Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism

by Kevin Phillips

book data

244 ratings, 3.61 average rating, 93 reviews (more data...)

rating	frequency	%
5		15%
4		42%
3		30%
2		8%
1		2%

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published

April 15th 2008 by Viking Adult

details

Hardcover, 256 pages

isbn

0670019070 (isbn13: 9780670019076)

description

In his acclaimed book American Theocracy, Kevin Phillips warned of the perilous interaction of debt, financial recklessness, and the spiking cost (and…more

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Mar 27, 2009

getAbstract rated it:

Read in March, 2009

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 financia...more

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May 01, 2009

Grace rated it:

(review of isbn 0143114808)

bookshelves: current-events, read-in-2009

Read in May, 2009

"The potential U.S. embarrassment, which this chapter must weigh, is whether the emergency of a reckless, hubris-driven financial sector in early-twenty-first-century America is a sunset phenomenon like the lesser versions of Edwardian and pre-1914 Britain, eighteenth-century Holland, and early-seventeenth-century Spain, economically centered on the gold and silver entrepot of Seville and its port of Cadiz." (p. 185)

What does this mean?

This statement means that...more "The potential U.S. embarrassment, which this chapter must weigh, is whether the emergency of a reckless, hubris-driven financial sector in early-twenty-first-century America is a sunset phenomenon like the lesser versions of Edwardian and pre-1914 Britain, eighteenth-century Holland, and early-seventeenth-century Spain, economically centered on the gold and silver entrepot of Seville and its port of Cadiz." (p. 185)

What does this mean?

This statement means that the current financial situation may further America's demise as the world's financial super power.

Author Kevin Phillips revised edition of "Bad Money" outlines the current financial crisis facing America and the world today, describes the changes in our financial structure over the past 150 plus years, and openly discusses issues that need to be discussed by lawmakers and the President as quickly as possible in order to slow down the train wreck our economy and reputation is on.

Even though the book is a bit "thick" at times with its use of financial language and economic concepts, Kevin Phillips does a great job at making it all "make sense" without belittling the intelligence or turning off the average American reader. At one point in the book, he even called Americans out on our ignorance:

"Many people today think hat today's finance is too complicated for ordinary citizens to fathom or handle. Bubbles aside, other financial terms used by the media - credit derivatives, securitization, and even current account deficit - do not lend themselves to conversations in neighborhood bars or beauty parlors. Americans are excusing themselves accordingly. Still, if the farmers of more than a century ago could study and understand Sherman Silver Purchase Act provisions and details of the nationwide currency shrinkage - and many studied and somehow managed - can't we expect as much today? Alas, probably not.

That last part made me sad because the author is probably right.

I have very little background in finance and economics and I was able to take a lot from this book. I highly recommend this book to anyone looking to understand our current financial situation and to those wondering what America's place on the global scene will be in five, ten, even fifty years.

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Dec 21, 2008

Annie rated it:

Read in December, 2008

My buddy Sue B. recommended this author over the summer, (2008). I couldn't find anything at the library other than this one and had to put it on hold and wait. Just got it a few weeks ago and, wow. What a difference a few months make. If I'd read this over the summer my eyes would have rolled back in my head and stayed there (!) as I tried to absorb the now all too familiar terms; securitization of risk, credit default swaps, tranches, or derivatives. Reading this book soon after the swoon in t...more

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Oct 12, 2008

Kitty rated it:

I've read other books by Phillips, which both adds to my understanding of his arguments and increases my dislike of his writing style. He makes some very good points about why the US is looking at a dim political and economic future, but he fails to account for the power of the US military and its alliances across the globe.

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May 30, 2009

Matt rated it:

bookshelves: non-fiction, save-the-middle-class

Read in May, 2009

This book brings to mind two catch phrases from the character Dr. Smith on TV's "Lost in Space".

"We're doomed! Doomed!" and "Oh the pain, the pain!"

Apparently according to Phillips the US is one big debtor nation that as been just barely surviving on tricky finances. We have very little manufacturing and services are being placed offshore. The powers that be think this country can be run like one big Ponzi scheme. Well, it can't and we are...more

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Mar 25, 2009

Aaron rated it:

bookshelves: did-not-finish, sets-the-standard, social-science, social-studies, to-read

Economics and finance are outside my field, so I can't make any solid claims about how this book stacks up compared to others. I can claim that this is the most accessible and readable book I've come across yet on the topic. To be more precise, the several topics, as Phillips ties together several intertwined threads related to international economics and finance. Perhaps most notable and interesting for today are the chapters on oil and "Bullnomics" in light of current events. But rat...more

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Jan 25, 2009

Frank rated it:

Read in January, 2009

Wonderful book. Long gimlet-eyed in Goshen, the irrepressible Phillips has lived to see his predictions of doom for the hyperfinancialized US economy come to pass. This book chronicles the last gasps of decadence in the bubble economy. It also tells a grand narrative connecting the decline of the US to other victims of self-inflicted imperial overreach.

The only flaw in the book is its cynicism . . . .but even this mood may well be vindicated by Obama's hopelessly centrist econom...more

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Nov 06, 2008

George Thomas rated it:

Read in October, 2008

recommended to George by: Bill Moyers from his interview with Author Kevin Phillips
recommends it for: My Dad and Father in Law

Read this book on the plane to/from Spain - check out some cool sights traveling from Madrid to Bilbao to Barcelona, with lots of small towns in between.

Kevin Phillips covers much more than just how Wall Street went crazy packaging American private debt with structured finance innovations that encapsulates the sub-prime housing market as just one aspect. This book also does an interesting job correlating the zenith of earlier international superpowers, specifically Spanish, Dutch, ...more

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Nov 01, 2008

Chris rated it:

Read in January, 2009

If, like me, you aren't strong on financial/econ/poli sci, this book will be a challenging, yet relevant and worthwhile read. The foresight that Phillips has into the workings of our financial and government sectors is spot on. His reviews of historic precedent makes one question if we are indeed the next Rome. While not entirely gloom and doom, Phillips brings an awareness of the precarious situation in which we find our nation, and the challenges that lie ahead for the next administration. ...more

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Oct 13, 2008

Will rated it:

bookshelves: non-fiction

Read in October, 2008

I became interested in the book when I saw Phillips on Bill Moyers, and Moyers offered a strong endorsement, saying that this was the best thing out there to help understand what was happening in the financial crisis. From what I have seen, tough sledding and all, he was right. A better title, might have been Bad, Worse, Worst Money.

This is a very thoughtful, information-rich look at the shaky underpinnings of the contemporary American, economy. Our current precarious position is no...more

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Aug 13, 2008

Barry rated it:

bookshelves: non-fiction

Read in November, 2008

This book is both prescient and dated. It covers the credit crisis up the end of 2007 and correctly forecast the credit problems in the fall of 2008.

Kevin Phillips is also a policy wonk and his tendency is to focus general political realities rather than just finance. Which is often a good thing, but finance viewed in isolation can be a stifling view.

Phillips makes every attempt to make his subject readable but this is still a chart-heavy book. I agree with his approac...more

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Jul 25, 2008

Ryan rated it:

bookshelves: finance, politics, pop-economics

Owns a copy — Read in May, 2008

Phillips discusses several financial topics while arguing that the United States is heading towards a complete economic collapse. He compares the tremendous expansion of America's financial sector to that of other historical world powers (such as the British and Dutch) shortly before those powers collapsed.

Unfortunately, Phillips chose to try and one-up Krugman in shrillness. More importantly, enormous passages were falsified or made irrelevant within a year of publication.

...more Phillips discusses several financial topics while arguing that the United States is heading towards a complete economic collapse. He compares the tremendous expansion of America's financial sector to that of other historical world powers (such as the British and Dutch) shortly before those powers collapsed.

Unfortunately, Phillips chose to try and one-up Krugman in shrillness. More importantly, enormous passages were falsified or made irrelevant within a year of publication.

1. His general "prediction" - that the financial sector would further collapse - was borne out in history, but not quite the way he argued. Most of what he emphasized had already happened late the previous year, and while housing prices continued to plummet well after this book's publication, his concerns regarding the failures of deregulation have not yet been seen again in the market, unless you count Madoff and friends.

2. His objections to the rate of inflation being much higher than presented may be true, but little evidence for this has been since offered (outside the shadow statistics he already cited in the book). The issue as presented is now ambiguous. It's now also besides the point, since the Fed's concern for the passed eight months or so has been to avoid deflation, and in the next year or so whether it can avoid hyperinflation. Whether the Bureau of Labor Statistics is continuously understating the level of inflation by a couple of percentage points just isn't the end of the world right now.

3. His shrill, sneering, haughty arguments about the inevitability of peak oil in the immediate future has been PROVEN WRONG and UNAMBIGUOUSLY WRONG. And it was PROVED UNAMBIGUOUSLY WRONG something like three months after the book was published. Of course he could then say that the projections cited (like that the global production of oil will peak maybe during 2009 and no later than 2011) did not capture the unforeseen global drop in consumer demand, screw him. If the organizations did not include that in their projections, it means they are bad, overconfident projections. ESPECIALLY when Phillips stringently also argues that we are on the verge of a financial collapse, which, you know, might have a large impact on aggregate demand. Especially when following what he proposed that early in the game would have been throwing wealth down the drain. That is to say, actions that may have been appropriate if peak oil were to occur in 2009 are wasteful if it really isn't going happen until 2015, 2025, or 2075.

The book's intention, the historical comparison between the US and older world powers, is a narrative, sheer storytelling. As storytelling, it can't (or shouldn't) be taken seriously. One could say that I'm playing Monday Morning Quarterback here, but I would not be nearly as harsh if Phillips hadn't been so shrill and arrogant in his analysis and predictions. Storytelling is a common human fallacy we all fall into. Myopic, dogmatic storytelling is asinine.

There are a handful of interesting points in the Bad Money that you wouldn't see in a normal pop-econ book, such as the (now trendy) citations of heterodox economics or devoting so much time to shadow statistical agencies. There's nothing that wrong with the analysis of the finance system either, so long as the reader identifies the ideology running through it. If Phillips had simple toned down the ideology and expressed much more uncertainty in his viewpoints, this could have actually been a pretty decent polemic, but as is, the work is mediocre at best.(less)

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Jun 11, 2008

Bruce Sanders rated it:

Everything I've read by Kevin Phillips I've liked, and this book is no exception. The thesis of the book is that when empires enter their waning years, finance replaces manufacturing and trade as the mainstay of the empire's economy; and as finance engages in ever more risky speculation in order to make money the bottom eventually falls out. In this regard Phillips compares the US economy to the economies of Spain, Holland, and England in the waning days of their empires. And there is no doub...more

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Jun 09, 2008

Gail rated it:

bookshelves: read-in-2008

Read in June, 2008

"American Theocracy, Kevin Phillips warned us of the perilous interaction of debt, financial recklessness, and the increasing cost of scarce oil. The current housing and mortgage debacle is proof once more of Phillips’s prescience, and only the first harbinger of a national crisis. In Bad Money, Phillips describes the consequences of our misguided economic policies, our mounting debt, our collapsing housing market, our threatened oil, and the end of American domination of world markets. ...more

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Dec 17, 2008

Antonia added it

Read in January, 2008

Not at all a fun read in fact I had to force myself to stay awake. But I wanted to take a pass at understanding the economic meltdown we're in and Phillips is a savvy guy I see on Bill Moyers and like. Greed is not so shocking but it is shocking to read how the regulatory agencies and ratings agencies and the government in general abetted bad practises and ignored blatant warning signs of disaster. Well written requires lots of concentration to follow Phillips discussion.

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May 08, 2008

Cindy rated it:

bookshelves: political

Read in May, 2008

recommends it for: anyone with a concern for tomorrow

Anyone with a house and or bank account will be pretty perturbed after reading this book. Kevin Phillips predicts that it may not be 30-40 years before the US recovers from the mortgage/personal debt/Iraq chaos/dollar drop and oil crisis currently affecting the average American, but it will be close. Our upcoming presidential election could tilt us back on track or completely over the edge. The OPEC oil countries combined with the emerging Asian, Russian and South American economical gains co...more

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Nov 10, 2009

Marty rated it:

bookshelves: financial

Read in November, 2008

I'm a big fan of Kevin Phillips, but this one disappointed me. It seemed rushed at times (perhaps because his publisher wanted the book to be one of the first "financial crisis" books to hit the shelves?) and his flirtation with the peak oil theory was intriguing but ultimately unconvincing. Not surprisingly he is at his best when describing the politics of the bailouts and the potential for political realignments.

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Nov 07, 2008

Robert rated it:

bookshelves: to-read

A extension of the financialization theme from the book American Theocracy inspired by the recent unraveling of the subprime mortgage market that demonstrates that theme, and the understanding that there will be more to come as the United States continues to become more debt-ridden and finance becomes an even greater share of the GDP. It is already the largest part of the GDP. History shows that powers that shift from being producers to rentiers soon become ex-powers. Nations that live beyond...more

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May 05, 2009

Claire S marked it as to-read

bookshelves: a-1-immediacy, a-1-_-pol-crucial, fin-econ, form_complexia, f_interpretations, global, historical, obama-term-1, pol-historical, pol-paradigm-shift-pssbl, politics-learning, to-read, u--s--hist, u-s--hist_corp-indstry, women, workplace

He has a piece up at TPM that is very good, in response to recent comments expressing false optimism about the US economy. He lists about 12 darts each of which is sharp-tipped enough to completely deflate such foolish perceptions. Brutal. And he mentions that an updated version of this book is out or coming out soon. Will be looking forward to reading that!

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Feb 28, 2009

Julie rated it:

Read in August, 2008

Read this when the economy started sliding. Phillips is very smart, and I fear that he is right that this will be a very long term downturn. His main thesis is that the financial services industry became too large a part of our GDP, and since it doesn't actually produce anything other than paper wealth, it was not a long term source of growth.

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