Word: scrap
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Dates: during 2000-2009
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Americans are always junking cars and trucks--14 million last year, according to R.L. Polk & Co.--but this time they went scrap-happy. In just over a week, the program ran through most of its $1 billion in funding. The House of Representatives quickly voted to allot an additional $2 billion. In the Senate, opposition from John McCain and other deficit hawks slowed passage but appeared unlikely to stop it. "I always thought that cash for clunkers would be an effective stimulus, but it seems to have exceeded expectations," says Princeton University economist Alan Blinder, an early booster...
...Over the past few weeks, Hamburg police at the shipyards have turned up 43 cars that had been declared scrapped but were illegally earmarked for export to buyers in Africa and Eastern Europe. The numbers so far seem small, but some law-enforcement experts warn that as many as 50,000 cars destined for the scrap heap have already been sold illegally - at the expense of German taxpayers...
...plan is meant to help scrap dealers too. They get the old cars for free, the idea being that they can then earn money by selling the scrap metal to steel companies. But with scrap prices taking a dive, some dealers are eying the bigger profits that come from selling the cars abroad. "The problem is that there is no supervision of the companies to ensure that they actually scrap the cars," says Frank Wolff, director of the environmental-crime division of the Hamburg police. "These firms are supposed to turn the cars into scrap, but instead, some are selling...
...problem for the police is that German lawmakers were in such a hurry to approve the money to boost the car industry that they did not create sufficient controls to prevent abuse of the system. Dealers are supposed to scrap the cars, but if they don't, it's only considered a minor violation, not a criminal offense. "It just opens the door for abuse," says Ronald Schulze, an official at the Federation of German Detectives. "We can't charge them with fraud because lawmakers failed to define the crime." (See the 50 worst cars of all time...
...probably too late for Germany to do anything about its black market in clunkers. The abuse could have been prevented if lawmakers had also created a control system to track each car from the point of hand over to the scrap heap. And the police could have prosecuted dealers who sell the cars instead of scrapping them if lawmakers had made it a crime. Instead, the hands of the police are tied, and as Germany's cash-for-clunkers program runs its course - it's limited to 2 million cars - public interest in cases of abuse will likely fade...