A big "Thank you" to the White House blog team for a witty and perceptive account of Cash for Clunkers' real contribution to our economic recovery.
If you haven't read about the brush-up prompting that White House response, it began with a report from Edmunds.com that minimized the impact of Cash for Clunkers.
You don't have to look too far beyond Edmunds to find loads of support for a positive analysis of this successful program:
- Ford Motor Co. estimates 30-40% of Cash for Clunkers sales were truly incremental--an increase of 210,000 to 280,000 vehicles, or twice what Edmunds asserts).
- Moody's Investors Service estimated 60% of sales were incremental or about 420,000 extra vehicles.
- Mike Jackson, CEO of AutoNation, told the Detroit News': "Simply put, they [Edmunds] have misrepresented the facts, and the White House is completely justified in calling them out on it. Edmunds' political views have tainted their usual rigorous approach to research. We believe that the incremental sales are over 500,000 new vehicles."
But, let's also not forget about the larger goal of the Cash for Clunkers program: to jump-start this economy. By that measure, the 1.7% of our 3.5% growth this past quarter attributable to the automobile industry reveals that this program has done exactly what was intended.
Others agree:
- George Pipas, sales analyst for Ford: "They [Edmunds] missed the point. The whole purpose of the program was to provide some kind of catalyst to kick-start the economy, and by all accounts the extra production that was added this year was a boost to the economy."
- Jared Bernstein, White House economist: "Some sales in Cash for Clunkers were sales that would have occurred later than when they did. That's okay, especially when you look at today's GDP report where we are posting positive growth; we really need that growth now. Pulling sales forward is actually helpful."
It's no secret that I believe Cash for Clunkers was wildly successful. But, I will say that I like the closing suggestion of the response I read on Edmunds.com, and I think it's well worth sharing:
"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."
That's something I hope we can all agree on, and celebrate.
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