The markets wave goodbye to GM. Now what?

When it comes to Ford, the situation is little different—perhaps worse. Ford is now talking about bringing European compacts and microcompacts across the Atlantic—a sign of panicked despair from a company whose fortunes were tied to the all-powerful F-150 truck. Ford's last best hope was a few more years of cheap oil. Now that's gone, too.

The plants will not suddenly shut down, but, caught between high oil prices and the shutdown of the credit spigot, the automakers have no more room to maneuver. The share prices alone tell you the future that the markets see for the automakers: Think of the airlines with their endless cycle of bankruptcy, and you can picture it for yourself.

The American economy can survive without Ford and GM, as can the U.S. position of economic leadership—heaven knows, there's not exactly a long line of other candidates for the job. It's already time to start thinking ahead to the political and economic consequences of the automakers' bankruptcy (and a bankruptcy it is likely to be—they will not get bailed out in the way that Iacocca's Chrysler did, as we've got too many banks to worry about, and in the midst of this credit crunch, there aren’t any private-equity suitors waiting in the wings).<

In the background of this year's election has been the question of how the United States will deal with its hollowed-out industrial core. It is not exactly the elephant in the room—the room is pretty crowded with elephants. But it's an underlying theme of an election that hangs largely on the will of voters in Pennsylvania, Michigan, Ohio, and Indiana. Courted by both parties at election time, it is the union voters in these states who, in cycle after cycle, have found themselves ignored once the vote is over. Their situation becomes increasingly untenable. The average pay of a man 45 to 54 years old with an hourly wage job is $2 an hour higher than the pay of a 25- to 34-year-old was 20 years ago. And it is the same man: In 20 years, he has had a raise of $2 an hour. And if his son has a similar job, he makes less than the father did two decades back.