Sorry Detroit, You'll Have To eat It Like Everyone Else

Looks like the Senate will be where the American Auto Industry's bailout plans go to die.

While GM and Chrysler said they don't have enough money to get through the year. Ford evidently isn't in much better health. If the 3 firms fail, roughly 2% of American workers will be without a job.

Here's a newsflash, many large, medium, and small firms are on the brink of collapse, and yes, a profound quantity of unemployment is coming. Get used to it. We had a chance to get out of this mess, but nobody wanted to hear the truth.

This is why so many of us spoke with urgency about the insane monetary and fiscal policies of the government for the last decade.

This is why the ignored voices of REAL economists from places like the Ludwig von Mises Institute and others, who actually study human action instead of trying to apply Newtonian physics to the social world, implored that the Federal Reserve stop flooding the World with easy money that caused profound malinvestment.

This is why thousands of us a year ago took time out of our busy days and were standing out in the cold holding handmade signs--or our professionally designed signs--saying "Google Ron Paul," and "Stop the Federal Reserve!" while so many rolled their eyes and muttered dismissive comments.

Ron Paul was right. For anyone that was willing to look, the World was facing a cataclysmic harvest from the long sewn seeds of conceit strewn through a generation of 'destructive creation.'

Unlike the creative destruction of Schumpeter, where innovation destroys the very markets that sustained older firms based on increasingly outmoded business models, the current 'destructive creation' perpetuated by the easy-money policies of the Fed merely generates the illusion of wealth creation through money-pumping, which inevitably implodes with crushing and unstoppable efficiency.

The auto industry is still feeding on the illusion. Their sales for the last decade were spurred on by easy money. They profited from, and boated themselves on, the fact that easy-money makes expensive consumer goods like cars, houses, boats, and so on affordable to those that otherwise would not have been. (It's only been a couple months since the local auto dealer giant here--now going bankrupt--was running ads assuring potential customers that all they needed was a job and a pulse and they could drive off with a $15,000 truck.)

The auto industry still seems to think that consumer demand could 'return' to the heights of the loose era. This is silly. That era is over. Their era is over.