Thursday, October 29, 2009
The White House is in sharp disagreement with a new report by Edmunds.com indicating that the Cash for Clunkers program cost some $24,000 per vehicle when the program's total cost is spread out over the number of "incremental" cars sold.
As was the case for the homebuyer tax credit, said to cost $42,000 for each home sale the program spurred, there seems to be a fundamental disagreement over how many sales were made that would not otherwise have been made.
Edmunds claims to have had a crack team of PhDs and statisticians working on this problem, crunching the numbers, the end result obviously not to the liking of staffers at the White House. Based on the graphic in the last post, it sure looks like there was some sort of an outside influence involved.
According to this story in the Detroit Free Press, the motives of Edmunds are political.
But Mike Jackson, CEO of AutoNation, also defended the program. Of Edmunds, he said: “Simply put, they’ve misrepresented the facts, and the White House is completely justified in calling them out on it. It would appear that their political views have tainted their usual rigorous approach to research."I've found the Edmunds.com website to be quite helpful over the years. In fact, it's pretty much indispensable if you're trying to decide between many different makes and models before making an auto purchase.
But, they've got a political agenda too?
The news outlet that may not be a real news organization filed this report, which, aside from the typos in the first paragraph, looked pretty professional to me.
The Obama administration (White House and Transportation Depatment) did some heavyweight policy sparring with Edmunds.com today over criticism that Cash for Clunkers might have cost taxpayers $24,00o per vehicle sold.While not a regular reader of the White House blog, that particular item linked to above (and again here) had a doozy of a headline:
Edmunds.com came to that figure by estimating that only 125,000 of the Cash for Clunker program's 691,000 documented vehicles sales were a direct result of cash incentives.
The White House fired back as did DOT, arguing in pretty strong language, alleging that Edmunds' was calculating mystery auto sales on Mars and missing real show-room deals in the grand old USofA (okay, it didn't say the USofA part).
I asked top White House economist Jared Bernstein about the Edmunds.com flap late Thursday. Here's his answer.
"It may well be the case that some of the sales in Cash for Clunkers were sales that would have occurred anyway, but wouldn't have occurred when they did. In other words, I'm sure that some of those sales were pulled forward - maybe a quarter, maybe 6 months, maybe a year. And that's okay, especially when you look at today's GDP report where we are posting positive growth and where consumer durables including autos is a big contributor, we really need that growth now. Pulling sales forward is actually helpful."
Gets It Wrong (Again) on Cash for Clunkers
Apparently there's some history between these two...