Why planned obsolescence and replacement is working as the main factor in our new economy? Or is it how do we plan new economy?
The plan for demand side economy is based on per capita income. The first step is looking at the income per month. One fourth of that income is divided for shelter, auto, food and other parts of life's necessities. So, the income is always hopefully adjusted to meet all ends.
Now that $7/hr wage is achieved, auto gets $220/month, but rent of $650 requires sharing an apartment with two other $7/hr wage earners. $19/hr wage is the middle class of our citizens, who can afford a small apartment and car, and all other amenities.
This wealth factor now must be factored into automobile obsolescence, which should be a 6 year cycle for a $12,000 car. The car after 6 years will be worth $4-6,000 for a down payment towards another new car. The theory of planned obsolescence is so that there are customers for new cars each and every year.
The auto obsolescence example is carried into all walks of life. It will include any and every product and service cycles. New will replace the old, so the economy will be steady except for population growth. Overproduction of some products will drive prices down(deflation) and the savings will promote job creation for other products in demand(A rolling economy).
So much for that, thank you, Alfred P. Sloan(the inventor of obsolescence and replacement theory at GM). Wall street, therefore, will be demanding all the top management of public corporations to plan their obsolescence and replacement to steady their performances and earnings. |
