As I said to Dodo, though, I don't think this particular financial crisis, the US sub-prime meltdown and attendant standard-fare neo-liberal ills (inherent conflicts of economic elite interest, utter lack of due diligence and lack of interest in ecnomic outcomes of the lesser of our brothers and sisters because "the market takes care of itself" and so forth), is going to be the catalyst. It's a symptom, the disease goes far deeper, and if and when the shit hits the fans, the middle class will really be howling, as they always do when they realize all of their paper net worth is gone. Ask any Argentine, or my understanding of '20's Germany or Hungary was that it wasn't easy to deal with the kind of fall-out long-term monetary mismanagement tends to create, either.
This being said, and while my bias in any primarily capitalist, neo-liberal economic regime is towards greater credit (if but for the simple reason that in such regimes, folks tend to be out on the street and jobless when credit gets tight), the real root of the problem is, for want of a more contemporary, less wooden catch-phrase, a systemic false consciousness which undergirds the whole values system which props up an economic regime which is, quite frankly (and de anander above has this exactly right) predatory. People think they have net worth because they notionally own a home, but the reality is quite other. Similarly, people think their retirement savings are worth something, but all it takes is a bout of some serious inflation, and they can probably kiss most of those goodbye. And so, much of what gives the vast middle classes comfort and allows them to vote overwhelmingly for neo-liberal politics (and this is as true in the UK as it is the US, I'm afraid) is a casual belief in their value within the system. Folks are vaguely aware that they are one major illness in the family away from being bankrupt, many people even know others who have endured this. But they persist in the belief that it's simply something which happens to someone else, and that the deceased family member, the cost of whose misfortune (adding insult to injury) has been loaded on the backs of the soon-to-be-bankrupt, has gone on to a better place, most likely by a very very busy Jesus' side. Religiosity, I am convinced, particularly of the (imho toxic) Calvinist stripe, explains much of why the US is the way it is (and I could tell you some stories if you like from personal experience).
In the present economic environment, this belief can only be perpetuated by ever greater extension of credit, extended credit being a stand-in for sovereign grace, or at least a sign thereof. I suspect we are beginning to see the end of this today, but it's hard to tell. Of course, falling from the grace of god...er...losing access to credit can only be the debtor's fault, so in and of itself, this won't change things; perhaps losing the roof over one's head might, but as noted in the thread, 3.5 million Americans will do so in any given year and this doesn't move the needle.
The reality, of course, is that very few really own much of anything at all, there's only an illusion of this. As for sovereign grace, that's a load of calvinist christian bullshit, but it's potent motivating stuff over here in America, and many people will continue to simply chalk up their misfortunate to God's will and beat themselves up for it, while others will get really nasty and chase down the Mexicans (we're starting to see this already) in addition to the already vilified Ay-rabs.
Of course, far better it would be to ensure housing for all, good quality, secure public housing for all who need it. To ensure egalitarian access to quality health care. To figure out how to get to gender equality by providing safe, free-to-affordable childcare. To guarantee a job and a pension for young and old. Do all of these things and you can actually do without the credit whose tightening we are now worrying about.
But this ain't gonna happen anytime soon in the US, just like it's gonna taked a lot of evolutionary experience to get pigs to grow the wings they'll need in order to fly. The Democratic party tried a couple decades to grow wings, but instead ended up growing an elephant's trunk, so there's really not much hope in the immediate future for better outcomes.
The important thing to note is that for those who live in poverty already in the US, and who have done so for the past few decades, it's unlikely that things will get any worse than they already are. That's really my central point. Those who will suffer will be the middle classes, and given their behavior over the past few decades, it's hard to argue that they don't deserve it. After all, it's what they've been asking for since at least 1972. Fai de bèn a Bertrand, te lou rendra en cagant
However, I think in the UK we've always had an understanding of this. There is a persistent resentment at the poor provision of pensions from central government, simply because we've seen too many examples of pensions going to the wall.
People think they have net worth because they notionally own a home, but the reality is quite other. Similarly, people think their retirement savings are worth something, but all it takes is a bout of some serious inflation, and they can probably kiss most of those goodbye. And so, much of what gives the vast middle classes comfort and allows them to vote overwhelmingly for neo-liberal politics (and this is as true in the UK as it is the US, I'm afraid) is a casual belief in their value within the system.
