October 30, 2009

White House Blog Whines About Edmunds’s C4C $24K/Car Claim, Ignores Current Consequences

cry-baby-cartoonWe’re just going to have to get used the fact that we’re long past the point where we should expect dignity and stick-to-the-facts restraint from this White House. Going after its critics is something the previous Bush 43 administration should have done more, but on the rare occasions when it did, it conducted itself and framed its language appropriately.

Such is clearly not the case with the current bunch, which more and more looks like a collection of thin-skinned crybabies than the occupiers of the highest administrative perch in the land.

One of the latest examples comes from Macon Phillips at the White House blog. In a post that, except for the presence of expletives, reads more like something you might find at a far-left blog than as a thoughtful riposte, Phillips chooses to go after Edmunds.com, a leading car information and valuation site, for daring to claim, as noted yesterday by NewsBuster Julie Seymour, that the government spent about $24,000 for each incremental Cash for Clunkers sale while the program was in place.

Here are some excerpts from Phillips’s 12:20 p.m. October 29 post, including one assertion (bolded by me near the end) that he should have known better than to have made:

Busy Covering Car Sales on Mars, Edmunds.com Gets It Wrong (Again) on Cash for Clunkers

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.

…. 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.

Geez, Macon, a week earlier, an unbylined Associated Press report told us what the real results of the increased production you celebrate have been (bold is mine):

Spending on customer incentives like low-interest financing and rebates soared in October among auto manufacturers, according to the auto research Web site Edmunds.com, as carmakers seek to clear out old inventory that piled up after the Cash for Clunkers program ended.

Automakers ramped up their production in recent months in response to the wildly successful clunkers program. Now that sales have leveled off, inventories have piled up again and automakers are eager to clear dealer lots, Edmunds said. Luxury models and trucks are being discounted “particularly heavily,” Edmunds Senior Analyst Jessica Caldwell said.

General Motors Co. has been particularly aggressive in its incentive spending, offering zero-percent financing on several models.

I suppose the White House will now start going after Edmunds for reporting actual market observations. Or perhaps it will “suggest” that the wire service look elsewhere for “more reliable” car-market info. Or perhaps the AP will do so on its own to avoid making waves.

In terms of the current business situation — In a normally functioning vehicle market, manufacturers would be getting continued and more reliable market feedback on sales results and customer reactions not distorted by government largesse, and would be in better position to adjust their production levels to what’s happening out there on this planet, in this country. Instead, what appears to have happened is that the automakers, likely misled to an extent by an establishment press that touted C4C’s supposedly wild success (perpetuated by AP above) — and perhaps in the cases of government-controlled General Motors and Chrysler, pressure to ramp up recalls of laid-off employees — were temporarily transported to the Obamulan galaxy. In this unfamiliar faraway fantasy world, where actions appear to have no financial consequences, they interpreted the C4C’s results as a false signal that the vehicle market might be recovering more permanently and fired up the production lines. Now, having returned to earth, their heavy reliance on incentives strongly indicates that such is not the case.

If Macon’s analysis is reflective of the thought processes higher up the White House’s food chain, our economy is in the hands of people who are spending way too much time in another world that isn’t the one the rest of us are experiencing on the ground.

But getting back to fundamentals — Clearly, it’s not enough for Phillips to dispute the Edmunds analysis, which is of course subject to scrutiny like any other. From a position of perceived power as a de facto administration spokesperson, the White House blogger clearly made it a point to ridicule and disparage Edmunds, sending a clear message to anyone else considering dissenting from what the White House wants have framed as the conventional wisdom that they will be subjected to similar treatment.

This AP search on “Edmunds” (showing only the incentives-related item), meaning that the “Essential Global News Network” hasn’t deigned to take notice of Phillips’s heavyhandedness. How convenient. Way to speak truth to power and stand up for the little guy, AP.(/sarcasm).

The best establishment press coverage of the situation I found was at the Detroit News. Writer David Shepardson did a good job of analyzing the arguments, but dodged the issue of White House ridicule and intimidation.

If something like this had come from Bush 43′s White House, the cries of “stifling dissent” from the establishment media would have been loud and long. Though others have picked up the story, their coverage is far more muted compared to what we would likely have seen just a year ago.

Top image was obtained at this link.

Cross-posted at NewsBusters.org.

Health Care: The ‘We Do What We Want, Bleeeeep You’ Congress

Filed under: Economy,Health Care,Taxes & Government — Tom @ 9:16 am

Jefferson Airplane/Starship guitarist Paul Kantner is the original source of the cleaned-up quote. He sent it to Rolling Stone, which published it in its original form in 1978 after Dave Marsh’s largely scathing review of the band’s “Earth” album in March 1978.

Kantner’s quote is my post title because it’s what Nancy Pelosi and the radicals running Congress are telling the American people. Unlike Kantner, who was declaring that he and his legion of musicians would pursue whatever they defined as artistry, Rolling Stone be damned, Nancy Pelosi and her crew’s “Bleeeeep You” declaration wishes to foist their twisted, statist version of a health care system on all Americans — the public’s clear opposition, and the measure’s obvious unconstitutionality, be damned.

This IBD editorial describes it:

A 1,990-Page Medical Monstrosity

Speaker Nancy Pelosi’s cry in unveiling the House’s massive reform bill might as well have been “Viva la health care revolution!” America never voted for change like this.

Just as most congressional Democrats refused to listen to the angry public at town halls in the summer, Speaker Pelosi was not interested in ordinary Americans attending the outdoor rally on the West Front of the Capitol, where she and her fellow House Democrats rolled out their 1,990-page monster health reform bill on Thursday.

YouTube recorded someone not on the RSVP list being refused entry and asking a staffer why the announcement of legislation that will radically affect the lives of all Americans isn’t open to the public. “Because that’s how we’re handling this event,” she told him.

Truth be told, most lawmakers are excluded too. As the Hudson Institute’s Hanns Kuttner noted on the National Review Web site, you would have to devour 221 pages a day to have read this life-changing legislation in its entirety before it comes to a vote, promised for before Veterans Day, Nov. 11.

Weeks after its unveiling, new tricks are still being discovered within the Senate health bill. Kaiser Health News’ Julie Appleby reported Thursday that, despite claims the bill will limit what those in the lower and middle income groups will pay for health insurance, “The fine print shows that, over time, the premium costs could rise well beyond those caps.”

The reason for this, Appleby explains, is “the cost of coverage would shift from a percentage of income to a percentage of the premium, no matter how high the premiums go.” This will be a big, unpleasant surprise for the working middle class.

Washington Post columnist Harold Meyerson on Wednesday revealed that the Senate bill’s excise tax on “Cadillac” plans “targets a lot of Chevy plans as well.” The tax follows a formula based on the consumer price index plus 1%. But if medical costs and insurance premiums rise significantly higher than the CPI — a near sure thing — a lot more plans get taxed.

Reminiscent of the Alternative Minimum Tax, a measure to soak the rich will end up drowning Joe Sixpack.

…. What similar horrors await detection within Nancy Pelosi’s 1,990-page behemoth? Time will tell, but it may take a lot more time than the 13 days House Democrats are giving America to digest this revolutionary proposal.

…. Both the House and the Senate are set to wreck the greatest health care system in the world — unless those now taking it for granted raise a ruckus, and fast.

Positivity: FOCUS conference ‘Made for More’ to be held in Orlando

Filed under: Positivity — Tom @ 8:53 am

From Orlando, Florida:

Oct 29, 2009 / 04:39 pm

The Fellowship of Catholic University Students, a college campus outreach program focused on bringing students to Christ through Bible studies and personal relationships, will host a national conference over the holidays in Orlando, Florida.

FOCUS hosts a national conference every two years, and past conferences have attracted in excess of 3,000 students. Featuring live music from acclaimed Christian recording artists, Eucharistic adoration,
breakout sessions, a comedian and a variety of speakers.

Students will have the opportunity to hear music by Matt Maher, a contributing artist for Life Teen, and Matthew West.

Conference attendees will also hear talks by Fr. Benedict J. Groeschel, CFR, founder of the Franciscan Friars of the Renewal; Archbishop of Denver Charles Chaput; FOCUS founder Curtis Martin and three professors from the Denver-based Augustine Institute. Author and speaker Matthew Kelly, whose message of living God’s will by becoming the best version of yourself was inspired by the Second Vatican Council’s universal call to holiness, will also speak at the conference. ….

Go here for the rest of the story.

A Reality-Based Look at 3Q09′s GDP (Plus IBD Update)

Filed under: Economy,Taxes & Government — Tom @ 12:09 am

Anyone still operating under the illusion that Thursday’s GDP report showing an annualized growth rate of 3.5% during the third quarter is anything to get excited about, or represents anything remotely sustainable, needs to read and digest Karl Denninger’s take (or I should say takedown) at the Market Ticker (HT to previous post commenter baqueronman).

Do read the whole thing.

Denninger gets to a GDP contraction of almost 1.5% after subtracting the impact of Cash for Clunkers (-1.6%), the increase in government purchases of goods and services (-2.37%), and the inventory build-up (-0.94%).

I disagree with the direct impact of his second item, which I think is half of what he claims (Uncle Sam’s purchases of goods and services are about 15% of GDP, not 30%, even though his tax burden is 30% or more). I’m also not ready to dismiss the inventory situation as a legitimate element of growth, if it reflects taking levels back to where they have to be to serve customers; to the extent they might be based on overoptimism, that would be a problem.

If you take away what I think is the correct government effect (-1.18%) and ignore inventories, you’re left with a positive 0.66% (3.5-1.66-1.18) — and you still wouldn’t be done. From that you would have to subtract an unquantifiable amount of personal consumption supported by the $8,000 homebuyer credit and the massive increases in transfer payments we have seen, especially in Social Security, before you could begin to approximate privately-driven GDP in this going-statist economy. That effect would certainly send that version of GDP into negative territory.

Some of the Market Ticker tabulator’s concerns about data quality (remember today’s report is Uncle Sam’s “advance estimate”) indicate that we could see a bit of a reduction in today’s reported number by the time it gets finalized just before Christmas. If so, that would make GDP net of artificial stimulants even more negative.

But Denninger’s biggest and most important point is that declining incomes can’t support future growth, and in fact point in the opposite direction:

Forward the big problem is the deterioration in personal income. You can’t spend what you don’t have without credit creation, and that’s fallen off a cliff. The Fed’s credit reports continue to come in with huge contractions – this should not surprise, as demanding that banks lend to people who are seeing their income shrink is into the realm of pure idiocy.

…. You cannot have an economic recovery when on a q/o/q basis real disposable income is contracting at a 7.4% annual rate and worse, the spread between nominal and real income is widening, indicating that mandatory purchases such a(s) food, energy and health care – are increasing.

Not to mention the fact that the administration and Congress are intent on vastly increasing the cost and/or availability of the second and third items. Perhaps, if we’re lucky, we’ll still be able to eat.


UPDATE: IBD’s take

In late July, economist J.D. Foster of the Heritage Foundation put it succinctly: “This is no longer an experiment in economic policy. The results are in: Keynesian stimulus does not work.” This GDP report doesn’t change that conclusion a bit.

If that’s so, our only hope going forward is the private economy. Though hindered by massive government intervention in housing, banking and industry, it’s still the most resilient in the world.

Businesses and households have cut spending to the proverbial bone. Now they’re reaping the first benefits of all that pain.

Yes the “pain” has been felt by businesses and business owners, but it’s been worse for those thrown out of work, and those who are working less than they want to.

The immature collection of crybabies in the Obama administration wants to keep blaming Bush 43 for why we are where we are. That’s obviously false; it’s been their POR (Pelosi-Obama-Reid) Economy since the summer of last year. Even if the administration’s “it’s Bush’s fault” lie resonates with some, it has a limited shelf life. At some point, for those whose don’t get it, it may remain Bush’s fault for causing, but it will be this administration’s fault for failing to fix, and in fact making it worse.


UPDATE 2, Nov. 3: Comprehension-impaired folks not worthy of linkage are conveniently misinterpreting the above narrative as proof that the stimulus “worked.”

ROTFLMAO — What are we going to do, go into hundreds of billion more in debt every quarter in a never-ending quest to keep GDP positive, regardless of the long-term consequences? Even if we wanted to (Paul Krugman at the New York Times is apparently among those who would do this, saying that “he stimulus was far too small given the scale of our economic problems”), it’s NOT sustainable.

The point of course is that the real, non-steroid-treated economy either barely grew or contacted a bit.