Well done, great summary.   One of the few pieces I have read which correctly diagnoses whats at play here.  Jerome has correctly predicted an analysed the financial and economic fall-out of the current crisis, but you begin to chronicle the possible political implications.

Change is the only inevitability in life, and the key political question is whether a particular political system can accommodate and enable it, or whether it seeks to block and destroy its momentum.  If the later there is the inevitable dam-burst of dreams when all manner of chaos descends and people lose hope in the midst of revolution.

However the European experience of this is decidedly mixed.  It can just as easily lead to Fascism and ever greater wars as the ruling and middle classes seek to destroy the momentum for revolution within by creating and engaging with enemies abroad who are scapegoated as the cause of the malaise.

So whilst you are correct that the potential and momentum for revolution is gathering, the much greater risk is that it will lead to an even greater upsurge of madness and militarism in response.  "Those whom the Gods wish to destroy they first make mad".

America managed to avoid a descent into such madness after the great depression, and the hope must be that it can also do so now.  However that depends on the American political system being a lot more resilient and amenable to change than many now seem to believe possible.

You don't just need Obama to win the election, you need him to deliver on the home he has engendered in so many, and that is a task of a different order of magnitude altogether.  You need a virtual revolution of the middle classes against the ruling classes (the top 0.1%) who have arrogated all growth in wealth to themselves over the past 30 years, and who have impoverished almost everyone else into unsustainable debt.

A default on those debts, combined with an inflation which dramatically devalues the accumulated wealth of the ruling class is part of such a radical re-alignment.  But unless the American Middle Classes stand firm against the temptations of dictatorship, the political consequences of that default and inflation will be far more terrible than anything you have yet contemplated.

Think Germany c. 1928.  I personally believe the US can do a whole lot better than that.  You have the experience of Europe to help guide you, and even we have learned from our mistakes.  The attitude of the next US President to Europe will tell a lot about how he/she proposes to address the USA's internal problems.

The lessons of social democracy have already been learned, and the alternative is probably not revolution, but Fascism.


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