A couple of weeks ago, I made the argument — knowing perfectly well that it would never happen — that the best thing for the nation and for the US automotive industry would be to let GM and Chrysler fail and bailout their employees instead. Let creative destruction do its thing and allow a new automotive industry to rise from the ashes of the old.

For this morning’s reading, check out this piece by LA Times Auto Correspondent, Dan Niel, When Cars Were America’s Idols:

f you were to walk up to a typical New York executive in the 1960s — think Don Draper in AMC’s “Mad Men” — and tell him that General Motors Corp. would be in bankruptcy by 2009, he would have thought you were delusional, or perhaps a Communist. GM was more than just the world’s largest and most admired corporation; it was the final vindication of the American Way, the perfected and even divinely inspired example of democratic capitalism that stood opposed to the airless atheism and nullity of the Soviet system.

At the height of its power, GM represented 10% of the national economy. It controlled more than 50% of the light-vehicle market. Its products, research and management methodologies were the standard of the world.

The final chapter of that merger plays out this week as GM weathers a reorganization that will leave the federal government owning 70% of the company. In the midst of the deepest recession since the 1930s, it’s hard not to see GM’s bankruptcy as a signal moment in a larger history. If mighty GM can fail, cannot also the United States? And the answer is, absolutely.

This is the lesson of GM’s bankruptcy, and it has little to do with market share and miles per gallon. It’s a rebuff of the notion of exceptionalism. Any organization that fails to sufficiently safeguard its means of self-correction and reform, that forsakes long-term investment for short-term gain, that piles up debt year after year, will eventually fail, no matter how grand its history or noble its purpose. If you don’t feel the tingle of national mortality in all this, you’re not paying attention.

Read the whole thing.