Joe Weisenthal
The Business Insider
Oct. 30, 2009
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.
The article continues at The Business Insider.
