Here comes “cash for appliances”

Friday’s Retail Wire panel discussion focused on a new government program to stimulate sales of new, more energy-efficient appliances. Good idea or bad? Here’s my point of view:

Based on the Cash for Clunkers program, there was tremendous pent-up demand that is likely to be followed by a sales slide now that the program is over. But without the program, would there have been a surge in demand at all? Not very likely. It’s hard to say whether the car program will have any sort of ripple effect on overall consumer spending, but at least it puts laid-off auto and partsworkers back on the line to replenish inventory.

So “Cash for Appliances” may have a similar benefit, as long as it’s explained more clearly and administered more smoothly than “Cash for Clunkers.” (Hmmm…maybe that 20-year-old wall oven with a broken timer light qualifies?) $300 million in the scheme of things is a small price to pay for the likely benefits, although anti-interventionists will argue that any price is too high.

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