The Providence Journal

It slowly dawns on Americans that their lives are changing. For more and more of us, "the American Dream," which we assumed as our birthright — founded on infinite plenty, a bottomless cup of creature comforts, and fair rewards for hard work — is fading.

The material components of the Dream were steady jobs, inexpensive mortgages and other credit, cheap gasoline, secure pensions, and flag-waving confidence in imperial America — an invulnerable power, which could do no wrong.

But the deadly albatross of Iraq, gasoline at over $3 a gallon, weak growth in jobs and pay, by companies that won’t share productivity gains with workers and do export their work to Asia, have produced the sharpest drop in consumer confidence since the recession of the early 1980s.

The Dream — powerful, pervasive, energizing, defining — has been the holy writ of the middle class. But today, ask the 20,000 union workers about the American Dream at bankrupt Delphi who face permanent layoffs, while thousands of others confront the prospect of pay cut in half. Or ask the thousands more union and salaried workers with jobs at risk at General Motors and Ford — once the world’s auto-and-truck leaders, now with 40 percent of their home market taken by Toyota and Honda. Or ask the retired guys who’ve been told by the company they served for decades that they’re being stripped of their "assured" pensions and health benefits.

Those young home owners lured by cash-free adjustable-rate mortgages to buy homes beyond their means confront rising interest rates, corrosive debt, and possible foreclosure. With the real-estate market sagging, their home equity shrinks.

Adding insult to injury, the redistribution of our dwindling wealth under Bush widens the gap between the "wealth aristocracy" and the rest of us.

The American consumer economy is operating on two tiers. On top are the relative handful of CEOs and investment people, immune from assault. The Republicans’ gratuitous tax cuts on investment income have significantly lowered the tax burden on the richest Americans _ earning more than $10 million _ by an average of about $500,000. Mr. Bush continues to press Congress to make permanent cuts for the privileged while the national deficit goes through the roof.

The rest of us are in a squeeze as inflation is driven by energy costs, medical care, and prescription drugs. Home-foreclosure rates are growing; they jumped an average 13 percent a month nationally at the end of 2005, with highs of 30 percent in Massachusetts, 61 percent in Texas, 70 percent in Arkansas, 145 percent in New Mexico, and 210 percent in West Virginia.

As for America’s standing in the world, the fog of the endless Iraq war has cost us friends that it took two world wars to win. Americans who felt pride in our triumphs see the leverage and reputation of this nation squandered.

We are reduced from a beacon of hope to a saber-rattling thug. The Bush foreign policy is nonexistent. The radical right exploits the formless "war on terror" _ which can’t be won _ to retain power by keeping us afraid.

Our ebbing strength inspires reckless challenges from rogue national leaders. In the power vacuum, Iran and Syria unleash their puppets in Lebanon. Kim Jong Il, of nuclear North Korea, blithely ignores Washington and launches his rockets. Iran’s Mahmoud Ahmedinejad cold-shoulders blustering Washington and continues to enrich uranium. He and Venezuela’s Hugo Chavez make threats against our petroleum supplies.

Competition by Asian industrial powers for shrinking oil reserves further threatens the assumed right of this NASCAR nation to cruise free and easy.

Then there is climate change, which Bush and the carbon-based energy giants want us to shrug off.

All this converges in a "perfect storm."

We high-consumption Americans, who haven’t been asked to sacrifice much of anything since World War II, are unused to belt-tightening and uncertainty. The ultimate question _ mostly unaddressed by politicians, pundits, sociologists, and psychologists _ is how will we behave when it dawns on us that the glory of the American Dream hath departed? Will we conduct a search for strong, visionary leaders within the democratic process who will refashion the Dream in line with reduced expectations?

When dreams fall apart, humans often respond with rage, hysteria, hopelessness and fear. How many more will find false comfort in the preachments of dangerous demagogues, who offer certitude by finding scapegoats? How many will seek solace in radical religious frenzy, pronouncing wrathful judgment on America while routing out "the godless"?

Will the great ideas that have animated America vanish with the retreat of the good life that came to define the American Dream? With what shall we replace them?

(Jerry Landay, a retired CBS News correspondent living in Bristol, R.I., writes on current issues.)