White House Lost $24,000 Per Vehicle in Cash For Clunkers But Will Make It Up In Bullshit Volume (Loudness)

Via Instapundit via The Business Insider comes this Detroit Rock City News story of internal combustion, international intrigue, and, yes, unbridled enthusiasm:

The White House said [totally great car-buying, car-selling, and all-around-awesome-info site for every goddamn great and awful car website] Edmunds based its analysis on the "implausible" assumption that "the market for cars that didn't qualify for cash for clunkers was completely unaffected by this program. 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 stands by its analysis.

"Instead of shooting the messenger, government officials should take heart from the core message of the analysis: The fundamentals of the auto marketplace are improving faster than the current sales numbers suggest," [Edmunds jefe Jeremy] Anwyl wrote.

The central issue, Anwyl said, "is how many of these sales would have occurred anyway. Apparently, the $24,000 figure caught many by surprise. It shouldn't have. The truth is that consumer incentive programs are always hugely expensive when calculated by incremental sales -- always in the tens of thousands of dollars."

Edmunds rejected the White House suggestion that people got caught up in the excitement of the program and bought cars, even if they didn't qualify. And it discarded the notion that automakers boosted production solely because of the program.

"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," Edmunds wrote.

More here.

And take it away, Uncla Sugar:

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Johnny Longtorso||

    Edmunds is racist.

  • John Tagliaferro||

    That never stops being funny.

  • ||

    1.66% of the reported GDP growth was CFC I think...we'll see what's the thruth when the next quarter's lies are reported.

  • ||

    Edmunds.com is not a "REAL" news site.

    Pay no attention to the man behind the curtain.

  • Anita Dung||

    Edmunds provides talking points to FOX News!

  • ||

    Is there no battle, grudge, or resentment that this open and transparent administration, these harbingers of hope and change, will not engage?

  • Russ 2000||

    You are seeing the personality of Rahm Emmanuel shining through. He is a contemptible sociopath who attracts similar persons and makes Joe Lieberman look good in comparison.

  • Xeones||

    Lorenzo: no.

  • ||

    The White House blog response is ridiculous. First, the CEA report is from September 10, and made a prediction about the September 2009 sales volume that was too optimistic, arguing that the decline from sales being pulled forward would be smaller than it was.

    Second, the CEA report itself noted estaimes from outside groups that were both less and more optimistic than its own, and said that they were all plausible as the forecasting was difficult, but that the CEA agreed with its own prediction.

    Third, which analysis is correct will depend on the October and November numbers. The CEA argued that we should see essentially no C4C hangover effect the rest of the year (besides September), that the only month with a decline from sales pushed forward would be September. Edmunds argues that we will see declines in October and November from what would otherwise be expected.

    The shrill response was absolutely unnecessary about a forecast that the CEA itself says is fraught with uncertainty. We don't know which report is closer to correct, but the September numbers already indicate that the "optimistic" CEA numbers are dead wrong, but their other two possibilities only look less likely.

  • HS Truman||

    If you can't take the heat get out of the kitchen.

  • ||

    The dispute is about how many of the C4c sales were only pulling forward sales in the short-term, and how many would not have happened for years. The CEA admits that theoretically a model like Edmunds's is possible, and was just basing its prediction on what happened after post-9/11 and the 2005 employee pricing sales events.

  • Wicks Cherrycoke||

    I'm surprised the White House even answered Edmunds. Usually they limit their responses -- excuse me, truth-telling -- to easy targets like Glenn Beck, and ignore those who present hard facts and evidence.

  • ||

    What will be interesting to observe is the point where this willingness to lie and fight over petty issues will translate into pretty much everyone distrusting the administration. Somewhere around 50-60% of us already think Obama is full of shit. At some point, most of the rest will follow.

    This administration is a course in ineptitude. Even their lies are poorly executed.

  • John Tagliaferro||

    Obama is the 21st century Carter?

  • ||

    Yeah, except I don't remember this much bullshit. Then again, I was young during the Carter years.

  • John Tagliaferro||

    Sadly, I was young enought to buy into it at the time. Luckily, I was too young to vote.

  • ||

    I think I realized I was a libertarian during that administration, though I'd have become one even if Carter had been George Washington.

  • ||

    I became a Republican during the Carter administration, when he decided to punish the soviets by making me register for involuntary servitude. I gave up on the Republicans when Reagan failed to stop draft registration, after having called it "unconscionable" during the campaign.

    -jcr

  • ||

    Hey, I tried to take that bastard out, but alert secret service agents wrestled me to the ground.

  • ||

    Well when it comes to US POlitics, Ignorance is Bliss!

    JR
    www.complete-privacy.at.tc

  • Kevin||

    It is always a good day when you can work in an Uncla Sugar clip.

  • ||

    How can you deny that $4,000 is a huge incentive to buy a car? Have you even seen that much money? That kind of money won't even fit into a brief case that has a bunch of other stuff in it. Big time money. And it only cost $20,000 to give away that $4,000! I'll bet $20,000 doesn't even fit into a brief case with other stuff in it!

  • prolefeed||

    $24,000 lost per vehicle isn't at all implausible. That simply assumes that 1 out of 6 of the C4C sales were ones that wouldn't have occurred for anytime soon, versus 5 out of 6 sales cannibalizing the next few month's sales.

    When it comes to understanding economics, I'm inclined to trust Edmund's analysts over Obama's folks, given the Obama administration's ongoing display of cluelessness about economics.

    I mean, can you trust projections about Cash For Broken Windows from the folks who created it?

  • ||

    Ford gave numbers of about 20 to 30%. GM gave numbers of 60%. Deustche Bank was quite positive on the program, as was Moody's. The CEA report gives one or two projections that were even more negative than Edmunds.

    It's ridiculous to come out swinging on the basis of a projection that admits we don't have a good precedent or know the answer. It's especially bad to use a report from September 10 against a report from October 29, especially since we'll have a much better idea after the October and November sales data come out as well.

  • ||

    If the president were to nuke an American city, wouldn't rebuilding it stimulate the economy?

  • ||

    Of course it would! We could all be rich if we just had enough plutonium!

  • LiberTARDian||

    Conservatives are so funny.

  • Warty||

    I'd say the tard is Edward/Lefiti/Morris, but it seems more combative and even more unpleasant. I'd say we have a whole new troll on our hands.

    Shut the fuck up, tard.

  • Tman||

    The CFC was bad enough but what drives me crazy is that GMAC is about to get another multi-billion dollar bailout, their THIRD ONE THIS YEAR.

    The Detroit News reports, "The Treasury Department plans to inject up to $5.6 billion in new capital in GMAC -- the latest effort to help the auto finance giant, a government official confirmed late Tuesday." The government will accept preferred shares of stock in return. "The new government infusion would be on top of $12.5 billion in government support extended since December. In May, the Treasury Department injected $7.5 billion in GMAC, took a 35.4 percent stake in the company and appointed two directors."

    The failure of CFC's is peanuts next to this madness. If ever there was a company that deserves to fail it's GMAC. CNN Money notes that the company "has lost $4.6 billion so far this year and has posted losses in seven of the past eight quarters, as vehicle lending has plunged along with demand for cars and its subprime mortgage loans have gone bad."

  • ||

    Is anybody in the white house not mentally challenged? I just saw this link in the WSJ op-ed page. Any surprise we have monkey boy II in the white house today? Look at the stupidity of the people who put him there.

    http://pewresearch.org/pubs/13.....ws-iq-quiz

    It's fucking multiple choice. Maybe the Democrats, high school (or less)educated people, and 18 - 29 year olds like to mess with pollsters by answering wrong.

    I'm running for office on the "let's build concentration camps and rid ourselves of 2/3 the population" ticket.

  • DT||

    It's working in Detroit.

  • gyc||

    Obama and his administration need to grow the f up. It's unseemly for the White House to go after everything that portrays the White House or its policies in a negative light, especially given the tone of the White House response.

    Christ, and to think how some pundits were saying with a straight face that adults would be back in charge when Obama took office.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement