I explained all the reasons why “cash for clunkers” is both terrible economic policy and terrible environmental policy, but the idea appears to be on the Washington fast track anyway. Apparently Bill Ford has more clout than I do.

The White House and Congress reached a compromise today that would pay $3,500 or $4,500 to folks who trade in their old gas guzzlers. To qualify, your old heap has to get less than 18 mpg. You also have to buy a new car that beats the old one’s mileage by at least 4 mpg, or a light truck that exceeds it by at least 2 mpg. The compromise calls for the vouchers to be available for up to a year, and up to 1 million vehicles.

It’s all being done under the guise of economic stimulus, of course, but it sounds like broken-window reasoning to me.