As curtain closes on 'cash for clunkers' what did we learn?


As the CARS program -- aka "cash for clunkers" finishes up today, it marks the end of a very short, yet exceedingly contentious government stimulus program. As the most visible of the government's economic growth moves, it has spent roughly $3 billion, inspired the purchase of hundreds of thousands of cars, and has offered a shot in the arm to an industry that many considered moribund. In the process, it has also provided some vital lessons for policymaker preparing future programs.

DailyFinance's Peter Cohan attributes much of CARS' success to "nudgenomics," or the act of creating policies that "nudge" consumers to spend their money in the most productive way. In this case, he argues, the program wedded environmental improvement, economic stimulus, and customers' self-interest in a way that drove people to pour money back into the economy.

Originally published