The White House Stupidly Goes To War With Car Website Edmunds.com

[1.8Tsunami]

The White House Stupidly Goes To War With Car Website Edmunds.com
Joe Weisenthal|Oct. 29, 2009, 6:47 PM | 291 |5
PrintTags: Cars, Barack Obama
http://www.businessinsider.com
It is an odd, and we'd say regrettable, pattern of this White House that it lets itself get dragged down into fights with specific media outlets.

George W. Bush experienced acrimony with the New York Times, but for the most part, other than general frustrations of a conservatives administration, complaining about a liberal media, it was no big deal.

But in addition to Fox News, now The White House is going after highly-respected and influential car site Edmunds.com.

They're actually using The White House blog to dispute the site's analysis of Cash-For-Clunkers (via Detroit News).

The post is snarkily titled: "Busy Covering Car Sales on Mars, Edmunds.com Gets It Wrong (Again) on Cash for Clunkers"

Harsh!

Here's the full post:

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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. Like many of their previous attempts, this latest claim doesn't withstand even basic scrutiny.

The Edmunds analysis is based on two implausible assumptions:

1. The Edmunds' analysis rests on the 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. This analysis ignores not only the price impacts that a program like Cash for Clunkers has on the rest of the vehicle market, but the reports from across the country that people were drawn into dealerships by the Cash for Clunkers program and ended up buying cars even though their old car was not eligible for the program.

This faulty assumption leads Edmunds to a conclusion that is at odds with many independent analyses: Edmunds assumption that more than 80% of the payback from Cash for Clunkers would occur in 2009 isn't how many mainstream analyses, including Moody's and IHS Global Insight approach the problem (see pages 5 and 15 of this CEA report [PDF]). In fact, Deutsche Bank recently concluded that ?€œThe important takeaway from recent sales trends is that it suggests that there has been minimal 'payback' for the U.S. government's 'cash for clunkers' program."

2. Edmunds also ignores the beneficial impact that the program will have on 4th Quarter GDP because automakers have ramped up their production to rebuild their depleted inventories.

Major automakers including GM, Ford, Honda and Chrysler all increased their production through the end of the year as a result of this program, which will help boost growth beyond the third quarter. The actions of private market participants, who would not increase production if they didn't think demand for their product would be there through the end of the year, is a far better indicator of market dynamics - and one that Edmunds.com conveniently ignores.

Most importantly, this program is helping boost our economy and create jobs now when we need it most. In a comprehensive report, the Council of Economic Advisers estimated that the Cash for Clunkers will create 70,000 jobs in the second half of 2009. The strength of recent auto sales data suggest that, if anything, this projection underestimates the actual impact of the program. CEA's analysis is transparent and comprehensive, laying out all of its assumptions for the public to understand. 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:

http://www.Edmunds.com

[1.8Tsunami]

http://www.businessinsider.com/edmun...attack-2009-10

Last night we were shocked to see that The White House was using its blog to tear into car website Edmunds.com over some analysis it did of Cash-For-Clunkers. To recap: Edmunds.com says the program was a gigantic waste with little effect. The White House disagrees.

Anyway, Edmunds is sticking by its analysis, and it put out the following press release:



SANTA MONICA, Calif. ? October 29, 2009 ? Today the Department of Transportation and White House chose to respond to an analysis Edmunds.com released Wednesday that looked at auto sales this year and what sales volumes would have been had the popular Cash for Clunkers program never existed.

At issue is one point of the analysis showing the taxpayer cost for every incremental vehicle sold was $24,000. To be clear, Edmunds.com is not disputing the government's statements regarding total voucher applications, vehicles sold or voucher values. The key question 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. Cash for Clunkers was no exception.

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.

With all respect to the White House, Edmunds.com thinks that 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.

Isn't this a piece of good news we can all cheer?

We're on Edmunds side here. We haven't seen any evidence that the program was a massively expensive way of pulling demand forward, with little long-term to show for it.

An employee of a car dealership left this comment on the last post:

As an employee of a car dealership I will tell you first hand that the whole program was VERY temporary. Yes we broke every record we had ever set before. Sales are now lower than before due the the Cash for Clunker program. It was a great program and it did draw a bunch of people into the market that probably wouldn't have bought until this winter. The problem is: now we won't have the sales we would have had this winter. Everyone in the car business will tell you that November-February are the worst months for sales. Probably 30% of the sales that we made during the program wouldn't have happened until those bad months.

We're eager to see if The White House responds again.

[catmando]

Almost all car dealers use NADA instead of Edmunds. I wish they WOULD use Edmunds. My truck is worth almost $7000 more with them than NADA.

[nutsy54]

Fully transparent government, and complete freedom of speech... Just as long as you bow down and praise anything this Congress and White House does. Facts be damned!

The administration makes a mockery of itself every time they throw one of these tantrums. Next target: BusinessInsider.com

[DedicatedToLift]

Originally Posted by nutsy54

Fully transparent government, and complete freedom of speech... Just as long as you bow down and praise anything this Congress and White House does. Facts be damned!

The administration makes a mockery of itself every time they throw one of these tantrums. Next target: bodybuilding.com/religion+politics

Fixed

[BahadurShah]

lol@edmunds being highly influential & respected

[ElMariachi]

Once again, the most absolutely butt-hurt administration in recent memory. Obama's goons make Nixon's crew look like Carebears.

[Alpha_Papa]

Commenting on something is going to war?

You guys make it seem like Obama dropped everything for an emergency press conference.

[Moh7]

Originally Posted by Alpha_Papa

Commenting on something is going to war?

You guys make it seem like Obama dropped everything for an emergency press conference.

this.


They wrote about them in a blog....

[nutsy54]

And then come the apologists. Because nothing this White House does can ever be criticized or questioned. Sure it's OK for them to go after a fact-based article posted by the Press. After all, isn't that why the President's administration exists - to fixate over every single thing spoken or printed about them, then "correct" anything that isn't completely flattering and supportive?

[Alpha_Papa]

Originally Posted by nutsy54

And then come the apologists. Because nothing this White House does can ever be criticized or questioned. Sure it's OK for them to go after a fact-based article posted by the Press. After all, isn't that why the President's administration exists - to fixate over every single thing spoken or printed about them, then "correct" anything that isn't completely flattering and supportive?

Holy paranoia! You're still in the military? Dude, you need to lay off the internet and go relax somewhere. It's just comments on a blog...nothing to freak out about.

[potatoe]

This administration doesn't take critics very well. lol. He's going to have to new cabinet positions just to accomodate the media wars. lawl.

[r0gue6]

Originally Posted by nutsy54

Fully transparent government, and complete freedom of speech... Just as long as you bow down and praise anything this Congress and White House does. Facts be damned!

The administration makes a mockery of itself every time they throw one of these tantrums. Next target: BusinessInsider.com

Freedom of Speech.

http://en.wikipedia.org/wiki/Freedom_of_speech

More hyperbolic bull**** from you as usual. I love how responding to an opinion piece is now considered some sort of affront to Freedom of Speech. Go peddle your rhetoric to Fox News fans who would actually believe that ignorance.

I don't see anything wrong with responding to negative press, especially when the opinion being represented has little factual base and is pure speculation.

Originally Posted by potatoe

This administration doesn't take critics very well. lol. He's going to have to new cabinet positions just to accomodate the media wars. lawl.

I wish they would, it would be nice to keep the centrists informed of the misinformation being spread so that the next few elections won't be the same as the past. The Dems need to grow balls and stand up to the media attack.

[tts0lid]

apparantly freedom of speech is applicable for everyone except for the white house...

why not argue with the white house on what they are saying instead of just "OMFG THE WHITE HOUSE ATTACKS A WEBSITE"

open and free discourse means that BOTH sides get to make points.

[nutsy54]

Originally Posted by tts0lid

apparantly freedom of speech is applicable for everyone except for the white house...

why not argue with the white house on what they are saying instead of just "OMFG THE WHITE HOUSE ATTACKS A WEBSITE"

open and free discourse means that BOTH sides get to make points.

They are the Government. Everyone else is a private citizen. Hopefully you understand the difference. The Government doesn't have "free speech" to knee-jerk lash out at anyone who dares to point out Facts the White House would prefer were kept quiet.

(b) Edmunds clearly laid out their analysis method. The White House's response did nothing to disprove or invalidate that. They also falsely misrepresented what the Edmunds article said - since Edmunds solely looked at the massive cost of the program per vehicle, and not at the ultimate (if short-lived and artificial) economic benefits.

[gjohnson5]

Originally Posted by 1.8Tsunami

We're on Edmunds side here. We haven't seen any evidence that the program was a massively expensive way of pulling demand forward, with little long-term to show for it.

QUoting an article which admits it's biased is not proof or evidence
In fact it's proof that they probably don't know what they are talking about

[Alpha_Papa]

Originally Posted by nutsy54

They are the Government. Everyone else is a private citizen. Hopefully you understand the difference. The Government doesn't have "free speech" to knee-jerk lash out at anyone who dares to point out Facts the White House would prefer were kept quiet.

(b) Edmunds clearly laid out their analysis method. The White House's response did nothing to disprove or invalidate that. They also falsely misrepresented what the Edmunds article said - since Edmunds solely looked at the massive cost of the program per vehicle, and not at the ultimate (if short-lived and artificial) economic benefits.

Where in the constitution does it say that the executive branch does not have a right to make public statements?

[RIKTER]

One cannot control a population without controlling the means in which the populace get their news/info. Once you understand the end game, the rest makes sense.

[Dummkopf]

ITT Obama's nuthuggers nuthug

[gjohnson5]

Originally Posted by Alpha_Papa

Where in the constitution does it say that the executive branch does not have a right to make public statements?

I'm not sure why they care anyway
In this case the President isn't a citzen of the US
It's a citizen of Kenya...

Can't have your cake and eat it too

[SDMuscleBuddy]

Originally Posted by nutsy54

And then come the apologists. Because nothing this White House does can ever be criticized or questioned. Sure it's OK for them to go after a fact-based article posted by the Press. After all, isn't that why the President's administration exists - to fixate over every single thing spoken or printed about them, then "correct" anything that isn't completely flattering and supportive?

Using only those facts which support a hypothesis is not being "fact based". Criticizing the Administration in such a fashion and expecting the White House to ignore it and not rebut is just naive. If someone posted false conclusions about you, that you're a conspiracy theorist for example, don't you also get a little defensive?

Re: The OP. Calling this "war" is not only grossly overstating the fact, but it is this type of language that is causing so much division in this country.

[SDMuscleBuddy]

Originally Posted by RIKTER

One cannot control a population without controlling the means in which the populace get their news/info. Once you understand the end game, the rest makes sense.

Which is why we are under the rule of the corporatists.

[SDMuscleBuddy]

Originally Posted by nutsy54

They are the Government. Everyone else is a private citizen. Hopefully you understand the difference. The Government doesn't have "free speech" to knee-jerk lash out at anyone who dares to point out Facts the White House would prefer were kept quiet.

(b) Edmunds clearly laid out their analysis method. The White House's response did nothing to disprove or invalidate that. They also falsely misrepresented what the Edmunds article said - since Edmunds solely looked at the massive cost of the program per vehicle, and not at the ultimate (if short-lived and artificial) economic benefits.

The blog pointed out the effects of the rebate program that Edmunds ignored. Hardly a knee jerk reaction or lashing out. And, yes, the government does have the right to respond to criticism. Always has, always will. You can see this in action on almost any Sunday morning political affairs program.

You're "cost per vehicle" figure is totally based on voodoo mathamatics. Sure they laid out their methods. That doesn't make them valid.

[leafs43]

Edmunds is an outside unbiased observer who judges what actually happened. The white house, who put forth the cash for clunkers, wants it to appear to be a success so are absolutely biased in their assessment.


I take Edmunds assessment over the White House's assesment because the white house is not independent in the matter.

[SDMuscleBuddy]

Originally Posted by leafs43

Edmunds is an outside unbiased observer who judges what actually happened. The white house, who put forth the cash for clunkers, wants it to appear to be a success so are absolutely biased in their assessment.


I take Edmunds assessment over the White House's assesment because the white house is not independent in the matter.

What "assesment"? Their only conclusion is that we spent 24,000 per vehicle - based on a guess of how many more cars were sold than had we not implemented C4C. Other independent sources estimate that we increased GDP by 1.6% because of it. That's the real bottom line.

[leafs43]

Originally Posted by SDMuscleBuddy

What "assesment"? Their only conclusion is that we spent 24,000 per vehicle - based on a guess of how many more cars were sold than had we not implemented C4C. Other independent sources estimate that we increased GDP by 1.6% because of it. That's the real bottom line.

You are getting it wrong. The government spent 24,000 per car for the C4C program.

So not only does consumers pay for the car for whatever they were worth, the government ending up subsidizing 24,000 dollars on top of that. That means $30,000 cars actually cost $45,000, split between the consumer and the government. Only in some bizarro world would this be a good thing. That's why Edmunds is calling them out. Each car cost the taxpayers 24,000.

[SDMuscleBuddy]

Originally Posted by leafs43

You are getting it wrong. The government spent 24,000 per car for the C4C program.

So not only does consumers pay for the car for whatever they were worth, the government ending up subsidizing 24,000 dollars on top of that. That means $30,000 cars actually cost $45,000, split between the consumer and the government. Only in some bizarro world would this be a good thing. That's why Edmunds is calling them out. Each car cost the taxpayers 24,000.

According to Edmunds we spent 24,000 per car. According to me, 690,000 American families saved an average of $4,000 on a new vehicle, we replaced 690,000 less efficient vehicles, and increased the GDP by 1.6%. We are both right, and are saying exactly the same thing, but Edmunds is only looking at the "minuses" column where I'm looking at the "pluses". Do the pluses outweigh the minuses? Was this worth three billion? IMO it was.

[Alpha_Papa]

I love how you hysterical tools are ignoring my two questions.

Man up and find something VALID to whine about. We have two pointless wars, an incredible debt, outragious long term commitments to the military/medicare/ect that is increasing in amount and revenues dropping. And you guys are whining because they released a statement in reply to a websites article? It's that type of patriotism that has led to our current status quo.

[BBmisc420196]

Originally Posted by BahadurShah

lol@edmunds being highly influential & respected

Why? Ive always respected their site almost as much as consumer reports.

[thatolchestnut]

Originally Posted by SDMuscleBuddy

According to Edmunds we spent 24,000 per car. According to me, 690,000 American families saved an average of $4,000 on a new vehicle, we replaced 690,000 less efficient vehicles, and increased the GDP by 1.6%. We are both right, and are saying exactly the same thing, but Edmunds is only looking at the "minuses" column where I'm looking at the "pluses". Do the pluses outweigh the minuses? Was this worth three billion? IMO it was.

Ya screw those jerks for looking at the minuses column. I always ignore negative numbers when they come up in my equations; they're just so pessimistic. I get the problems wrong too, but I think thats ok. I'd rather be positive and ignore information just so I can keep my naive outlook.

Incremental analysis is a highly effective method of considering economic performance. The white house cannot justify the program with financial calculations, so they are just going to propaganda. IE "Look at all these cars we sold!" Those are really big numbers!!!! Look! A big number HAS to be good right!