Bad Money: The Global Crisis of American Capitalism by Kevin Phillips

[Better Believe It]

BOOK REVIEW
'Bad Money' by Kevin Phillips
Which handles money better? A casino or Wall Street? A look at the reckless financing and political decision-making preceding the current economic crisis.
Reviewed by Tim Rutten, Los Angeles Times Staff Writer

April 16, 2008

Kevin Phillips' new book, "Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism," would be sobering enough if it were the first we'd ever heard from him. When you take into account how often he's been right in the past, this 14th volume in his continuing commentary on the American condition becomes positively alarming.

In part, this latest book is meant as a rhetorical shot across the bow of the current presidential campaign, which Phillips convincingly argues is failing to address the causes and implications of our current distress. There's plenty of that to go around: The economic expansion that has occurred during the Bush administration was the first in U.S. history to exclude the middle class. Previous booms had left the poor behind, but this one was the first to benefit only the rich. Median family income is still less than it was in 1999, which makes this the longest slump ever measured in that key indicator of middle class well-being. The Clinton boom was no great shakes for the great middle either: Since 1983, according to a recent survey by the nonpartisan Pew Research Center, "the median net worth of upper-income families more than doubled, while the median net worth of middle-income families grew by just 29%."

Yet, for a variety of reasons, including the Clintons' close and quite obviously mutually beneficial relationship with Wall Street, Phillips doesn't hold out much hope that either party is willing to address the roots of the crisis. The GOP's faith in markets is absolute, and the religious right's blind embrace of capitalism has eliminated populist dissent from the party's internal debate. The Democrats, meanwhile, are irreparably compromised by contributions from the Wall Street bankers and hedge fund managers, who are at the center of the current global meltdown.

"My summation," Phillips writes, "is that American financial capitalism, at a pivotal period in the nation's history, cavalierly ventured a multiple gamble: first, financializing a hitherto more diversified U.S. economy; second, using massive quantities of debt and leverage to do so; third, following up a stock market bubble with an even larger housing and mortgage credit bubble; fourth, roughly quadrupling U.S. credit-market debt between 1987 and 2007, a scale of excess that historically unwinds; and fifth, consummating these events with a mixed fireworks of dishonesty, incompetence and quantitative negligence."

You can read the entire review at:
http://www.latimes.com/entertainment/la-et-rutten16apr16,0,4634814.story

I haven't read any of his books. Is anyone here familiar with his writings? This sounds like a book worth buying.

[Lorien]

1. His book "wealth and Democracy" was on the NYT bestseller list for months

he was Nixon's "Karl Rove", but he's less enamored with the current GOP. Here's an interview that he did with Bill Moyers:

http://www.pbs.org/now/transcript/transcript_phillips.html

[Cresent City Kid]

2. You can bet on it

I always noticed the similarity of Wall Street to casinos, excpet that casinos favor the house, and Wall Street favors the players.

[arendt]

3. Kevin Phillips is a national treasure. A person with integrity.

He first appeared in the 1960s, as the author of "The Southern Strategy" - the plan Nixon followed to win.

But by the 1990s, he was fed up with the GOP, the financialization of everything, and the coup in the GOP. He has blasted the Bush Dynasty, Wall Street, and fundamentalism. He also has written some decent history books, like "The Cousins Wars".

Read anything he writes.

arendt