PLANNED OBSOLESCENCE BECOMES PUBLIC POLICY. A few days ago, I provided an interview to The Daily Herald for an in-depth report on cash-for-clunkers that is still in press. Now, from the same source, comes news of a similar incentive to buy new appliances.

This year's stimulus bill funded a $300 million program that will offer rebates of varying amounts - possibly up to $200 - to buyers of energy-efficient appliances and other products that carry the "Energy Star" label.

To some extent, my response to this program is similar to my reaction to cash for clunkers. It will help move inventory out of showrooms, and retailers might want to replenish inventories. There's less assurance that idle factories will again be humming, as appliances, like cars, are postponable items. There's less of a cascading of older appliance models to resale than goes on with cars. I'd have to research one other point, but if Energy Star compliant appliances tend to be the larger models, the energy intensity of a range or refrigerator of a given size decreases, but people who are looking for a smaller model will be disappointed.

Both cash-for-clunkers and appliance replacement subsidies take as given the current productive capacity in automobile and appliance manufacturing. Bearing in mind the adjustment cost that automobile and appliance workers would face, is it any better for the government to keep the existing capacity active than it is for the manufacturers (per John Kenneth Galbraith and Vance Packard) to do so?