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| Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism | 
 enlarge | Author: Kevin Phillips
Publisher: Viking Adult
Category: Book
List Price: $25.95
Buy New: $10.98
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Avg. Customer Rating:  51 reviews
Sales Rank: 112
Media: Hardcover
Number Of Items: 1
Pages: 256
Shipping Weight (lbs): 1.1
Dimensions (in): 9.1 x 6.2 x 0.1
ISBN: 0670019070
Dewey Decimal Number: 330.973
EAN: 9780670019076
ASIN: 0670019070
Publication Date: April 15, 2008
Availability: Usually ships in 1-2 business days
Condition: SATISFACTION GUARANTEED! NEW Book! May have remainder mark. Most orders ship within 1 BUSINESS DAY with ORDER CONFIRMATION.
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| Customer Reviews:
 Bad Money April 29, 2008
33 out of 68 found this review helpful
I have bought my share of books from Amazon over the years, and yet have never written a review before. Most of the books i bought were excellent, yet some weren't. However, even for these duffers, I never felt compelled to write a review. So what made me write my first review for this book?
Two words: OBFUSCATION and FRUSTRATION.
"Bad Money" isn't bad, it may even be great, if reading it weren't so darn difficult. I found Mr. Phillips writing style burdensome. I was left with the distinct impression that Mr. Phillips was more interested in showing others how intelligent he was, instead of making sure he communicated his ideas clearly.
Maybe others will not have the same opinion as I did, and I do not want to persuade others from buying the book. I just wished he wrote a little more like Ernest Hemingway, and less like William F. Buckley, Jr.
 Help wanted August 23, 2008
26 out of 45 found this review helpful
Does the mortgage credit crisis bother you? Are you concerned about high oil prices? Do you get the feeling that Wall Street is largely a high-stakes casino, where insiders collect billions on winning bets, and also collect billions on losing bets, payed off with taxpayer bailouts? Do you want to understand why this is happening and how the game works? Then go find a different book. The author of this book is a "big idea guy", and he does nothing to elucidate his major points, all of which I was painfully aware before reading page one.
The writing is in a churning stream of consciousness style, looping back over the same topics several times, in no particular sequence, as if hoping that some meaningful connections would appear just from the proximity of the paragraphs. Most annoying, is the habit of introducing an interesting topic, promising, "more on this in a later chapter", then repeating the introductory comments without pushing further when the later chapter arrives.
There is no way to deny that the problems outlined in the book are important and deserve attention. Most of the positive reviews here award 4 or 5 stars based on that alone. But not only are no solutions offered, the problems themselves are not broken down and explained in any meaningful way. The comparisons of recent American history to the declines of previous empires is interesting, but superficial. If the thesis is that an over-emphasis on financial services leads to decline, I want to know why. I believe it could be true, but I don't understand why. No help here.
I do know that when the government takes the downside out of risky behavior, by promising taxpayer bailouts for failed lenders, that it's a recipe for disastrously risky behavior. That's obvious. Why is it allowed to happen? Who can stop it? Somebody please give me the name of a book that can help.
 4.5 stars-America as a speculator economy. April 29, 2008
24 out of 25 found this review helpful
Phillip's book is similar to several other books currently available that show how the deregulation,especially of the banking and financial services sector, and privatization polices,started by Carter in 1978 and continued by all American Presidents since then ,has converted the United States of America into a speculator type economy where financial sector firms seek to extract a profit by the manipulation of balance and income statements .The goal is to make a return without any actual production of goods or services.
There are two minor shortcomings in the book.First,Keynes's chapter 12 in the General Theory(1936)explained exactly how the USA had been converted into a speculator economy during the 1920's.There is no mention of Keynes's contribution anywhere in the book.Second,Adam Smith was perhaps THE major proponent in history of a heavily regulated banking and financial services sector.Smith warned against allowing banks to make any loans available to projectors(Keynes's speculators and rentiers),prodigals ,and imprudent risk takers.Smith warned of the very serious consequences that would probably result if such loans were made-the aggregate savings of the nation would be"... wasted and destroyed..."[Smith,1776,Wealth of Nations,pp.339-340,Modern Library (Cannan) edition].Smith,contrary to Phillips, was not a believer in laissez fairy land.Smith was, in fact, the last of the Scholastic philosophers.He improved Scholastic thought and brought it up to date through the 18th century .The warnings of Smith and Keynes concerning the dangers of allowing speculators to run economic policy have been ignored.I have deducted 1/2 of a star from my rating because Phillips has ignored these warnings also. Nevertheless,I recommend this book .
An Overlong and Not Very Insightful Look at Excess Debt, Peak Oil, Bad Loans, Bubbles, and Reduced Credibility June 3, 2008
23 out of 31 found this review helpful
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.
WHAT MARKET UTOPIANS HAVE WROUGHT May 13, 2008
21 out of 23 found this review helpful
Kevin Phillips is a national treasure, and, surely by temperament and style, both on the page and in person, is the antidote to the Reagan/Bush era, an era many claim is now at its end. I say that because Mr. Phillips projects a formal, slightly grumpy aura, tempered by a wicked sense of low key humor, which I find refreshing after the Gipper and Crawford Ranch scene. We don't get too much of a biography of him, but I like to imagine him as an old New Englander, hard to fool, the type of teacher that we hope our students will still encounter in their studies. For agree with him or not, you have to take Mr. Phillips seriously. After all, Phillips, 67, a prolific author, has traveled through a good range of our political spectrum, from the right side in 1969 with The Emerging Republican Majority, to his American Theocracy in 2006, and now Bad Money, in 2008, which places him just to the left of center, although he might dispute that and claim that it's the center that has migrated so far to the right since 1980, not him. He is now a registered Independent voter.
The deep frame of Bad Money is the warning that utopian illusions can emerge (and have) in America from the right side of the political spectrum as well as the left, which is where most of our 20th century political dialogue had preferred to locate the threats. Phillips has previously described his 1960's views of the excesses of the left of that era. Now he is horrified at some of his own progeny on the Right and what they have wrought, especially in the realm of the American economy. He lays it out directly in the Preface entitled The Political Economics of Deception: "The most worrisome thing about the vulnerability of the US economy circa 2008 is the extent of official understatement and misstatement - the preference for minimizing how many problems there are and how interconnected they are."
Like all exercises in self-examination, this is a difficult undertaking about a nation which emerged towards the end of its "American Century" as the world's only superpower, and one which has seen itself as a "City Upon a Hill" and has to carry the additional burden of "American Exceptionalism,' which tends to get in the way a bit of a searching national dialogue - especially in a presidential election year, and even one in which large majorities poll that we have gotten seriously "off track." Phillips details just how far we have gotten off track, picking up and expanding upon the final section of American Theocracy, called "Borrowed Prosperity." It seems he wasn't going to write another book for the 2008 election - but the deepening financial crisis of 2007 and a head-in-the-sand attitude by officialdom led him to do it. And I'm glad he did.
He is a patriot in the best sense of the term...not pugnaciously posing as the Patton of market fundamentalism/nationalism, like Larry Kudlow on CNBC, but rather as the prophetic author of Staying on Top: The Business Case for a National Industrial Strategy (1984). That title tells you a lot about what has gone wrong as the FIRE sector (Finance, Insurance, Real Estate) has displaced manufacturing as the leading node of our economy. If it was on a sound footing, we might not be singing the blues, and worse, today. But it's not. Instead, what has emerged is called the "shadow banking system," or the "financial Wild West," or a "liquidity factory," much of it "over the counter" and off the bank's books, unregulated or casually regulated at best. The mortgage crisis, then, was no mere random walk of fate: "Lenders needed to woo high risk borrowers for the good commercial reason that there weren't enough low-risk borrowers to meet the volume demanded by the big commercial banks, investment firms, and other packagers, all pursuing the lucrative fees." So much for the old term "conservative as a banker," now surely one of the great oxymorons of the English language.
While much of the conservative establishment, and a good portion of the Democratic Party as well have wanted us all to obsess over the national debt and federal deficit - public debt - Phillips points out that it is really the frightening growth of private debt - personal and institutional - that is the real problem, having grown from $11 trillion to $48 trillion between 1987-2007. Phillips comments that "`Risky' doesn't begin to describe this new focus in the American economy. Bingeing on debt is reckless, and financialization has a long record of being an unhealthy late stage in the trajectory of previous leading world economic powers." The disturbing thought that "American Exceptionalism" might be subject to the same deep historical forces at work for Spain, the Dutch and the British Empire is necessary but tricky ground to navigate - try calling that notion in to Rush Limbaugh on some slow afternoon at the Credit Default Swap trading desk.
Phillips believes that both parties have testified for this sector as the very essence of the market at work, treating it, in reality, as the key American "mercantilist" sector in the globalization race - one to be bailed out officially or otherwise, whenever it gets into trouble, which is often and expensive, although the market fundamentalists cannot bear to hear it described this way. Here's the vintage Phillips' prose to give you the picture, heading into 2008: "These are not circumstances in which a nation should put faith in an overgrown and overextended financial sector, with its bankrupt mortgage lenders, hotshot hedge funds, and reckless megabanks, several of which (fined years back for colluding with a scheming Enron) wouldn't know a civic obligation from a parking ticket."
The burdens of civic obligation, however, don't fall just on the financial instrument "factories," which are variously described as reckless, malfeasant, dishonest, incompetent and negligent, to give the range of Phillips' wrath. Civic burdens also fall on the citizens' shoulders, a refreshing notion in an election year where families are invariably described as "hard working." He pointedly contrasts the level of economic literacy during the 1890's agrarian Populist Revolt of the south and west, when "periodicals like the National Economist had a hundred thousand subscribers...Compared to early-twenty-first-century torpor and lack of financial debate, the nineteenth-century agrarian civic engagement had an almost Fourth of July quality." Despite all the alarming ingredients being tossed into what would become a witches-brew of financial trouble between 1987-2008, he says these regions of former Populist discontent have been "anesthetized...The principle ethers at work were evangelical, fundamentalist and Pentecostal Christianity, infused with preoccupation with terrorism, evil and Islam that greatly strengthened after September 11." Also noted is the rise of the "Prosperity Gospel" (the religious cousin of the more secular "miracle of the market") among many of the most prolific new churches and its kinship to the religious/prosperity fervor of the Roaring Twenties - and we all know what followed after that.
American consumers scratching their heads in the spring of 2008 over the glaring contrast between the rising prices they face in everyday life and the more soothing reports of the official Consumer Price Index would do well to chew a bit more on that savory title from the Preface - The Political Economics of Deception. The reader is rewarded with a tour of the origins of fiddling with the CPI constituent parts and definitions - and of the possible motives, focused on keeping Social Security and labor COLA clauses down. We learn about one critic - and the critics are growing in number - John Williams, whose work at ShadowStats.com leads to the conclusion that if 1990 CPI methodology were used today, "the government would have been reporting 5 to 7 percent inflation between 2005 and 2007...instead of...2 to 4 percent." It would be enough to have brought the economy close to recession - that's the magnitude hinted at with the difference in these numbers. We also learn that in March 2006, the Federal Reserve dropped "M3," perhaps our best indicator of the overall money supply, and one that would better measure what was going on in those secretive liquidity factories, with the notation from our author that "for 2007, M3 numbers show runaway inflation in the annual range of 14%." No wonder so many of Milton Friedman's remaining disciples are fuming.
And that brings us to Phillips' treatment of the "Plunge Protection Team's" alleged intervention into the futures' indexes to stabilize the stock market at times of extreme turmoil. (A cautionary note here: any consideration of the resemblance between this line of inquiry and the plot line of "The Wizard of Oz", where Dorothy learns that behind the curtain is... hereby formally deferred to a later time...). It was founded in 1988 by Reagan's presidential proclamation as the President's Working Group on Financial Markets. He's doubtful we'll ever get official recognition if indeed these actions happened, due to the lawsuits such a confession might trigger. And, after all, a tactic like this can be financial death to those shorting the market - and also acknowledgment that things are worse than they seem and the "free market" far more dependent on government intervention than market utopians would ever be comfortable with. Phillips disclaims that "I have no personal firsthand knowledge and am not interested in becoming a conspiracy investigator." But he does look closely at the possibility that the team more broadly represents a commitment to a sector too important to fail, worthy of the grandest stretches in existing policy instruments - witness the ground covered by Fed. Chairman Bernanke in the rescue efforts of March 2008. He notes, glumly, that our manufacturing sector received no such considerations of magnitude or imagination during the decades of its long deathwatch.
This review will close with a call to pay close attention to a worry Phillips broaches in Chapter 5, "Peak Oil." This call comes in May, 2008 with oil prices hovering near $125 a barrel, prices which are mesmerizing a nation still stuck on overseas sources. Please consider Phillips' long track record of accurately anticipating our troubles, and listen carefully to the background drumbeat of many not too subtle administration voices pointing to the evil Iran has in store for us and others in the Middle East. It's a time to ponder Phillips' warning: "Political imperatives being what they are, the temptation of conservative civilian leaders in the United States to pursue oil-related military action against targets like Iran is easy to understand...The tinder is almost perfect for a war or military strike rooted in the frustration of a great power in decline."
There is no surer way to usher in the specter of 1929-1933 than to head down this oil strewn path, with all due respect to the powers, real or imagined, of the Plunge Protection Team. By clearly naming the threat, let us all hope we can head it off.
William R. Neil
May 12, 2008
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