How does Steinbeck use characterization to develop the theme that the American dream is not possible?

Most of the characters in Of Mice and Men have dreams. And yet all of those dreams unravel in the course of the story's events. In this way, they represent in microcosm the American Dream and what Steinbeck sees as its manifest illusions.
George and Lennie dream of having their own ranch, where Lennie will get to look after the rabbits. They yearn to escape an itinerant life of underpaid toil and rampant exploitation. But this dream dissolves in the light of the harsh realities of Depression-era America. Effectively, George and Lennie want to go from being exploited to being exploiters. On their dream ranch, they too would have to employ itinerant laborers, the Georges and Lennies of this world. Yet the dream evaporates as a direct consequence of their subordinate position on the ranch.
Curley's wife wants to make it big in the movies. Someone once told her she had acting ability, and with her voluptuous, smoldering beauty she certainly has the looks for Hollywood stardom. But again, Curly's wife can't escape, can't make the break necessary to realize her hopes and dreams. Though relatively privileged in relation to others on the ranch, as the lone woman in a man's world she cannot fully express her true self. The only acting that she's able to do is to play the role of sultry vamp, making herself the center of attention by her shameless flirting and full-on sexuality.
Crooks's dream is a lot more simple and straightforward, yet no less unattainable: he wants to be treated like an equal. Instead, as the only African American on the ranch, he has to live apart from the other men, eating and sleeping in a crummy old shack. He also has to do the dirtiest jobs on the ranch, the kind of jobs that no white man would be expected to do.
The irony of Crooks's life speaks volumes about the Great Depression and the status of the American Dream at that particular time. His dream, in theory, is so much more realistic than those of the others. Why shouldn't he be treated equally? But in 1930s America, his dream of decent treatment, of fairness and equality is much more of a hopeless fantasy than either George and Lennie's ranch or Curley's wife's movie career.