Summary of Bad Money

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Rating

8

Qualities

  • Analytical
  • Overview

Recommendation

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 financial circumstances, whacks both the Bush and Clinton administrations, and offers his take on everything from imperial England to the efficient market hypothesis. After he explains how and why the U.S. is teetering dangerously on the brink of disaster, getAbstract is relieved to report that Phillips also offers some ideas about how it might rescue itself by going back to strong manufacturing, solid education and better regulations. This seems to be a fairly hasty overview of bad times, but the author can see beyond the immediate storm to the possibility of a brighter day.

About the Author

Kevin Phillips has been a political and economic commentator for more than three decades. A former White House strategist, he has been a regular contributor to The Los Angeles Times and National Public Radio. He has written for Harper’s and TIME, and is the author of 10 books.

 

Summary

Deceit and the Politicized Economy

The U.S. economy is weak and vulnerable, yet officials deny, obfuscate and understate the magnitude of the problems and the relationships among them. It is far from certain that the nation’s politicians will be able to deal with the damage wrought by its policies on debt and oil. Underlying both issues is a far broader, more pressing concern: the metastasizing financial sector. This sector includes shadowy institutions that are able to create money, like banks, but that, unlike banks, are not subject to regulatory scrutiny. Proponents say that the financial sector’s power made the economy more efficient and created wealth. That is nonsense. The growing dominance of finance in the U.S. political economy is a worrisome development. History demonstrates that when finance rises to such prominence, national decline is imminent – if not already under way.

Summer Heat

Late summer historically has been the season of credit shortages, bank failures and financial disasters. In late summer 2007, the markets trembled over subprime mortgages. Credit froze and the trading of collateralized debt obligations slowed so dramatically it was ...


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