“The Obama administration on Thursday lashed out at a prominent critic of its Cash for Clunkers program, arguing that the popular trade-in initiative helped give the auto industry and the economy a much needed boost in the past few months.
In a blog post on whitehouse.gov, the administration argued that a report on Clunkers by automotive Web site Edmunds.com “doesn’t withstand even basic scrutiny” and is based on “implausible assumptions.”
On Wednesday, Edmunds.com released a study that argued Cash for Clunkers did not have a great impact on the auto industry. The report said that 690,000 new vehicles were sold under the program last summer, but that only 125,000 of them would not have been sold without the Clunkers rebates.” David Goldman, CNNMoney.com staff writer
Sorry to repost so much of the original article (I try not to do that) but I thought this summed up the point better than I could articulate it. What is even more interesting, however, is the point that is made later in the article, where the White House makes the claim that 1.7% of the 3.5% growth rate in the third quarter is because of the “Cash for Clunker” program. Really!? You mean…people didn’t really want to buy cars (or for that matter couldn’t afford to), however because the automobile industry was one of the “Chosen Ones”, they were artificially propped up? Using tax payers money, at that?! Well, I’m happy that the White House will admit to it.
The “Cash for Clunkers” program has, however, seeped through other industries. For example, the Post-Tribune reported yesterday that Arcelor-Mittal, one of the steel producing “giants”, reported a pretty decent profit for the last quarter. This may have worked to float these industries along for another 6 months or so, but I won’t count my chickens before the proverbial eggs hatch(or another year or so of positive numbers come my way).