This column today offers a useful perspective to the standard anxiety about the auto industry — which is that for all the serious problems plaguing Chrysler, Ford, and General Motors, there is also a worldwide economic crisis underway, which has snuffed out consumer demand. No automaker is doing well, not even the estimable Toyota.

I would add that this dimension of the problem ought to shape our understanding of the domestic industry's dilemma. In the end, this may not matter: after all, the capacity excess, the labor cost disparity, the customer loyalty, and all the other details that have separated Chrysler/Ford/GM from Toyota (and Honda, Mercedes, and BMW) over the past decade or so, remain. But, as the columnist writes:

The auto industry is in a classic shakeout. Even if whole companies don't disappear because of government bailouts, the weakest companies will be forced to make major cutbacks, a process that's already under way in Detroit and elsewhere. Estimates of excess global production capacity in the car business run as high as 20 million vehicles annually, which would equal the capacity of 80 assembly plants. Not that many will close, of course, but a good number will.

The domestic automakers need to be reorganized to be competitive in the future, not simply to address past mistakes. If you want to continue this line of argument, to say that government involvement in the reorganization process (environmental regulations, domestic content rules, work rules) will not help make the domestic companies more competitive … well, I won't argue otherwise.