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 7)
notYou 1:35PM (10/30/2009)
"The facts in the case of the White House versus Edmunds are essentially indisputable – but they are open for interpretation. "
Like so:
"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."
You (+Fed) say "generated", most of the rest of the sane world says [at best] "provided additional incentive for" or [at worst] "unnecessarily discounted".
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geo.stewart 2:49PM (10/30/2009)
maybe FoxNews can breathe a sigh of relief now that the White House is focused on Edmunds for a few minutes.
you KNOW how the White House absolutely HATES when you present facts to counter their spin. you know, how the 787B relief package 'saved or created' 660K-1M jobs or $700K+ per job.
the white house absolutely depends on smoke and mirrors to justify its reprehensible attacks on our wallets
audi_arena 3:41PM (10/30/2009)
Again, I completely dissagree. When the C4C program was out, 1 out of every 4 leads was someone who wouldn't otherwise be in the market, but wanted to jump on the program before it ended. We didn't have to advertise anything, they just started pouring in. THEN, as business picked up with the C4C people, it generated momentum so that the month AFTER the program ended we had the best month our dealership has had in company history.
This is a bunch of crap.
Ligor 4:30PM (10/30/2009)
the people at Edmunds are a bunch of IDIOTS and RETARDED pos
let's put it this way, if C4C had not taken place the auto industry would have lost even more momentum adn the current pick up in hte economy would have not taken place
for us of us with smart investing - well we just won 10-100k a piece just on this spike
that makes me exteremely happy adn I wish they' do another C4C for about $3 billion
soot take what's left of the $700billion from the banks and try to create incentives (not just on cars) but things that would make your house more efficient - like some of the 20yr old furnaces that burn twice as much energy as new units but only return the same performance
that equipemnt was planned of r going into new houses, which are not being built, but now the larger public can get them for a nice discunt adn help out with energy waste adn usage as well
I guess the republican will do whatever it take to argue- they need to get their finger out their assses and stop enjoying themself so hard
Tom 4:52PM (10/30/2009)
@Ligor
OMG YOUZ IZ SO RIGHTZ!
We should absolutely have another C4C! First of all, I’m sure there are still many many people out there who have older, fuel inefficient cars that are in the position to make a major purchase! I mean, not EVERYONE in that position could have taken advantage of the first round. There would be literally millions more people who could participate. In fact, we should do it every month! Never-ending program even?
Oh, and your idea to have a C4C on “that equipemnt was planned of r going into new houses” is probably the best I’ve ever heard. Seriously. Obama should just throw “Maytag Day” at Sears. Everyone could trade in their old crappy appliances for brand spanking new EnergyStar models. Obama could just hand over the money reserved for preserving liquidity in our financial system to people who are either too shortsighted or just don’t care so they can save on their energy bills. OH AND THE BEST PART??? “Us of us with smart investing” could win ANOTHER “10-100k a piece” and be “exteremely happy”!
/sarcasm.
Maybe republicans aren't the only idiots out there... *sigh*
Frank 5:11PM (10/30/2009)
Breaking News: Today Anita Dunn from the White House announced that Edmunds is not "a real car site". "They look like a car site, but they are really just an arm of Ford Motor Company", referencing the only Detroit automaker who did not take bailout money from the administration, she said in a statement to the press. Neither Edmunds CEO Jeremy Anwyl nor Ford CEO Allan Mulally could be reached for a statement.
Paul 6:07PM (10/30/2009)
I'm not going to play politics here but Edmunds' methodology was completely flawed. Car sales are highly dependent on momentum and their "incremental sales" analysis failed to account for the massive declines of previous months before the program. Some purchases were certainly going to happen anyway but the C4C program was a MASSIVE shot in the arm of our economy, boosting sales AND average price per sale -- That matters.
What people don't get is that when you sell these cars, you're generating jobs for the people who deliver the vehicles, service them, sell them, do the finance on them, insure them, etc. It's not just the people who work on the production line. It's a gigantic web of economic activity that has huge ripples and, again, generates momentum that can be seen in the recent GDP spike.
Novajeff69 1:39PM (10/30/2009)
C4C may have generated more than 125k units during the length of the program, but I'm thinking that maybe the program lead people to buy a little earlier than they would have, without the credit. So it probably shifted purchases up from Oct to August. Not a bad thing, but it's still not a sale that wouldn't have happened otherwise. I agree that there is not enough concrete evidence to applaud or bash the program.
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Big Mola 2:00PM (10/30/2009)
And how did Edmunds magically get that 125,000 number? Statistical analysis my
ebleyes 2:28PM (10/30/2009)
It's really funny reading comments from Americans, they seem to act as if everything that is happening now is new or unprecedented, were you all in a coma during the Bush administration? Do you find any difference in the way any president deal with damaging press reports?
I know that a big chunk of Autoblog readers are conservatives or libertarians - I won't say republicans because they seem ashamed of that party- but this anti-government rhetoric seem really juvenile.
TonyInMI 3:39PM (10/30/2009)
It may seem that way to you - yet it is not. CNN never fact checked a SNL story even during the campaign. No previous admin. ever tried to restrict a major news station from a press event. OPEN YOUR EYES!
jim 3:52PM (10/30/2009)
"...people who bought a little earlier."
Or people who would have bought months before but stayed out of the market due to personal economic uncertainty and without a compelling reason might have stayed out.
Yes C for C sped up some purchases but without interviewing each buyer its speculative to crunch some numbers and say that X sales would have happened in the near future anyway.
geo.stewart 3:54PM (10/30/2009)
if all it did was bring October buyers into august, then mftr would hate it. That's not good, that sucks. Mftrs want a nice steady stream so they dont have to deal with inventories and flux in demand levels.
I agree it brought in some buyers and that is a good thing but operationally, it was a headache.
sure wasnt worth it to me since I didnt buy a new car and yet, I'll end up paying for one
Aprime 4:45PM (10/30/2009)
TonyInMI: I'm on your side, but you listen too much to our right-wing columnists, they did fact-check one of the Palin skits during the last campaign.
chilipepper 1:40PM (10/30/2009)
Me thinks they dost protest too much.
I'm siding with Edmunds.
Government can't do anything right. ANYTHING!!
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sophie 1:49PM (10/30/2009)
if government were completely incompetent then i could go to your house right now (assuming you're not home) and steal everything you own. although i guess we could conceive of private anti-theft enforcement companies which could be contacted by your security system to go after me. i guess they would try to kill me if at all possible to make sure they get your stuff back, or you'd switch to a better enforcement company. but then they could just kill you if you switched. or at least kill everybody at the other enforcement company so you'd have to come back to them.
yeah it'd be totally different if government were literally incapable of doing anything right.
chilipepper 1:52PM (10/30/2009)
Flawless logic!
Iridium 2:01PM (10/30/2009)
Sophie,
I bet I could come to your house right now and steal everything you own, get in my car and drive away before any law enforcement official shows up.
My office was broken into and the alarm went off. I got a call from the security company right when the alarm went off saying the police were called and I need to go there to inspect the damages. The police station is 3 blocks away from my office and I lived 5 miles away.
I got to my office to find the front door broken. The second door was intact, the alarm must have scared the guy off and was still sounding. No police were there. I turned the alarm off and waited for the police. An hour went by and I called the station and they said they would send an officer right over. Another two hours went by with nobody showing up. I had to walk to police station to get a cop. The security company requires that a police officer inspect the intrusion.
Mind you this is in a city where there is a cop writing a parking ticket if you are 30 seconds expired.
Government is completely incompetent in all aspects other than taking peoples money.
sophie 2:07PM (10/30/2009)
i'm sorry but anecdotal evidence isn't as powerful as simply observing the state of the country. if your story is true, then the most obvious course of action for all in your vicinity is to steal anything and everything they can from everyone around them. and no one would work because of the complete lack of incentive; that is, anything they earned can be taken from them without law enforcement doing anything about it.
you are probably a moral, upright citizen who values work for the sake of work and condemns stealing because it is wrong, but i am an economist. and i believe people respond to incentives. if there is no incentive not to steal, people will steal. if there is no incentive to work, people will not work. unless you're suggesting that our country runs solely on moral incentives right now. that is quite a suggestion.
montoym 2:17PM (10/30/2009)
Simple answer here is that police departments aren't Federal Gov't agencies. I know the term Government does include smaller forms such as state and local, however, in this case, it's easy to understand that the Federal Government is what's in question here.
So again, the Federal Government does not run your local police department so any mention of how safe you are because of the police is moot.
The Federal Government is in charge of National Security and the defense of the country though and depending on who's running them, they do a good job with that. No one will dispute that our armed forced are the best-equipped, most-technological force on the planet currently. However, that is actually one of the enumerated duties of the Federal Government. Running auto companies and numerous other things they get into these days certainly go above and beyond their original intent.