It’s time to dump the myth of the Great Brand.

This is the Christmas of the closeout sale, a holiday season in which the main question for some of the country's leading retailers is not how much they will sell today but whether they will be around tomorrow. What was a few months ago pegged as the year that every middle-class house would get the mega-zoom camera and the surround-sound home-theater room is instead turning into a year of new austerity that has to give pause to even the most fervent anti-consumer. To all the received ideas of the ever-levitating economy that are being turned inside out and ripped apart, it's looking like before the next months are out, we may be able to add one more dislocation: the implosion of the Great Brand Myth.

An obsession with the power of "The Brand" was one of the hallmarks of the economic era that has been coming to an end in recent months. The Great Brand Myth says that the value of a great company rests not just in what it makes and sells, but in a carefully husbanded reputation that is somehow supposed to establish a relationship with customers that's worth more than the sum of what the company does.

In the '90s, the Nike swoosh became the summit of business theory, and top marketers like Coke's Sergio Zyman and the Gap's Mickey Drexler became international icons. Plain old marketing got spiffed up, turned into "brand consulting," and made intellectually reputable—a worthy pursuit for clever liberal-arts graduates with degrees in anthropology and sociology. The brand myth filtered through business-school classes and corporate retreats to every nook and cranny of business magazines and to books like Thomas L. Friedman's The Lexus and the Olive Tree and Thomas Hine's Populuxe. The work of "branding" became both intellectually engaging and economically important. Nokia might make a lot of phones, but it's the brand that's worth—according to a high-profile list of the world's best brands by a high-profile consultancy called Interbrand—$36 billion. Phone designers give us phones, but brand designers give us billions of dollars in intangible value. The beauty of the brand myth was that it made what this ever-expanding class of knowledge workers did sound spectacularly valuable.

The trouble was that it was, on some important levels, bunk. In periods of economic dislocation, brands that were supposed to be gilt-edged guarantees of success have never provided the kind of cushion that marketers imagine they will. What were the great brands of earlier days? Let's try Macy's and Bloomingdale's: names that once defined consumer culture and now mean next to nothing. Pan Am, a name that once stood at the very tippy-top of the brand pyramid, disappeared without a trace. And of course, Cadillac—a brand that was once the very definition of "You've arrived," as the salesman helpfully explains in Mad Men, now conveys nothing so much as "You've fallen behind the times."

The lesson of all these failed and failing brands is that the "value" of the brand is prone to disappear right at the point at which you might actually want to cash in on it. The implicit message of "brand value" was that investing in the brand was a way of building corporate value that was cheaper and more reliable than developing new products and technologies. When stock prices rose ever upward, businesspeople were told that it all made sense because their brands were assets worth billions of dollars. A stroll through the Interbrand lists—they're published every year with great fanfare by BusinessWeek—confirms the obvious: However valuable the brand is reputed to be at its height, if the market for the product the brand represents shrivels, the brand is worth zip.