As General Motors Goes...

By Wednesday's end, Congress looked poised not to act on any measures to secure the nation's failing big car companies, which sent Wall Street plunging downward again.

Meanwhile Paul Krugman and others warned that the failure of one of these companies--General Motors seems the most vulnerable--could lead to a cascading catastrophe: and as General Motors goes, so goes the nation.

There are competing plans for quickly dispersing some $25 billion, but the Bush administration won't act on its own, and Congress apparently won't either. Some argue for letting these companies go bankrupt, or for a bankruptcy plan tailored to these companies so they can reorganize with the least pain all around. Others (like Barney Frank) argue that everything bankruptcy permits can be done without it--while the downside of bankruptcy is penalizing workers and stalling out car sales even further.

Once again, the warnings are very dire--especially that GM could fail and the cascade could begin before Obama and the new Congress take office, so that he may inherit not a bad recession but an onrushing Depression.

There's a certain apocalypse fatigue involved, as well as a suspicion of the boy who cried wolf. However, as a book about how the American steel industry collapsed noted in its title, in that old story, the wolf finally came.

But if crossing the point of no return on a major longterm blow to the American economy and America's place in the world doesn't focus enough minds in Washington, maybe this will:

China would maybe like to buy an American car company or two. Like General Motors.