Really, I though creative destruction would be something more like, letting GM fall apart, so that several new companies could buy the pieces, cheap, and creatively make new and innovative automobiles.
Yes. That's actually an important observation about the process; just because a billion-dollar-practice (called "GM") has keeled over dead doesn't mean that the economy automatically takes a billion-dollar hit. First, the billion dollar value clearly wasn't there in the first place (and acting as if it is is dangerous to the economy; the current economic crisis in a nutshell is "bad valuations"), and second, assets remain in existence that can be reused by more effective entities.
But people are hurt, jobs are lost (even if only temporarily and ideally with more recovered in the end), and there's still displacement that occurs. It's just that it's vital to understand that the alternative is far, far worse.
But people are hurt, jobs are lost (even if only temporarily and ideally with more recovered in the end), and there's still displacement that occurs. It's just that it's vital to understand that the alternative is far, far worse.