The embattled White House appears to have added car information publisher Edmunds to a quickly growing enemies list that it seems will include any company, media outlet or individual who dares to not amplify White House approved propaganda and spin.
On Wednesday, Edmunds released a detailed analysis of the Obama administration’s wasteful “Cash for Clunkers” auto trade-in program showing that each transaction inspired solely by the program cost taxpayers an eye-popping $24,000.
[A]bout 125,000 of the 690,000 “Clunker” transactions took place because the program existed. The rest would have occurred naturally without any program. Because the program came in at a whopping $3 billion, each of the 125,000 transactions generated by the “Clunker” program cost American taxpayers $24,000.
The government could have done almost as well by just giving away cars for free, instead of creating an elaborate incentive program, according to an analysis by the automotive information firm Edmunds.com in Santa Monica, Calif.
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For comparison, the average price for a new vehicle in August 2009 was $26,915, minus an average cash rebate of $1,667.
In all, the government spent $3 billion on a program that provided cash toward 690,000 car purchases – about $4,348 per car. That makes 565,000 people who got as much as $4,500 to buy a car they would have bought anyway, according to the Edmunds analysis.
Summoning all the grandeur and majesty of the highest office in the land, the White House has responded via a juvenile blog post last night.
On the same day that we found out that motor vehicle output added 1.7% to economic growth in the third quarter – the largest contribution to quarterly growth in over a decade – Edmunds.com has released a faulty analysis suggesting that the Cash for Clunkers program had no meaningful impact on our economy or on overall auto sales. This is the latest of several critical “analyses” of the Cash for Clunkers program from Edmunds.com, which appear designed to grab headlines and get coverage on cable TV.
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In other words, all the other cars were being sold on Mars, while the rest of the country was caught up in the excitement of the Cash for Clunkers program..Edmunds.com, on the other hand, is promoting a bombastic press release without any public access to their underlying analysis.
So put on your space suit and compare the two approaches yourself.
It doesn’t look like Edmunds is going to roll over and play state-run media with this White House. They’re fighting back.
The White House claims that our analysis was based on car sales on Mars and that on Earth, the marketplace is connected. We agree the marketplace is connected. In fact, that is exactly the basis of our analysis.
It is also claimed we missed the possibility that Cash for Clunkers generated excitement and consumers bought vehicles even if they didn’t qualify for the program — a claim that has been widely supported by anecdote but by little analysis. It does, after all, seem a bit odd that masses of consumers would elect to buy a vehicle because of a program for which they don’t qualify — doubly so when you add in the fact that prices shot up during Cash for Clunkers, creating a disincentive to buy.
Finally, the White House claims that the increase in fourth-quarter production reported by the car manufacturers can be attributed to Cash for Clunkers. But here is a better reason: the economy is recovering accompanied by improved car sales. No manufacturer increases production — a decision with long-term consequences — based on the 30-day sales blip triggered by an event like Cash for Clunkers.
Like That? You'll Probably Like These.
- Edmunds: Each ‘Clunker’ Transaction Cost Us $24,000
- ObamaCare Preview: Each $4500 Clunker Costs $9594
- Cash For Clunkers A Wasteful Foreign Car Bailout
- CNBC: Goodbye, Cash For Clunkers
- Cash For Clunkers Keeps Poor From Owning Cars, Dealers From Making Payroll
