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.
Bad MoneyReckless Finance, Failed Politics, and the Global Crisis of American Capitalism
Kevin Phillips
eMusic Review 0
04.15.08
Kevin Phillips, Bad Money
2008 | Label: Penguin Audio
The trouble with America's finances
In the wake of America's economic meltdown, to call Kevin Philips' Bad Money prescient would be to insult the magnitude of what he has accomplished. The author of American Theocracy and American Dynasty, Philips is clearly no stranger to critiquing the powers that be in America, but rarely have his analyses been quite this accurate. In Bad Money, the former Republican strategist takes aim at America's financial giants and their dependence on unsecured debt, in the process virtually explaining the bursting of the housing bubble before it happened.
Philips points out that, post-9/11, America's debt has gone from out of control to simply staggering, and his prediction that the U.S. economy would be sabotaged by real estate loans — which he reports accounted for 40 percent of economic growth during George W. Bush's presidency — has proven all too accurate. Hindsight is 20/20, so it's easy to forget that when Philips published Bad Money in 2008, his negative view of the housing market was still a minority one, often derided by political and financial commentators alike.
But Bad Money isn't just about the housing market — it's a full-on analysis of the economic tenets that America's leaders have held dear for the past quarter-century. Philips shows the similarity of America's economic philosophy to those of other great powers that fell into decline, noting that Spain, the Netherlands, and Britain lost their economic might when they began to base their economy on financial services (which Philips says accounts for 21 percent of America's GDP). He argues that this, combined with America's reliance on oil and foreign loans, might indicate that the United States has dug itself in too deep to escape unscathed. But he does offer some hope: America's natural resources remain strong, and previously fallen economic giants have managed to reinvent themselves and come back stronger than ever.