Empire Strikes Back: White House calls out Edmunds on Clunkers story, Edmunds responds
The facts in the case of the White House versus Edmunds are essentially indisputable – but they are open for interpretation. The federal government's $3 billion Cash for Clunkers program generated 690,000 sales by providing $3,500 and $4,500 vouchers to car buyers who turned in their eligible car or truck in exchange for a more fuel efficient ride. From here on in, Edmunds and the White House seem to be at considerable odds.
Edmunds recently claimed that its statistical analysis shows that only 125,000 of the nearly 700,000 vehicles purchased under C4C were sales that wouldn't have come in 2009 if it weren't for the much ballyhooed government program. And since the program cost $3 billion to implement, Edmunds came to the conclusion that each incremental sale achieved by C4C cost taxpayers $24,000 per vehicle. As you might imagine, the White House has a problem with that.
The White House starts its quite literally otherworldly retort by noting that that motor vehicle sales increased America's overall economic growth in the third quarter by 1.7%. That's the industry's largest contribution to that metric in over a decade. The WH blog post then states that Edmunds is ignoring the assertion that overall car sales were also positively affected by the Clunkers program above and beyond the 690,000 C4C units sold. To add insult to assault, the White House accuses Edmunds of covering auto sales on Mars.
While the government doesn't have hard facts here, anecdotal evidence certainly shows that August's seasonally adjusted annual rate (SAAR) of 14 million cars and trucks sold means there were considerably more sales generated by C4C than the 125,000 number would suggest. The WH blog also notes that analysts from Global Insight and Moody's suggest that there has been little payback from the Clunkers program.
The White House also states that C4C will have benefits beyond the third quarter, as production has been bumped at Chrysler, General Motors, Ford and Honda in the fourth quarter. That should mean that GDP will get still another big shot in the arm from the auto industry. The White House then goes on to add that C4C generated 70,000 jobs. We're tempted to call shenanigans on that one, especially considering that divvying up $3 billion between 70,000 jobs only comes out to $42,857 per – and that doesn't account for the actual cars themselves.
Edmunds CEO Jeremy Anwyl took time to respond to the suddenly hostile situation, arguing that government subsidy programs are always expensive when looked at on a per-unit basis. Edmunds adds that it is strictly working with the facts to come up with the $24,000 per vehicle number, and that anecdotal evidence like indirect sales isn't based on concrete data.
[Sources: White House Blogs; Edmunds Auto Observer | Image: Gabriel Bouys/Getty]
Reader Comments (Page 1 of 2)
Invisible 1:29PM (10/30/2009)
White house attacking someone for disagreeing with them, say it isn't so....
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Sad, but the White House is on a rant lately attacking everyone that doesn't drink their koolaid.
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FitFan 2:11PM (10/30/2009)
Why shouldn't the Administration respond when someone criticizes them?
wincros 4:40PM (10/30/2009)
Why would you call correcting the facts an attack? And what other "attacks" are you talking about, their statement that Fox News is not a news organization? Wow, that is not news. Everyone knows that. You are just showing your right wing politics.
ivor.pdx 11:56AM (10/31/2009)
Edmond's countercharge and seeming suggestion that only primary effects are open to discussion seems like a CYA... the WHOLE POINT of C4C and other stimulus plans is to generate secondary and synergistic effects. Small minds focus on small things....
cathyriess 7:47AM (11/01/2009)
The koo aid comment says it all.. RACIST!! And.. I'll use my real name to call you out invisible.. idiot..
Cathy Riess..
Invisible 8:40AM (11/02/2009)
Well Cathy. I'm guessing you are a democrat. You see everything as Racist. Why is that? You have no debating skills? You can't discuss the subject like an adult? You can only ASSume my comment was racist?
Clearly you are just a sheeple, so I will educate you CATHY!
"Don't Drink The Kool-Aid"
http://www.raptureready.com/rr-kool-aid.html
is a reference to all the blink sheeple that followed their leader. If he told them private industry and profits are bad, government control is good, they would believe without questioning.
If he told them to drink the kool-aid and kill themselves and their children, they would. And did.
CATHY, go read up on Jim Jones.
paulwesterberg 1:47PM (10/30/2009)
I think the money per car for C4C was a little too much and they should have instituted a much higher mileage improvement requirement.
I think some stimulus spending was necessary to help the economy. Edmund's analysis shows that this is probably not the best bang for the buck, but congress was trying to prop up the ailing auto manufacturers to keep more people from being laid off. This type of analysis is helpful though, it would be interesting to apply it to other stimulus spending, defense spending, bank bailouts etc and see what types of spending is most beneficial to generate jobs and boost the economy.
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ivor.pdx 11:28AM (11/01/2009)
I agree C4C wasn't optimal, but it did keep a huge chunk of our nation's industrial infrastructure from crashing and burning, so that hopefully, they will be in business in the future with their eyes more focused on current realities and not just the shareholder's *short term* bottom line.
Woodenbee 1:48PM (10/30/2009)
Invisible why are you on this site your obviously backwards, you use the term "koolaid" like a Limbaugh douchiehead, at least this Whitehouse doesn't pay some contractor (in billions of your tax dollars) to come and murder them, got any other catchphrases that make no sense? let me guess climate change is a myth?
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Detfan 2:20PM (10/30/2009)
No, THIS administration is spending our country into bankruptcy. Well over a trillion a year for the entire 8 years in office. We can only hope its just 4!!
Bip-D-Bo 2:34PM (10/30/2009)
Woodenbee,
Do you attack everyine who disagrees with you, and do so with little to no logic or pertinant information? Are you from the White House?
This guy's Koolaid goes down sweet at first, but it's going to give us a big, fat a**.
PabloKoh 3:06PM (10/30/2009)
Obamabot's ATTACK!!!!
Woodenbee 4:38PM (10/30/2009)
I only attack people who are brainwashed to believe nonsense, how can a country function without a government? why are you people so opposed to your first legitimately elected (black) president in 8 years, how can fledgling industries succeed without help, how can less fortunate Americans survive without redistributing a tiny portion of the obscene wealth a few corporations and the super rich elite assume every day? I'm just so bored of hearing you sheep bleat the lines your corporate croney DJ's feed to you? its just annoying, I know what your going to say, because we all know what you've been told to believe, you think your "independents", the only thing your independent from is facts, its all wrong and you never change, so why not abuse you?
polo 4:50PM (10/30/2009)
"No, THIS administration is spending our country into bankruptcy."
Wrong. You know how much of this year's 1.7trillion dollar deficit is a hold-over from the previous Bush admin? You ready? 1Trillion. You know how much Bush's war in Iraq alone cost? 3Trillion (including interest), of which we've only paid out 1Trillion so far. Add in the lost revenue from the Bush tax cuts, along with the lost jobs due to Bush's reckless handling of the economy and you can see why we have long projected deficit.
Obama's biggest spending program (the stimulus bill) is still less than the deficit left over by Bush, and is a one-time expense, so to say he's "spending this country into bankruptcy" shows us what channel you watch (Fauxnews), what radio station you listen to (Limbaugh), and just how smart you really are (dumb as rocks).
jake 2:34PM (10/30/2009)
Drawing in politics on autoblog usually doesn't end well...
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Ben 4:10PM (10/30/2009)
Honest, naive question: are there any Republicans here?
I ask because for the last 8 years the Republican administration has methodically worked hard to destroy almost everything that brings me to autobloggreen: energy independence, mitigation of pollutants/toxins/greenhouse gases, cost-effective transportation... This is a fact--check the voting records. You have to go back a fair way to find a Republican administration that even paid lip service to any of that, let alone accomplished anything. The Dems have been neither resolute nor very effective, but there is an enormous difference in their support of various bills.
If there are Republicans here, please tell me: what brings you here? I'm genuinely curious, and I hope that your answers will improve my opinion of that word.
If not, never mind. I realise that registered Democrats have widely differing agendas, and that there are at least in theory a couple of other parties "of conscience" in the USA, even though our electoral system makes them kind of impractical.
Invisible 4:33PM (10/30/2009)
-----the Republican administration has methodically worked hard to destroy almost everything that brings me to autobloggreen: energy independence---------
Really. You believe what you typed. Why is the Democratic party fighting the exploration and use of our own oil? Why is the Democratic party fighting Nuclear Energy? Just to name a few.
polo 4:38PM (10/30/2009)
I got to agree. The figures posted here are even more contrived than Edmunds. For example saying the program saves 70K jobs doesn't mean you divide the total amount of the program by those jobs and say "AAAH YOU SPENT $42,000 A JOB". What about the new cars that got purchased, what about the cars people upgraded too (because they had the rebate), and the profits that went back into the program, what about the residual jobs (the people who live off the people who make these cars), what about how this influenced buyer habits in what was a "save everything and pray" frame-of-mind among most consumers. Something like this is apparently far too complex for either Edmunds, or autoblog to comprehend and analyze.
Woodenbee 4:58PM (10/30/2009)
well theres so many reasons against destroying our own country for oil, the oil and gas companies destroy where ever they dig, they pollute, they kill the local population and any surviving wildlife is put in danger. Why do you think they like to go to poor countries first, no regulations, Nuclear, we cant even do that right, we build each plant like its the only one, so they cost 100 times more and are grossly inefficient, when compared to other Nuclear nations, while this lines the pockets of the industry it does nothing for Americans, and thats the point your type don't get(invisible /detfan), you think its every man for himself, its not , on these issues we have to coordinate through legislation and regulation otherwise we end up with the disgraceful mess we have now, where the only winners are the oil giants, you think the govt is screwing you, since when did a corporation ever help anyone? with health care, retirement, green energy grants, equal rights, foreign policy?? you think your precious business's are going to handle that for you?
mike 5:39PM (10/30/2009)
I agree completely...
I am tired of seeing political leanings here completely.
I'll argue politics and religion with friends and family thanks.
Frankly, edmunds should do the same.
They are an automotive interest company, not economists.