The middle class has always been systematically crushed under capitalism, which has been a primary project and function of the state. This pressure is felt by the middle class and forms the human basis for fascism.

This is why fascism is an intrinsic part of capitalist social relations. As long as there is a middle class to squeeze, there will be the structural basis to blame someone other than those responsible.

I'd be careful to say that the middle class is being turned into peasants. Its not completely wrong, but its a rhetorical statement (peasant bad, middle class good) rather than a materialist statement based on understanding social forces. I'm unconvinced that by destroying the material basis for the middle class, the capitalists are creating a whole new class, or reproducing older ones. If anything, destroying the middle only brings more attention to the central feature of capitalism that creates two diametrically opposed classes rather than many differing castes or classes, which stabilized previous modes of production. Capitalism creates capitalists and workers. Everything else is unstable or illusory.