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

One would expect that a book subtitled "Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism" would answer two basic questions: (1) What is wrong with the economy, and (2) How did it get that way? As a bonus, we might also like to know just who is responsible for the incipient Great Depression II, so that we can begin erecting gallows and fashioning enough nooses, and we might like to entertain suggestions as to how the crisis might be solved, but it turns out that Dr. Phillips knows no more about economics than do you or I or your local greengrocer. As a result, the book meanders in a desultory manner around various topics that are at best only tangentially related to our financial woes, and most are irrelevant.

In place of specifics about the economy, Kevin Phillips rambles about under the pretense of giving us the "Big Picture" or a "Historical Perspective," and thus we are treated to an entire chapter (chapter 6) on not merely what happened during the first Great Depression, but a complete overview of European history, as well. "In 1618, the fall of a weak Spanish first minister led to a burst of activism, and several years later . . ." And blah, blah, blah, followed by an analysis of the situation in Holland in the seventeenth and eighteenth centuries. It's all absolutely fascinating (NOT!), but the trouble with this is that, if one digs hard enough, one can discover any lesson from history that one's looking for, and when does Phillips get to the economic situation of 2008? He doesn't. If the fact that in the fifth century the capitals of both Rome and Spain were moved to different cities (pg.157) is pertinent to our present situation, then what, if anything, can be considered irrelevant? Rin Tin Tin? Cameron Diaz? Jujubees?

Throughout "Bad Money" Kevin Phillips refers again and again to his previous books (he wants you to buy them), and since he has little information to share with us about the present economic crisis, he begins writing those old books all over again. We get many pages of his American Dynasty, including the scintillating revelation that "John Quincy Adams was elected president in 1824, . . . twenty-four years after his father, John Adams . . ." and that "Benjamin Harrison was elected president in 1888, forty-eight years after his grandfather, William Henry Harrison . . ." (This in a book about the economy.) Phillips has a Mencken-like animosity toward the Christian Right that he vented in his American Theocracy, so he here he spends a chapter placing the blame of our financial situation at the feet of the devout.

Because it's easier to write about than specifics of the financial system, an entire chapter is devoted to the debate on whether the world has reached Peak Oil production or not, but now (November, 2008) that the price of oil has fallen below $50-per-barrel, all that has been rendered moot for the time being.

I would fain admit that on random occasions, the stream-of-consciousness Philips writes in stumbles briefly into economic matters, but much of this is material that you have already read in the same papers and magazines that Kevin Phillips reads. There are many graphs and charts from The Financial Times and many quotes from that British journal. Unfortunately, Phillips adds little to the quotes, and he doesn't clarify the more abstruse terms. This book desperately needs a glossary, and before you read it (not that I'd recommend that you do) you should first become familiar with such terms as brouses, derivatives, credit default swaps, mercantilism, deleveraging, fixed-leg features and two-step binomial trees. (If you don't know what those are, don't feel bad, neither does Kevin Phillips.)

There is some new and startling information in "Bad Money," but much of it is of a dubious nature and is merely mentioned in passing. Our nation's conservative masses have followed the lead of their mob masters (turn-on any radio) and are blaming "minorities" (you know who) for the financial crisis, because these high-melanin types purchased homes they couldn't afford. But what about the "Ninja loans" that Phillips mentions? These were loans eagerly given to people with no job, no income, no assets. Are the brown people to blame for those, too? Unfortunately, Phillips cites such loans only in passing. Which lenders made them? How many such loans were made? Sorry, no further information is available. Likewise, Phillips mentions bonds that were backed by delinquent credit-card accounts. Phillips informs us that these bonds were given a rating of AAA, but that's all he knows.

Phillips provides a stunning revelation when he quotes several sources about a shadowy Plunge Protection Team within the Federal Reserve that may (or may not) have been manipulating the market by secretly buying and selling stocks and futures. On the other hand (pg.60), "There's never been any official confirmation of this." That's quite a serious charge --the Federal Reserve, a government within the government, buying and selling stocks to influence the market-- and I for one would like to learn more about it. Is it happening or not?

Alas, Phillips admits, "I have no personal firsthand knowledge and am not interested in becoming a conspiracy investigator." In other words, he doesn't know. It seems that there is much that Kevin Phillips doesn't know about the economy. Read this book and you, too, will know just as little.

This is a must read for any elected pol who thinks they know whats going on.

This book should be read before The Predator State is read. It is a less detailed, somewhat bias claim the understand the current situation in our economy but it lacks the meat that Galbraith covers in the Predator State.
I do believe that is is worth reading so that some understanding of what we are doing by borrowing so much at this time has caused. We seem to need a good recession to get back our ethics and begin real growth sometime soon. We are in very bad shape and now that the problem has become so large, we cannot just keep feeding the greedy. We need taxes and punishment for the white collar stupid managers that got us here. If only we had the ethics that were in place before the Yuppies and Yippies told us they wanted change but forgot what they were doing due to drugs, we might have been better off today. They failed and they failed by huge amounts.

If you are a Bush hater you will like this one. Too many statistics though. The author does have some interesting ideas about the current economic crisis and I look forward to learning more and deciding which I think are true.

I'd give this 3 1/2 stars as I found the content fairly well presented but felt some of the issues were too rushed and could be more deeply examined analytically. It felt like the publisher's deadline was the more important criterion. Also, I appreciate that this was not a political partisan or ideological diatribe. Phillips is pretty fair in assigning failures to the people in control.

The loss of a star was due to the Kindle edition not linking footnotes or the index to their references in the text. What use is an index with no links or location numbers? Thus, as a non-fiction work for future reference it fails poorly. How about a revised Kindle edition that previous buyers can upgrade to?