Regarding all this Chrysler bankruptcy stuff – I think the industry is outmoded. And as much as I like companies like Honda, I think the private motor car industry itself will fail as we know it in the next couple decades.
But I was questioned as to characterizing the current recession as being on the order of magnitude of a “reset.” Of course it will not reset to zero. And I think that we will “even out” this year. But afterward, the growth pattern will be flatter.
The last bubble that deflated was actually a 20+ year super-bubble, and things like the real estate bubble and tech bubble were actually sub-bubbles on its surface.
I do not think that we’ll be able to achieve the levels of sustained growth that we and our production mechanisms have become accustomed to over the course of the last generation (the “Privatization Generation”) and that the new landscape will be one of rapid inflation and deflation of individual world markets based on fleeting and transient fortunes.
So – on a worldwide scale it will look like a slightly rising line, because there will be growth, but economics will reset to being more of a zero sum game where fortunes are made and lost rapidly. In effect, economics will become what it always has been – gambling.
Every successful business will look more or less like a startup or a boiler room, making the money while it’s there to be made, withering after they’ve taken it. Knowing when to walk away, knowing when to run.
The fact is that private automotive technology and the “prosperity” that has brought was a prime concern based only on the overlapping interests of a few despotic cabals (oil companies, oil producing nations, steel companies, car companies, finance companies, “workers’ ” unions, pork barrel senators, suburb developers) and as each of these is in turn failing or being brought back to reality, the paradigm will shift.
The kings of the wild are not the 4000 pound elephants, too big to fail; but the flocks of 100 forty pound birds of prey. The many, small, fast, and deadly, not the massive and imposing. There’s a reason the military is ordering more Predator drones, not B-1 bombers. The true thing that made us powerful as a nation is that Yankee Ingenuity that says to go with what works, whatever that may be.
There won’t be any more GMs who set a standard for a single product. There will be very small transitory companies and GEs, P&Gs, and Sonys – companies so diversified that their individual branches can grow and shrink as necessary. Companies who are not a product, but a management mindset that allows the strong to survive and does not waste sentimentality on the failed ideas that it cut loose.
I think that the private automobile is going the way of the B-1, of the steam engine, and of the brontosaurus. It is built on an ecology of plentiful resources, and the asteroid that will end all that is hitting as we speak.