|Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
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In his acclaimed book American Theocracy, Kevin Phillips warned of the perilous interaction of debt, financial recklessness, and the spiking cost (and growing scarcity) of oil? warnings that are proving to be frighteningly accurate. Now, in his most significant and timely book yet, Phillips takes the full measure of this crisis. They are a part of what he calls ?bad money?? not just the depreciated dollar, but also the dangerous attitudes and the flawed products of wayward mega-finance. His devastating conclusion: In its hubris, the financial sector has hijacked the American economy and put our very global future at risk?and it may be too late to stop it.
- The decline of the US Empire
The author shows that the actual debt bubble can only be compared to the huge debt bubble of 1933, just before FDR devalued the US dollar with 40 %. In 1933 the total credit market debt as a share of US gross domestic product reached 287 %, whereas in 2006 this was a staggering 335 %. Just as in the `30s, the US are entering a new era of Great Depression, but this time, it is very likely it will mean the decline of the US Empire. This amazing thought is well supported with historical and current evidence by the author.
Now, it is important to understand that no "invisible hand" of the market was responsible for the debt bubble of 1933. This was actually planned and produced by the Fed. Read Griffin The Creature From Jekyll Island: A Second Look At the Federal Reserve for more details. The absurd credit market expansion that was created in the US in the last 20 years was likewise planned, by the Fed, under Greenspan's administration (1987-2006). The credit market exploded from $11 trillion (in 1987) to $44 trillion (in 2006). Greenspan didn't act on his own, of course. He is just a puppet, the visible head of a system we could call "Wall Street state capitalism". Obama, elected because he promised "change", not only supports this state policy fully, but even went so far as to actually classify 19 banks as TBTF ("to big to fail"). Citibank - Phillips calls it an "¨¹berbank" - has failed in 1982, in 1991 and in 2008. In a free market economy, they would already have disappeared 27 years ago ! In the US where free market capitalism has long ago disappeared, they will always be rescued, no matter how much they fool around and behave irresponsible.
Who do you think will pay for the 780.000 million dollars Obama miraculously produced "out of nothing" ? You will. All the taxpayers will. Everybody will, because this money expansion leads to a "hidden confiscation of wealth through inflation" (dixit Greenspan, in 1966, before he became corrupt).
In the meantime, the decline of the US has been evident when observing the "real economy". Manufacturing slipped from 25 % of GDP in 1980 to 12 % in 2005, whereas the financial sector rose from 11 % to 21 % in the same period. When the credit market imploded, this also meant that the US not only lost the biggest "export product" they still had, but it also meant that the position of the US dollar as the reserve currency of the world has severely been undermined. China decided from then on to build up their reserves in the form of gold. If you read Griffin, you will understand that this is a very wise decision.
The oil price is still expressed in dollars, but Venezuela and Iran insist to change this to the euro. This will probably become reality quite soon. Saudi Arabia was not amused by the invasion of Iraq either, and doesn't only export oil to China, but buys also weapons from them, as do a lot of oil exporting countries to China, like Iran, Oman, the United Arab Emirates, Kuwait, and Yemen.
China will definitively emerge as the next global Empire. They are exporting much less now, and are investing in infrastructure, raising the general standard of living of their own people at an amazing speed. They built 30,000 miles of expressway in the last 10 years. Compare this to the US interstate system which totals 47,000 miles. They also make the right technological choices at this moment. They will be producing the new technologies the world urgently needs : electric cars and solar panels. Compare this to the Obama policy of... not changing anything at all... He just set the "new" emission standards for vehicles that were already *surpassed* by Europe and Japan in the... 20th century... Corporate interests have totally corrupted the US government. Not only are creative solutions kept in the vault, if they show up, they are actively opposed. Look at the DVD Who Killed the Electric Car?. GM had developed the EV1 ten years ago, but instead of taking advantage of this major step forward, they decided - under pressure from the oil companies - to withdraw and destroy it. They preferred to launch the Hummer... Now, they are bankrupt. Phillips shows through a lot of historical examples that the standstill is typical for empires just before they collapse...
- Great Book for Americans Concerned About Their Financial Future
After reading all the reviews, there is not much I can say that has not already been expressed. If you are an investment professional, you may find some of the book useful and some of it may kill you. I think the book is geared more toward average Americans who are concerned with their personal finances and want to increase their awareness of what the banks have done and how it may potentially impact our future.
Getting past the negative review comments on how Phillips is disorganized and does not explain things in micro detail, for the laymen what he does very well is draw attention to the true nature of inflation and how it is savaging our personal wealth. He also draws attention to the frailty of our global financial system, the illusion of our money and wealth, and many of the risks we will likely face in future.
Yes, the global economy moves quickly and some of it is now dated. Yes, there are semblances of "conspiracy theories", but conspiracy is real and without going too far has a valid place when discussing finance. People may not agree with the author's politics, and may complain about his broad strokes, but regardless he offers many educational and valid points that people should become aware of, and on this level the book is a major success. I suggest people also read "The Creature from Jekyll Island" for a greater understanding of fractional reserve banking and the formation of the Federal Reserve....more info
- Peak Oil Is Here!
Kevin Phillips delivers yet again.
"Bad Money" is one of a handful of books that should be read to understand the times in which we are living.
Outside of the excellent financial parts of the book, the most shocking part to the average American is Ch.5 on Peak Oil....more info
- Devastating critique of the U.S.
Many readers already admire Kevin Phillips's previous books, with their incisive analysis of U.S. politics. In this treatise, published just before the 2008 presidential election, his main concerns are the dangerous dominance of the financial sector in the U.S. economy and the fiscal implications of peak oil. Phillips covers many other hazards, from securitization to the real estate bubble. He provides historical background to explain modern financial circumstances, whacks both the Bush and Clinton administrations, and offers his take on everything from imperial England to the efficient market hypothesis. After he explains how and why the U.S. is teetering dangerously on the brink of disaster, getAbstract is relieved to report that Phillips also offers some ideas about how it might rescue itself by going back to strong manufacturing, solid education and better regulations. This seems to be a fairly hasty overview of bad times, but the author can see beyond the immediate storm to the possibility of a brighter day. ...more info
- Scary about the post American world.
The author shows the scary side of the financial panic of 2008-09. America focused on selling financial products to the rest of the world, and those obligations were not as stellar as they should have been. With the current financial meltdown, much of the rest of the world along with the United States if facing the prospects of a global recession/depression as the trillions of dollars of these obligations are sorted out. Meanwhile Wall Street has made its millions and passed the debt to future generations.
The author also talks about peak oil, dynasic politics, and financial and marketplace corruption. When one looks at one's debt along with the government's obligations, one wonders whether the United States has ever gotten smarter following the Great Depression.
This is a scary book about the bad choices America made as a nation. Hopefully all Phillips has said does not come to pass. If it does, America will be in a bad position. A good read....more info
- Bad Money, Great Writing, Great Information
If you love words and sentence construction then you will really appreciate Mr. Phillips' writing style. It's a pleasure to read popular nonfiction written above the ususal boring high school level. Yes, his style takes active reading at first, but then your brain becomes used to it and savors each passage as a refreshingly delightful and active experience.
I am SO glad to have read this book. I feel much better prepared for the future. ...more info
- Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
The book is excellent, the research appears unbiased and objective, and the delivery of the information is direct without being dogmatic. The mainstream media should be so honest about the mess we're in!...more info
- Phillips Loses Sight of an Essential American Trait
I have spent four decades reading Kevin Phillips' books. In other forums, I have identified him as one of my favorite authors and analysts.
In my mind he has authored at least brilliant books: The emerging Republican majority, The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath and Wealth and Democracy: A Political History of the American Rich. It is difficult for me to say, this book does not measure up to his early high analytic standards
He is not known as a flamethrower. In the past he offered clarity where there was confusion. These books provided my first exposure to emerging national trends. He was trained as a lawyer. His research is meticulous; his arguments convincing.
But he is wrong.
His argument ignores an essential trait of the American people: we are practical; we pride ourselves in being problem-solvers. Each day at work, we are asked to place a size 13 foot into a size 10 shoe. Not only are we good at the "impossible," we love the challenge.
In his latest book, Phillips argues what he terms "megafinance"-- the perilous interaction of debt and financial recklessness coupled with cost of oil dooms us to a crisis. Readers familiar with his work, already recognize he has lost one evil leg of his previous argument in American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21stCentury - the danger of what he termed "Patriot Pastors." Those of us who are not quite so alliterative know them as right-wing evangelicals. The American voter dispatched them during the last mid-term elections.
I am not positing everything is rosy. It is not. As a country we face serious problems. What I am saying, however, is that anytime during the past 40 years Phillips has been analyzing the American scene he could have seized on any number of problems at the time those books were published and come to the same this book's conclusion.
But it did not happen.
The American people rose to the occasion and conquered the problems they faced. I have no doubt they do the same this time.
Phillips, as he always does, delivers a skillful and thought-provoking argument against dynastic leadership. The book is worth reading. According to Phillips, Americans will knuckle under. I believe they will rise to the occasion.
Reading this book requires some background knowledge in economics and finances, but it's great. It's packed with statistics (hence the subject matter) and it has a kind of academic vibe, so it's not for everybody. But it's very insightful and a great critique of what American capitalism has become. A supplemental read for those interested in solutions to our environmental and economic woes, should read "Natural Capitalism: Creating The Next Industrial Revolution."...more info
- Irritating CD
Bad Money on CD is read by Scott Brick. He has a somewhat intense and annoying delivery which soon becomes intolerable since he uses the same level of emphasis in every sentence - even those which merely reference material in later chapters. It makes him sound like he lacks any comprehension of the material he's reciting. I kept thinking he must be under time pressure because he's just reading this, not trying to convey what it means. I couldn't make it past the second CD in the set but I'll get the book because it sounds worth reading.
I just finished The Revolution by Ron Paul on CD read by Bob Craig. It was wonderful! Craig has a great voice and I was convinced he empathized with the material he was reading. I would be tempted to get anything read by Bob Craig....more info
- Bad Money, Bad Writing
Phillips' book contains much information on our 21st Century economy that is not easily available elsewhere. There are some startling statements on the connection between Wall Street and the Democratic Party that I have found nowhere else. I think it is an important work that commands the attention of the American public.
The book is short in pages but long in comprehension. It is a pity that the work is so badly written, as are the other books of his that I have attempted to read. Where are the editors when you need them? Is there a "Maxwell Perkins" for this modern-day "Thomas Wolfe"? Since his editors have abandoned their posts, to Mr. Phillips I offer some advice: one thought, one sentence. Also, use standard English constructions and stay away from (what I assume is) Wall Street jargon and linguistic peculiarities. And best wishes for an easier read on your next book.
- An Overlong and Not Very Insightful Look at Excess Debt, Peak Oil, Bad Loans, Bubbles, and Reduced Credibility
The short message from this book is that the U.S. economy is in trouble and that trouble is about to get worse. Why? Private and government debt and spending are out of control and the chickens haven't come home to roost yet in terms of higher interest rates and higher costs of imports, the government lies about inflation, the credit crisis isn't over by a long shot, peak oil production will cause prices to shoot through the roof, our manufacturing base is gutted, economic growth is going to be lousy, foreigners aren't going to keep taking dollars, and nobody likes us outside of the country. Are you ready to become a second-rate country?
Unless you want to see some of the excellent tables and charts in the book that document these points, you don't need to read the book. Mr. Phillips doesn't add much to that brief message except to make continual references to prior histories of other nations. You would do better to spend your time working on solutions to the problems.
The book is also very dated, focusing on the conditions of August 2007 and the levels of oil prices and debt problems then. As we all know, those were the good old days compared to June 2008.
The writing style is also annoying in that Mr. Phillips doesn't assemble his points into a logical pattern to "prove" what might come next. It's an overly qualitative and anecdotal approach to issues that have quantitative implications.
There's not a bit of advice in the book about what you can do to help secure your future: This book seems to be totally aimed at setting the agenda for the next president of the United States. ...more info
- Meaningless jumble of quotes, numbers, and associations
I may change this review, becuase I am only about 2/3 of the way through the book. I got this book because this is the subject of America. This financial takeover of the country is killing America, or at least the American people, and the hidden part of it is killing democracy. I can see that and I wanted to find out more about this problem, who is behind it and who might have ideas on how to stop it and turn it back.
What I get from page 1 is a lot of out of context quotes seemingly with nefarious intent. Numbers and statements with no broader background. History out of sequence.
Unless Kevin Phillips pulls all of this together in the last few chapters of the book this book will be pretty much useless in terms of any criteria you look at it with, except maybe the far left who just wants to find thing that look bad and say "see, I knew things were screwed up".
Well, I think 85% of the country knows there is something wrong, and I think Kevin Phillips has the problem narrowed down to the financial takeover of almost, no all, aspect of the country. The financial expansion that has gotten rid of America's industrial base, and forsaken its people unless they can afford to invest abroad, and even then, most of them.
The problem is that this book does not tell you who the players are, what they have done. All it does it wind the reader up with lots of hot air and leave them with nothing to do.
The writing style of this book seems to be like he might have taken a historic document and put it in a shredder and then put it back together in the present form. There is no linearity or logical sequence or flow to this information. It is almost 100% out of context out of time quoations and statistics.
If anyone knows of a better book on this subject that is not some conspiracy theory, please let me know. So far I am disappointed in this one.
- Unmasking of the Greenspan
This is a scholarly, intellectually courageous and very timely expose of the rise and fall of America's twenty-five year experiment with unfettered laizze faire capitalism, and it's destruction of the U.S. economy, the U.S. dollar, and the U.S. standard of living.
He shows how Greenspan, the Bushs, and the Clintons, essentially turned America into a nation of debters.
For example, Phillips shows how Greenspan and company quietly and unilaterally lowered social security benefits by replacing the original Consumers Price Index or CPI which measures inflation with a completely bogus index that understates the tue inflation rate by half or more. This not only reduced the COLAs to which retirees are entitled to by law, but also reduced the pay checks of tens of millions of working people, while making it appear that the Fed was sucessfully controlling inflation while inflation was in fact completely out of control. Wait till the social security and AARP learn how they have been cheated out of their full and rightful benefits.
Phillips discusses in depth and in detail the creation of the housing bubble in which the Fed and banks actually orchestrated the defrauding of millions of Americans who now own houses that are worth less each month than they owe on them. He presents a range of possibible outcomes, non of them good, and all of them already overtaken by actual events, i.e. the continued collapse of house prices with no end in sight. (See [...] for daily updates of the housing bust.)
He documents how the Fed under Greenspan repeatedly rescued the rich and powerful, using the tax money of the middle-class, which enabled the rich to become even more rich while impoverishing the middle class.
Phillips discusses the trillion dollar student loan industry, unique to the U.S. No other country requires its students to mortgage their futures to get advanced education and in fact neither did we until very recently. I would have appreciated a more in depth and detailed discussion of the student loan racket, such as provided by Marty Nemko, the author of COOL CAREERS FOR DUMMIES who says the problem with the student loan program is that the colleges and their lobbyists manipulate legislators into increasing govt-funded financial aid, which merely allows the colleges to raise their prices more i.e.the taxpayers are lining the colleges' pockets while providing the student borrowers with a TERRIBLE education.
Nevertheless, this is a must read book.
- One sided Accountant
I gave up reading this book after 90 pages. The author dwells on the escalation of various forms of U.S debt over the past 25 to 30 years. This is very sobering, but it's kind of like the financial analyst who looks at a company's balance sheet and ignores the asset side of the sheet to obsess about its various liabilities. Most of the obsession is in the form of analogies and conspiracy theory which do not come together necessarily to prove economic disaster awaits us all....more info
- Why isn't this guy President?
Good book. I was surprised at how right on he is. We are even studying this book as a companion to our Bible Study (who would have thought). ...more info
- This Only LOOKS Like A Book About the Economy
One would expect that a book subtitled "Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism" would answer two basic questions: (1) What is wrong with the economy, and (2) How did it get that way? As a bonus, we might also like to know just who is responsible for the incipient Great Depression II, so that we can begin erecting gallows and fashioning enough nooses, and we might like to entertain suggestions as to how the crisis might be solved, but it turns out that Dr. Phillips knows no more about economics than do you or I or your local greengrocer. As a result, the book meanders in a desultory manner around various topics that are at best only tangentially related to our financial woes, and most are irrelevant.
In place of specifics about the economy, Kevin Phillips rambles about under the pretense of giving us the "Big Picture" or a "Historical Perspective," and thus we are treated to an entire chapter (chapter 6) on not merely what happened during the first Great Depression, but a complete overview of European history, as well. "In 1618, the fall of a weak Spanish first minister led to a burst of activism, and several years later . . ." And blah, blah, blah, followed by an analysis of the situation in Holland in the seventeenth and eighteenth centuries. It's all absolutely fascinating (NOT!), but the trouble with this is that, if one digs hard enough, one can discover any lesson from history that one's looking for, and when does Phillips get to the economic situation of 2008? He doesn't. If the fact that in the fifth century the capitals of both Rome and Spain were moved to different cities (pg.157) is pertinent to our present situation, then what, if anything, can be considered irrelevant? Rin Tin Tin? Cameron Diaz? Jujubees?
Throughout "Bad Money" Kevin Phillips refers again and again to his previous books (he wants you to buy them), and since he has little information to share with us about the present economic crisis, he begins writing those old books all over again. We get many pages of his American Dynasty, including the scintillating revelation that "John Quincy Adams was elected president in 1824, . . . twenty-four years after his father, John Adams . . ." and that "Benjamin Harrison was elected president in 1888, forty-eight years after his grandfather, William Henry Harrison . . ." (This in a book about the economy.) Phillips has a Mencken-like animosity toward the Christian Right that he vented in his American Theocracy, so he here he spends a chapter placing the blame of our financial situation at the feet of the devout.
Because it's easier to write about than specifics of the financial system, an entire chapter is devoted to the debate on whether the world has reached Peak Oil production or not, but now (November, 2008) that the price of oil has fallen below $50-per-barrel, all that has been rendered moot for the time being.
I would fain admit that on random occasions, the stream-of-consciousness Philips writes in stumbles briefly into economic matters, but much of this is material that you have already read in the same papers and magazines that Kevin Phillips reads. There are many graphs and charts from The Financial Times and many quotes from that British journal. Unfortunately, Phillips adds little to the quotes, and he doesn't clarify the more abstruse terms. This book desperately needs a glossary, and before you read it (not that I'd recommend that you do) you should first become familiar with such terms as brouses, derivatives, credit default swaps, mercantilism, deleveraging, fixed-leg features and two-step binomial trees. (If you don't know what those are, don't feel bad, neither does Kevin Phillips.)
There is some new and startling information in "Bad Money," but much of it is of a dubious nature and is merely mentioned in passing. Our nation's conservative masses have followed the lead of their mob masters (turn-on any radio) and are blaming "minorities" (you know who) for the financial crisis, because these high-melanin types purchased homes they couldn't afford. But what about the "Ninja loans" that Phillips mentions? These were loans eagerly given to people with no job, no income, no assets. Are the brown people to blame for those, too? Unfortunately, Phillips cites such loans only in passing. Which lenders made them? How many such loans were made? Sorry, no further information is available. Likewise, Phillips mentions bonds that were backed by delinquent credit-card accounts. Phillips informs us that these bonds were given a rating of AAA, but that's all he knows.
Phillips provides a stunning revelation when he quotes several sources about a shadowy Plunge Protection Team within the Federal Reserve that may (or may not) have been manipulating the market by secretly buying and selling stocks and futures. On the other hand (pg.60), "There's never been any official confirmation of this." That's quite a serious charge --the Federal Reserve, a government within the government, buying and selling stocks to influence the market-- and I for one would like to learn more about it. Is it happening or not?
Alas, Phillips admits, "I have no personal firsthand knowledge and am not interested in becoming a conspiracy investigator." In other words, he doesn't know. It seems that there is much that Kevin Phillips doesn't know about the economy. Read this book and you, too, will know just as little....more info
- Bad Money is a good read!
This is a must read for any elected pol who thinks they know whats going on....more info
- bad money
This book should be read before The Predator State is read. It is a less detailed, somewhat bias claim the understand the current situation in our economy but it lacks the meat that Galbraith covers in the Predator State.
I do believe that is is worth reading so that some understanding of what we are doing by borrowing so much at this time has caused. We seem to need a good recession to get back our ethics and begin real growth sometime soon. We are in very bad shape and now that the problem has become so large, we cannot just keep feeding the greedy. We need taxes and punishment for the white collar stupid managers that got us here. If only we had the ethics that were in place before the Yuppies and Yippies told us they wanted change but forgot what they were doing due to drugs, we might have been better off today. They failed and they failed by huge amounts....more info
- Too bad he is an ideologue
If you are a Bush hater you will like this one. Too many statistics though. The author does have some interesting ideas about the current economic crisis and I look forward to learning more and deciding which I think are true....more info
- Interesting but lack of attention to the Kindle version
I'd give this 3 1/2 stars as I found the content fairly well presented but felt some of the issues were too rushed and could be more deeply examined analytically. It felt like the publisher's deadline was the more important criterion. Also, I appreciate that this was not a political partisan or ideological diatribe. Phillips is pretty fair in assigning failures to the people in control.
The loss of a star was due to the Kindle edition not linking footnotes or the index to their references in the text. What use is an index with no links or location numbers? Thus, as a non-fiction work for future reference it fails poorly. How about a revised Kindle edition that previous buyers can upgrade to?...more info
- Best Book Around on the Financial Crisis
There is simply nothing better for understanding the mess we are in and what we will have to address if we really hope to dig our way out of this very deep hole. Required reading for all Americans. It is surprisingly readable for the information and deeper understanding Phillips is giving us. Puts things together so well you end up feeling like every other source of information or commentary sees only part of the elephant. Pair this with "The World is Flat" by Tom Friedman and you've got the ideal gift for each of your children, teenage or above, to prepare them for what's ahead....more info
- bad book
This book could have been a nice 10 page pamphlet. The other 190+ pages are just a repeat of the same arguments, sometimes using the same words. And, after hearing the author on Bill Moyers PBS program I expected more and perhaps even a prescription for how to get out of our 2008 financial meltdown. Unless you are a pessimist and see the end of American capitalism this book is not for you. ...more info
- Bad Money - Required reading
Kevin Phillips once again gives clarity to a complex issue. This book should be required reading by anybody involved in financial decisions in the public and private sectors....more info
- The other shoe
This book details the possibly fatal indebtedness of the US to lenders throughout the rest of the world. The only major omission is a discussion of the instruments that may be the final nail in our coffin, Credit Default Swaps....more info