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

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

by Kevin Phillips


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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.

Product Details

ISBN-13: 9780143114802
Publisher: Penguin Publishing Group
Publication date: 03/31/2009
Edition description: Updated
Pages: 352
Product dimensions: 5.40(w) x 8.40(h) x 0.90(d)
Age Range: 18 Years

About the Author

Kevin Phillips has been a political and economic commentator for more than three decades. A former White House strategist, he is a regular contributor to the Los Angeles Times and NPR and writes for Harper’s and Time. His books include New York Times bestsellers The Politics of Rich and Poor and Wealth and Democracy.

Table of Contents

Preface to the Revised Edition: After the Fall: The Inexcusable Failure of American Fianance xi

1 Introduction: The Panic of August 1

2 Finance: The New Real Economy? 29

3 Bullnomics: Its Favoritism and Fictions 69

4 Securitization: The Insecurity of It All 96

5 Peak Oil: A Potential Pivot of the 2010s 120

6 The Politics of Evasion: Debt, Finance, and Oil 154

7 The Global Crisis of American Capitalism 179

Afterword: Speculative Capitalism Endangered: The Domestic and Global Consequenses 210

Appendix: Global Public Opinion and the Loss of Respect for the United States, 2003-7 237

Notes 241

Index 261

What People are Saying About This

From the Publisher

"A harrowing picture of national danger that no American reader will welcome, but that none should ignore. . . . Frighteningly persuasive."
-Alan Brinkley, The New York Times

"An indispensable presentation of the case against things as they are."

"Sobering . . . positively alarming."
-Los Angeles Times

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Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism 4.2 out of 5 based on 0 ratings. 19 reviews.
TulaneGirl More than 1 year ago
Kevin Phillips gives a provocative analysis of our current economic crisis. Except that incredibly he did it a year before it came to pass. We are now living the predictions made in this book. He also gives a good analysis of how it came to be - the mechanisms that allowed it to happen, the bad decisions that were made, the hubris that created the environment. And he does it all in a user friendly way.
willyvan More than 1 year ago
In this brilliant book, Kevin Phillips, a long-time student of the USA, exposes Wall Street's greed, criminality and stupidity. He also exposes the governments which thought they had 'picked a winner' in Wall Street as a whole. They passed laws keeping finance outside the law and gave hedge funds a licence to create debts which acted as money. The USA's bloated financial sector grew from 12% of GNP in the 1980s to 21% by 2005, at the expense of manufacturing industry, which fell from 25% to 12% of GNP. The market does not help industry by its bets on changes in asset prices. The problem is still Wall Street's toxic debts in banking, insurance, real estate and securities. From 1987 to 2006 the USA's total credit market debt rose from $11 trillion to $44 trillion, 340% of GDP. Wall Street has borrowed $15 trillion since 1983. Derivatives were $615 trillion in 2008, up from $14 trillion in 1993. Mortgage debt doubled to $10 trillion. Obama has cosseted, not controlled Wall Street, aiding even greater concentration of economic power. The bailouts rescued the five biggest commercial banks (Citigroup, JP Morgan Chase, the Bank of America, Wells Fargo and Wachovia), and the five biggest investment banks (Goldman Sachs, Bear Stearns, Morgan Stanley, Merrill Lynch and Lehman Brothers), the top four mortgage firms and insurance giant AIG. But Obama has not required the banks to lend to the real economy. Instead, federal dollars are funding gross bonuses and salaries. Phillips goes on to show how the new seven sisters are not private US firms, but state-owned oil companies: Saudi Aramco, Gazprom (Russia), PetroChina, the National Iranian Oil Company, Petrobras (Brazil), Petronas (Malaysia) and Petroleum de Venezuela. They control 75% of world petroleum reserves. OPEC is moving towards pricing oil in euros not dollars. Phillips shows how the attack on Iraq led to soaring oil prices, transferring vast wealth from the USA and Britain to the oil-producing nations. He stresses the need for energy security and calls on Americans to abandon 'the hubris of military and financial imperialism', to strengthen their manufacturing industry and curb their bankers.
Guest More than 1 year ago
Kevin Phillips once again provides a thoughtful and provocative analysis of the economic and social condition of the United States. Not for the mindlessly jingoistic: the USA needs a little tough-love if it wants to maintain its leadership role in the world and Phillips provides great background for the tough decisions ahead, if there are any politicians or citiziness out there brave enough to make and fight for them.
Bartflo More than 1 year ago
The author's incisive opinions and broad knowledge make this volume essential reading for thoughtful readers.
reannon on LibraryThing More than 1 year ago
Keven Phillips is a respected and knowledgeable writer on politics and economics since as a young man he predicted the realignment of American politics with the domination of conservative Republicans. In this book he looks at the current global crisis, comparing it against three previous imperial failures, that of Spain, the Dutch, and the British. He goes into lengthy explanations of the financial services sector domination of the U.S. economy and the questionable nature of the wealth it produced and the reasons for the failure of these financial instruments. He also ties in the question of the influence of oil on the world's economy, politics, and wars. If oil production has, or is about, to, peak, the world's economies are in for major and painful restructuring. Moreover, failed U.S. foreign policy, especially the disastrous Iraq war, has increased the speed of the formation of anti-American or post-American power blocks.An important look at the current financial crisis and the problems that led up to it.
PointedPundit on LibraryThing More than 1 year ago
Monday, June 23, 2008Phillips Loses Sight of an Essential American TraitBad MoneyBy Kevin PhillipsHardcover: 256 pagesPublisher: Viking Adult (April 15, 2008)ISBN-10: 0670019070ISBN-13: 978-0670019076Rating ¿ 3 starsI 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 standardsHe 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 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.Penned by the Pointed PunditJune 23, 20088:39:57 PM
worldsedge on LibraryThing More than 1 year ago
I have a grand total of two complaints to level against this work: First, it tries to cover too much territory for a mere 200 or so pages of text, excluding notes and index. Second, it appears Mr. Phillips doesn't quite "get" the Efficient Market Hypothesis, as discussed on pages 73-79 of the text. Not that I personally consider the EMH above criticism necessarily, simply that Mr. Phillips seems to be battling against a straw man, using a version of EMH that very few people who believe in it hold.But these are two relatively minor blemishes on an otherwise very well written and very frightening work. Simply put, Phillips thinks the days of US domination of the world are over. And not only that, the activities fo the powers that be over the last thirty years have done nothing but create a bill that is now going to have to be paid sooner rather than later. The best chapters of the book are Chapter 4 on securitization and Chapter 6 on Debt and Oil. Phillips seems to truly understand both topics.
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badger11 More than 1 year ago
Bad Money offers an in-depth look at the major contributing factors that caused our current recession. It provides historical background as well as the application of empirical research. This combination makes it suitable reading whether or not one possesses a strong business acumen.
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Guest More than 1 year ago
Well what can you say. The U.S. Goverment is going to spend at least 700 Billion dollars to bail out the companies of these criminally negiligent a__holes.