The Overwrought GM Eulogies

End of an era. Fallen titan. Epic decline. Death of an American icon.

If you haven’t gotten the message by now, let me spell it out: The General Motors bankruptcy is a national buzzkill that officially signals the end of the glory days. The world no longer admires our products--or us. We’re a has-been nation. The party’s over, and there aren’t going to be any more parties.

So let’s all step outside for a moment. Have a good cry. Get it out of our system.

Done? Feel a bit better? Good, because it’s time to do what America has always been pretty good at: Get over it and move on to the next thing.

[See how GM gets its groove back.]

GM’s downfall is clearly a pivot point that reflects [insert cliché here], but it’s been happening for so long that the actual Chapter 11 filing was anticlimactic. On the Day Detroit Died, the stock market actually rose by 2.6 percent, on account of other economic news that wasn’t even that bright. “Just think of the returns one could see if all Dow components filed for bankruptcy,” quipped Pat O’Hare of briefing.com. “Maybe Chapter 11 is the path to new stock market highs after all.”

Car buyers, meanwhile, are flooding into GM dealerships, hoping for fire sales. Ford and other competitors are aggressively planning to fill any holes left by GM’s shrinkage into a more manageable company. New automakers are scheming ways to carve an opening into the U.S. market. Capitalism marches on.

[See the upside of economic carnage.]

The fact is, we needed the GM bankruptcy as a kind of purging exercise enabling us to move to the next phase of America’s socioeconomic evolution. It’s true that GM was a titanic, revolutionary company—50 years ago—that did more to build the American middle class than any other single corporation. It still employs a lot of talented workers and builds worthwhile products. There’s nothing good about the thousands of GM employees who have already lost their jobs, or will lose them over the next year. But we need to detach our national psyche from institutions like GM that stopped succeeding a long time ago.

GM attained the status of too big to fail. We used to associate “big” with “good.” Anybody still believe that? For 77 years, GM was the world’s biggest carmaker. For half of that time, it was the biggest because it was the best. For the rest of the time, GM was the biggest because it used to be the best. Over the last few years, former CEO Rick Wagoner had been forced to insist that GM would never relinquish the No. 1 spot to surging rival Toyota, even though everybody knew it was inevitable. The “No. 1” sideshow became a distraction when GM’s real problem was profitability. Its size, in fact, was the very thing standing in the way of becoming profitable.

[See how to find gold in a recession economy.]

Eras tend to begin microscopically but end with a bang. We often don’t even know when one has begun, but we go through the motions of national mourning when we sense that one is ending. “In a revolutionary age, the reputations of the great figures of the last age get destroyed,” says Joshua Cooper Ramo, author of the new book The Age of the Unthinkable. “Revolutions don’t just produce revolutionaries, they produce whole new casts of historical champions.” That forces us to develop new ideas about people and institutions we’ve become comfortable with, and discard atrophied assumptions.

If the GM bankruptcy signals anything cosmic, it’s that we need to think differently about the kinds of success we want to pursue and model ourselves after. GM may never again be the world’s most important car company. Nobody in China or Singapore is modeling their banks on Citigroup anymore. In less than a year, AIG went from being the world’s most admired insurance company to an international pariah.

[See how bailouts can butcher capitalism.]

But other parts of the American economy, like biotech, IT, higher education, Web innovation, product design, and maybe even useful forms of financial innovation that could rise from the ashes of Wall Street may very well serve as models the rest of the world follows. And in 30 or 50 years, we may mourn the demise of some new titans, marking the end of yet another American era. Our great-grandkids will get over it.