What's good for Crocs is good for America?

It used to be that what was good for General Motors was good for America. That was about 50 years ago, and now GM is bankrupt. Fortunately, America does not stand still. In 2002, a new American business icon was born -- Crocs (CROX). But now Crocs, maker of flashy plastic clogs, is getting flushed.

During its heyday, Crocs was the ultimate American product. President George W. Bush, whose last "gift" to America was the current economic catastrophe, sported a pair of its brightly colored, Swiss-cheese-holed clogs, along with his pal, Aerosmith frontman Steven Tyler. But Crocs is now poised to go out of business unless George Clooney can help revive it.

In the last seven years, 100 million pairs of Crocs have flown off store shelves. And as an American business icon, they're fitting. After all, the material from which Crocs are fashioned was invented in a Canadian laboratory in 1999 and a couple of Boulder, CO businessmen molded the lightweight, antimicrobial foam -- dubbed Croslite -- into a boating and water-sports shoe.

In 2006, Crocs went public -- raising $200 million which it used to expand production to meet growing demand. But the shoes were so indestructible that people could only buy so many of them before they had their fill. When the far flimsier flip-flop became popular and the economy began its long downward tumble in 2007, Crocs found it had borrowed too much money to build the plants it thought it would need to meet growing demand, just as that demand got crushed in the downward escalator.

Last year Crocs lost $185 million and now its auditors doubt it can survive as a going concern since it's having trouble repaying its debts. As Crocs' auditor wrote in its 10K, "the maturity of the Company's Revolving Credit Facility on April 2, 2009 and losses from operations raise substantial doubt about its ability to continue as a going concern."

And for shareholders, Crocs has mirrored the economic bubble of the Bush era. Its stock rose 431 percent from its $13 IPO price until it peaked in October 2007 at $69 a share -- which coincided with the Dow's all-time high. Since then Crocs stock has lost 95 percent of its value as its market capitalization has plummeted by $5.5 billion to its current $266 million.

This February Crocs replaced the CEO who presided over the growth and collapse -- Ron Snyder -- with a brand turnaround expert -- John Duerden -- who thinks he can sell more Crocs to caterers, medical workers and people with foot problems. Duerden hopes former ER doctor, George Clooney, will wear a red pair.

Crocs, like most of the U.S. economy, is in the emergency room. And it will take more than George Clooney to revive it.

Peter Cohan is president ofPeter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in Crocs securities.

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