfield Foods about giving Sioux City workers jobs at plants Smithfield owns in other communities, but I question how realistic that is when 44 other states have higher unemployment rates than Iowa. Nor would it help Sioux City businesses and property values to have hundreds of families leave the area.

Share any relevant thoughts in this thread.

Continue Reading...

Mr. President, please ignore the deficit hawks

Barack Obama’s job approval in Iowa fell to 49 percent according to the latest statewide poll by Selzer and Co. for the Des Moines Register. His lowest marks were for his handling of the budget deficit (30 percent approve, 61 percent disapprove), leading Kathie Obradovich to suggest that "Cut spending and balance the budget" should be at the top of Obama’s to-do list.

No matter what today’s polls say about the deficit, it would be poor economic policy and foolish politics to make deficit reduction a priority now.

Continue Reading...

Cash for Clunkers ends, cash for appliances coming soon

The $3 billion "Cash for Clunkers" program officially ends today, having helped generate at least 625,000 new car sales. Representative Bruce Braley, a key advocate of the program, is holding an event this morning in Bettendorf with John McEleney, Chairman of the National Automobile Dealers Association, and Gary Thomas, President of the Iowa Automobile Dealers Association.

Meanwhile, Energy Secretary Steven Chu has announced that $300 million in stimulus money will go toward cash incentives for consumers to buy energy-efficient home appliances:

Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the clunkers auto program, consumers won’t have to trade in their old appliances.)

“These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy,” Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.

Replacing old appliances can significantly reduce a household’s energy use and utility bills, so this seems like a good use of stimulus money. However, some analysts are skeptical that the new program will be as successful as “Cash for Clunkers”:

“The cash-for-clunkers (program) had a discernible value proposition for the consumer, because he knows how much his (clunker) is worth,” says [Sam] Darkatsh, the Raymond James analyst. “With appliances, there is no trade-in. You can walk into Home Depot and get a great deal on a home appliance any time you want one. Why would it drum up sales now?” Laura Champine, an analyst with Cowen & Co., agrees. “I’m not sure if it will be as powerful as cash for clunkers because there is something compelling about that $4,500 discount,” she says. “Also, a new car is more fun than a new dishwasher. So I’m not sure if it will be as much of a driver, but any driver is welcome right now.”

Share any relevant thoughts in this thread.

Continue Reading...

Cash for Clunkers gets $2 billion from stimulus funds

President Barack Obama signed a bill today allocating an additional $2 billion to the to the Car Allowance Rebate System, more commonly known as Cash for Clunkers. The money will come from the American Reinvestment and Recovery Act (the economic stimulus bill approved in February). The Senate approved the bill by a 60-37 vote on Thursday night. Senator Tom Harkin voted yes, and Senator Chuck Grassley, who criticized the program earlier this week, voted no.

I liked Harkin’s idea to put income limits on this program, but the Senate wanted to get this measure passed before the summer recess. If the Senate had approved a different bill from what cleared the House last week, the funding would have been delayed until September.

The Senate vote went mostly along party lines, but four Democrats joined 33 Republicans in voting no, and seven Republicans joined 53 Democrats in voting yes.

I’m pleased to learn that most consumers who have taken advantage of this program have traded in a “clunker” for cars that get significantly better mileage. (Click here for lists of the most popular vehicles traded in and the most popular purchased with Cash for Clunkers vouchers.) The way Congress wrote the bill, people could have traded in SUVs and trucks for similar vehicles with only minimal improvements in fuel economy.

View More...