The Cash for Clunkers program, extended last night by the Senate, is widely unpopular in conservative and free-market circles. Economics commentator Larry Kudlow, usually found in those very same circles, explains in National Review Online why it’s a successful example of government stimulus.

There’s the consumer confidence, consumer enthusiasm angle:

In virtually no time, the clunker program has become a national pastime. It has captured the public’s imagination in a way that no other federal stimulus has. Everyone is talking about it. And I truly believe that consumer spirits have been buoyed by the prospect of going out and buying a new car — even with federal assistance, and even under the duress of federal mileage standards.

And the stimulus angle:

Now, I wouldn’t want the government to pass out free money for everything. But in this particular case, the cash-for-clunkers rebate program is working. It’s working so well that it’s running way ahead of the computers that are administering it at the Transportation Department and Citibank.

Well, sure. That’s government for you. But unlike most of the rest of the fiscal-stimulus plan, this program actually works because the federal cash rebate actually contributes to a consumer purchase. It’s not just another welfare-type transfer program.

The Senate last night passed H.R. 3435, making supplemental appropriations for fiscal year 2009 for the Consumer Assistance to Recycle and Save Program. The vote was 60-37.

And the dealers say, can we now pleased be paid? From The Dallas Morning News, “Dealers want government to accelerate their ‘cash for clunkers’ rebate checks“

From The Detroit Free Press: “WASHINGTON — The U.S. House approved an emergency $2-billion infusion for the cash-for-clunkers program this afternoon, with a plethora of lawmakers from around the country calling it a runaway success that should not be ended.”

The National Association of Auto Dealers is very supportive of the concept, but worries that a rushed or unclear process could leave dealers not reimbursed:

NADA Chairman John McEleney, an Iowa dealer, said the organization had been assured by the Obama administration that all transactions consummated through today will be honored.

“Nonetheless, until further definitive guidance on the availability of funding is provided by the administration, dealers who accept additional ‘clunkers’ deals may face a risk that they will not be reimbursed,” McEleney said.

At National Review Online, Henry Payne points to provisions of the law that merit some tough questions. From “Crush for Clunkers“:

[A] little noticed provision of the program requires that the trade-in vehicles be “scrapped, crushed or shredded.” The 136-page rulebook [PDF] by which NHTSA administers the Clunkers program is a revealing window into the planet-first ideologues that are now running our country….

[Demands] that the guzzlers be permanently shredded means that already hurting used-car and -parts businesses will suffer. By insisting that the cars not only be crushed — but also that their engines be disabled — Congress’s decree will penalize the industry at time when a dozen U.S. parts suppliers have filed for bankruptcy this year.

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