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Today, the Big Three Automakers did something to spur a move; to force a hand.  Like the banks, Wall Street and other high dollar industries, the automakers also want their free bailout.  They also want what the other high brow parts of the very small economic market obtained, free money.  Well, here’s where Detroit differs some from the banks and Wall Street.

Detroit hits blue collar workers hard.  The auto industry’s blatant poker hand play to the Federal Government is akin to pushing the “deflation” card back into the picture.  A few months ago it (the deflation card) was largely dismissed because most the speculators etc…were still speculating about the pie in the sky part of our economy (all those Wall Street tycoons, and Ponzi scheme types supposedly driving the American economy).

Guess what?  That bail out is already being seen roundly as a complete and huge failure for those types.  It was payoff for the big dogs.  It didn’t change their lending or borrowing behavior, which in this light is really the only measurable benchmark we can hold to these guys and what they do.

Now enter Detroit (et al), the auto industry.

Now it’s different.

Now it’s fundamentally different.

Now deflation rears it’s head.

Deflation is the fundamental lowering of prices below what is considered possible for business to sustain.  It hasn’t even been mentioned in earnest since 1982.  The argument (to be overly simplistic) is that you devalue the price of things (cars, oil, shoes, coats, houses…etc…) so much so, you actually cease to have it produced at a viable profit margin…and then at any margin. Therefore industry dies and the product is no longer available, causing more heartache and most certainly a precipitous fall from Recession to Depression, so goes the theory and those now wanting to feed on that fear.

Probable or even likely?  Experts disagree.  Big shock.

The reality with the state of our economy is the global nature of it and the fact now that OPEC and others are all of a sudden concerned about the American economy.  Whereas it was fine to get rich at our expense while inflationary measures were largely running the market, now as prices across multiple indices start to fall and production follows suit, even these “economic terrorist” countries are starting to freak out.  As they should.

Think about it from a socio-economic-political standpoint.  The US made very strong political changes via our rather, democratic process over the past 4 years.  In landslides from sea to sea, more Americans (by a bunch) said enough with the Republican/Bush regime.

What about those countries around the world still ruled by tyrants and dictators, many of which have huge economic weapons at their disposal.  What happens when those wells start to suck dry?  It likely won’t be voting for change.  It will be what these countries have experienced for hundreds of years when bringing about change.  Revolution will carry across borders and ethnic provinces at a pace hard to imagine as if it’s not already occurring.

Here’s the reality: This economy is a global one.  We are reliant upon friends and enemies alike thousands of miles apart.  We cannot start practicing, or for that matter even consider isolationist attitudes  and policies.  How Main Street comes out of this era may have more to do with World Street, than Wall Street.

For the world, an American Depression is devastating and it appears the world may just now be starting to realize and even feel the repercussions of a sputtering  heartland.  Hang on, we appear to be in for very rocky seas, but one thing is more and more apparent to me; We’re all in the same “proverbial” boat, and if we wanna find terra firma, we better navigate this thing well.