The question, “Are we heading into a recession?” has been hanging like a dark cloud over Wall Street since the Dow Jones industrial average plunged 416 points Feb. 27, the stock market’s worst day since Sept. 11, 2001.

Economist David Leonhardt headlined his column in the Feb. 28 New York Times, “A Recession that Arrived on Cats’ Paws,” saying the plunge has its roots in a little-talked-of downturn centered in manufacturing. “Is the entire United States economy in danger of going the way of the manufacturing sector?” he asked.

Since the mid-1990s, fears of a recession were postponed by the “ bubble” and later by a “housing bubble” so wild that then-Federal Reserve Chairman Alan Greenspan called it “irrational exuberance.” Now both those bubbles have burst.

… Main Street feels it

Steelworkers felt the crisis in manufacturing decades ago. Autoworkers faced huge layoffs for decades and now General Motors, Ford and Chrysler have announced elimination of thousands more jobs. The same plague has decimated millions of jobs in appliance, electric and electronics, textile and garment industries.

Wall Street analysts rushed to media outlets to calm investors’ nerves, spinning the market plunge as a “correction” or an adjustment in the “volatile” China markets. But workers — employed or unemployed — whose jobs have been shipped off or permanently eliminated by labor-saving technology and who face soaring health care, rent or mortgage payments know that something is radically wrong with this economy.

This crisis is not just a cyclical downturn. It is a structural crisis that flows from giant corporations and banks that can move capital investments around the country and the globe in a nanosecond. Congress must enact curbs on this mobility of capital. Start by closing loopholes that give corporate runaways billions in extra profits by exempting their foreign earnings from taxes.

In many ways, this is a classic “crisis of overproduction.” Wages lag so far behind productivity that workers cannot buy what their labor power produces.

This crisis, too, was masked by runaway consumer debt that hit $2.1 trillion by the end of 2005, or $51,062 for every person over age 18. The bankruptcy rate has quadrupled since 1985. More than 1.6 million Americans filed for bankruptcy in the 12 months ending June 30, 2005, double the number of filings a decade earlier. And George W. Bush’s answer is a law that virtually closes the door to bankruptcy protection for working families, many ruined by ill-health, while keeping the door wide open for corporations and the rich to file for Chapter 11 protection.

A sharp increase in worker purchasing power is a priority in order to accelerate growth and economic prosperity for the masses of people. It will take “union power” to win those higher wages and benefits. It’s time to pass the Employee Free Choice Act to make it easier to organize and to raise the minimum wage — with no corporate strings attached.

An end to the Iraq war, and no war with Iran, will free countless billions now devoted to destruction. These funds can then be dedicated instead to health, education, housing and other needs of working families, and to providing union jobs in rebuilding our country’s broken infrastructure and developing renewable alternative energy industries. Special attention must be given those working families who face racist discrimination or severe poverty.

These are some of the government economic policies that we need to get this country on a sound economic footing.