In August, the crisis took a dramatic turn for the worse. The rise in mortgage loan defaults and foreclosures spread like wild fire beyond the "subprime" to the prime mortgage market and from there into the broader US and world economy. This has led to a full blown financial panic as banks and other lenders frantically attempt to unload loans losing value onto the market before they become worthless. To stop the bleeding and "restore confidence," the US Federal Reserve and other central banks throughout the world were forced to pump hundreds of billions of dollars into a US and world financial system teetering on the brink of collapse.
For millions of home owners, especially those in the bottom 40 percent of the income ladder, the situation is potentially catastrophic. The developing "credit crunch" and rapid slide in property values means that many will not be able to meet escalating mortgage payments or be able to buy time by borrowing against equity in their home. Saddled with a high interest debt burden (mortgage, refinance, credit card, student loans, etc.) consuming 50, 80, even 110 percent of their wages, and denied relief by the bankruptcy laws, increasing numbers of workers are doomed to a life of debt servitude as they struggle to hold on to their homes. Hundreds of thousands will descend into the ranks of the homeless as victims of foreclosure.
Numerous causes have been advanced to account for the housing crisis, ranging from uninformed home buyers being victimized by unscrupulous brokers, to the low interest rate policies of the US Federal Reserve making it easy for people to buy housing at inflated prices.
None of these explanations expose the root cause of the problem. The housing crisis is a symptom of the deepening crisis of the capitalist economic system. This crisis, caused by the introduction of electronic technology into the economy, is destroying the very foundation of capitalism as workers who use their wages to buy houses and other necessities of life are displaced by robots that don't eat and do not require shelter.
The growth of production based on electronics is hollowing out society's middle as millions lose their jobs, or are forced into low-paying part-time work incapable of sustaining life. The result is the increasing polarization of society: at one end a rapidly expanding majority is mired in permanent poverty, while at the other extreme an ever smaller minority wallows in an historic accumulation of wealth.
The growing polarization engendered by the crisis is awakening a sleeping giant. A random scan of internet blogs and talk radio across the political spectrum reveals that the housing crisis is spawning a scathing critique of the system. Many are blaming the "system" for its failure to provide them with protection and relief.
This emergent "I'm mad as hell and I'm not going to take it anymore" consciousness must be elevated to the understanding that a system on the path of self destruction cannot be fixed or reformed - it must be replaced. The future of humankind and the planet depends on the working class grasping this truth and acting upon it.
