Potential for unrest increases as Americans suffer under a mountain of debt

We have written many times on this blog about the serious crisis in American economic and political life. It would be a mistake to underestimate the effect this crisis is having on people’s material well being as well as their consciousness, their feeling about the society in which they live and work. The Great Recession has not only driven the most desperate in US society further in to poverty, it has dashed the hopes and dreams of a much wider section of US society. People who thought they could retire are finding that they will be working until they reach seventy and beyond. Indebtedness permeates all aspects of US society---people simply cannot afford to retire.

The Wall Street Journal pointed out some months ago that the typical US family close to retirement with a 401K account has “less than one quarter of what it needs in that account to maintain its standard of living in retirement.” Because of the housing crash, millions of people are stuck making payments on mortgages that are far above the value of their homes, mortgages that we have said should be reduced to present market value. This has affected savings as older workers reduce or halt 401K contributions to pay off their debts and “Four out of five households with heads in their early 60’s and with mortgages had too little savings in 2008 to pay off debts without dipping in to retirement accounts” the WSJ reports.

The situation is dire and it is not only the US economy that is in trouble, the political system is also broken “Make no mistake,” says Republican pollster Bill McInturff, “this collapse of economic confidence is not an independent event driven by economic reality. This sharp drop in consumer confidence is a direct consequence of the lack of confidence in our political system and its leaders.” He is referring to the Michigan consumer confidence index that fell to its “fourth lowest level since 1952” and dropped almost 16 points between June and August this year during the height of the debt talks.

McInturff goes on to say that the US is “entering a new phase of the American political dialogue that has been irrevocably shifted in a way that will prove difficult to predict”. There is clearly concern among them as McInturff points out,“This type of deep voter anger, unease and economic pessimism leads to unstable and unpredictable political outcomes.”

This has naturally had a serious effect on worker’ political views. The hatred of the political establishment in Washington is greater than ever with 73% of the population saying the country is headed in the wrong direction and 82% disapproving of the way Congress is functioning according to a recent Wall Street Journal poll. Less than 50% approve of the job Obama is doing, after all, if you’re going to get Bush why not vote for Bush. According to the WSJ poll, although a considerable percentage found Obama “likeable and easy going” 40% said that his re-election would leave them “pessimistic and worried”. At this point in time, mind you, the alternative is a Mormon billionaire and a right wing Christian who makes the imbecile Bush seem smart.

Despite Obama’s reneging on all the major promises he made to the trade Union leaders, the Employee Free Choice Act, the “public option” in health care, the ending of the wars, the closing of Guantanamo and his continuation of the Bush era attacks on civil rights, they still cling desperately to the Democrat's coattails pushing yet again a candidate and political party on their members and the rest of the working class that they have long ago abandoned. The heads of organized Labor are in danger of losing their jobs if things continue as they are. Their demoralization and pessimistic world -view can be seen through their comments on the few occasions they have anything to say at all. “I think people are ready for that one thing, that one victory and that’s all it will take to get us back” says Don Crane, president of the Building and Construction Trades Council in Youngstown Ohio. “We’re hoping to have more faith. That’s the simplest way I can put it” says Jim Untch, the Business Manager for the Operative Plasters and Cement Masons Local 179 in the Mahoning Valley. These are certainly not words that inspire; they are the comments of defeated and demoralized bureaucrats locked in a time warp, hoping for a return of the old days of the post war boom when things were better and they could “produce the goods”--------for some.

We can allocate capital better than this

But those days are long gone never to return. The sad truth is that given the anger and hatred of the rich and their political establishment, not to mention the questioning of the system, of how society is run, the Union hierarchy stumbles along as if nothing has really changed hoping above hope that the bosses will please be a little fairer, a little nicer. If ever the time was ripe for the building of a mass movement and a mass working people’s party, a political alternative to the two Wall Street parties, it is now. Gerald Seib commented in the Wall Street Journal that “.. the country is in such a state of economic fear and loathing that the forces being unleashed are spinning off in every direction with unpredictable consequences.” Such is the level of concern from a prominent strategist of capital. He is right of course and the consequences are as we have seen when there is no organizational form through which this anger can travel. We saw it in London and we see it in Greece and we see it when the youth respond to the killing of their brothers and sisters by the police.

As we have written previously; there is going to some hell of an explosion in the US at some point and the important issue is; can we build a broad united front that can intervene in the movement as it develops?