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For the most part, while the economy isn't great - the middle class is beginning to struggle, beginning to find themselves moving paycheck to paycheck when they weren't before, people are beginning to lose jobs and so forth - for many people this recession is still somewhat hypothetical. Foreclosures are high and increasing, but for the vast majority of the middle class, foreclosures are someone else's problem ... so far. The talking heads and "reality shows" (what a name!) don't help much, and of course there's been a major effort on the part of the Republicans to make sure that people don't realize just how bad things are getting.
Most people are not terribly good at analysis. Gas prices are a prime example of that - many people go to the gas station and spend $60 to fill up a fairly small car (or a $100+ to fill up an SUV) and get angry with the clerk because the cost of gas is so high, or get angry with the filling station because they're obviously raking in obscene profits. Yet most gas station owners are just barely in business - they lose money on the gas and only make it up with service or food purchases - and the high cost of gas hurts them as much as it does the car owners. So its the oil refiners' fault - yet for the most part they are struggling with trying to keep antiquated distillation systems going in the face of too little money and increasingly severe weather. The owners of those gas refinery plants are struggling with high prices as well - for labor, for parts, and for oil, and are also nervous (perhaps justifiably) that oil production will also begin to drop precipitously, meaning that just as they gear up for new production their pipelines are essentially idled and they will end up eating into profits.
Eating into profits is bad, of course, because those profits first have to paying off dividends, and not paying off those dividends could result in stock prices dropping dramatically, and the largest shareholders would then scream and have the head of their hand-picked CEOs). Granted, the CEOs for the most part are getting WELL compensated for putting short-term profits over investment infrastructure, but even there, ultimately, it is the largest shareholders that are driving this. Most of those largest shareholders in turn are corporations themselves, banks, investment funds, municipalities, even foreign governments (and as often as not, the US government, not that they'd be obvious as such). These, in turn are made up of individual investors, quite possibly including the poor schlub that owns stock in the oil company and yet is complaining at the $5 a gallon gas he's putting into his SUV.
The banks are failing, it must be the corrupt bankers faults - well, yeah, partially. It must be the regulators faults (yeah, partially). It must be the mortgage brokers faults (partially true as well), it must be the assessors parts (again, partially true). Of course, someone had to buy the house in the first place, had to run up the credit card, had to get the second mortgage to pay for the vacation to Disneyland and the SUV to drive there. Someone had to vote in the government officials who appointed the regulators, had to pull the lever in the first place.
One of the reasons that I support Obama has been that he has recognized the crux of this paradox. People have to take responsibility for their actions. All of the people. When things are going well, its easy for standards to fall, for vigilance to become lax, for people to justify taking a little extra because, well, they deserve it, and if they don't look out for number one then who will. Sure we can (and should) blame Bush for this mess, and I think given previous history its possible that McCain will not be radically different than Bush (though I don't think he would be AS bad). But we should also be looking at ourselves.
Before the tsunami hit in Asia, the water receded out nearly a mile in some places. A few people saw this and said "Oh, s**t, head for the hills!". Many more thought that this receding tide was rather novel, and walked out into areas of coral that had never been above water before. It was only when the wave of water that appeared on the horizon got close enough for people to realize just what was coming for them that started to flee, and by then of course it was far too late.
The collapse of the banks the last couple of months is basically the tsunami appearing on the horizon. People have been amused or awed by the spectacle, but so far, the actual wave hasn't hit yet, and most people really don't understand the forces that are coming our way. My guesstimate is that when it does hit most people, we'll see the loss of 2000+ banks, perhaps 20,000 businesses forced out of business, several small and medium sized cities forced into discorporation, foreclosure rates closer to 5-7% rather than 0.5%, a collapse of the DOW to below 5,000 and trillions of dollars of personal wealth lost. It will see the end of the American automobile industry and the airline industry will collapse to perhaps two large carriers and maybe four smaller ones.
It will see the rise of squatter communities emerging in the shadows of all of those former bedroom communities that were too far away from urban centers to survive without inexpensive gas (and despite the recent fall in oil prices, gas is not going back to being cheap any time soon), and will see a massive rise in crime, poverty, starvation, depression, suicide and out of control crazies with guns. This won't happen at once, and it won't happen everywhere, but there are signs that its already beginning to happen now. What's even scarier is that when it does happen, it will make it easier for demagogues to take control, will see a significant rise in vigilantism and riots, coming from all sides of the political spectrum.
McCain doesn't see this, of course - he's seventy two years old, meaning that while he was born in the middle of the Depression, by the time that he really became aware of what was happening in the world, the world was well on the way to recovery. His world-view is shaped by decades of living a life of privilege, and while he was certainly tortured and mistreated during the Vietnam war, his life both before and after were very much at a financial plateau that few of us can even conceive of, and I honestly think he has no concept of how to even begin addressing the problems that he'd get ... assuming that he lived beyond his first year as president (which, both because of his cancer history and with Palin hovering nearby, I harbor a lot of doubts). Palin, in all likelihood, is a messianic Christian who likely privately believes that the end-times are near, and that the deprivation and hardships which are about to visit a large number of people are ultimately expressions of their sinful, apostate lives. Neither of them is prepared for dealing with the tsunami.
Is Obama? Not yet, but I have some faith that he will be. He will be forced into making a number of very hard decisions, some of which are likely not to be popular here at DU. I'd say there's even a 15% likelihood that he will be faced with a strong separatist movement or even a civil war if he manages to get past his first term, and it may turn out that his decision will end up being different from Abraham Lincoln's 140 years before him. There's a huge amount of rage in this country right now (especially between rural and urban America) and that rage is not going to dissipate in the face of a recession that will likely hit rural America far worse than it will hit the urban centers.
Sorry for being so down here, but I moved my family out of the US to Canada nearly four years ago precisely because I saw this coming, and while I have no doubt that there will be significant dislocations here as well, I think overall that Canada is culturally more capable of surviving what's coming. I still vote in the US, still pay taxes there, and yes, I have donated to Obama's campaign a couple of times now, but I also have a family that I'm worried about and wanted to make sure they were out of harms way - and I still have parents and siblings that are in the US that will keep me coming back to help however I can.
Obama has to win this. His winning is not going to solve all the problems magically - they're already baked in, so to speak - but I think of all of the candidates he's probably the only one who can manage to martial the talents of people who can both ameliorate the problems and move us into a new form of economy that will be possible to give our children a foundation for the future.
-- Kurt Cagle
-- Online Editor, O'Reilly Media
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