Chances are that when the federal government's "Cash for Clunkers" incentive program was implemented in the summer, questions of its impact on the scrap industry was pretty low on the administration's list of priorities.

The economy was on the rocks, General Motors and Chrysler were bankrupt and the government was looking for a practical, demand-driven initiative that would do something to get money flowing through the economy again.

With that aim in mind, the program was a huge success—so much so that its funding was exhausted well before the pent-up demand for new vehicles played itself out (even though a look at the success of similar initiatives in Europe might have provided a hint that there was plenty more upside than the...