Product Details

• Amazon Sales Rank: #357446 in Books
• Published on: 2008-04-01
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 256 pages

Customer Reviews

Disaster Foretold?
This book is disturbing in many ways. Judging from its footnotes, it was completed in early November 2007, but everything it predicted at the time has come true one year later: mayhem in global finance. I hope that since its publication in late March 2008 it has become been a bedtable book for policy makers, economics professors and other financial pundits, because it is a passionate account of all that has gone wrong of late. It has historical depth, and is well informed regarding the US political landscape that facilitated the outrageous reliance on the uncontrolled churning around of cash and derivatives as the basis of the US economy, and much else.

A major tenet of Mr. Philips' book is that bad money chases away good money, and bad capitalism chases away good capitalism. Financial services elbowing out industry, agriculture, transport, telecoms, etc. is, according to Mr. Phillips bad, and proven by history.

Another reviewer of this book blamed Mr. Phillips for not providing solutions. However, the book provides plenty of such, but they have a horizon far beyond the current, inept efforts to stop a downward spiral, such as trying to use taxpayers money to buy toxic products from irresponsible banks without giving taxpayers a stake in the stricken companies.

What is most shocking to this European reviewer, is the lack of warning to European savers and investors of the deluge predicted so well by Mr Phillips. Our press media have failed. Weeks ago a Dutch economics professor confessed on TV that he sold all his stock in September 2007. Kevin Phillips was only halfway into writing his excellent book then.

How come? Who else knew, institutions, persons? Kevin Phillips' book reads as if it was written yesterday, but it is a year old. If all this was known a year ago, why now such tremendous losses and future hardship?

An Overlong and Not Very Insightful Look at Excess Debt, Peak Oil, Bad Loans, Bubbles, and Reduced Credibility
The short message from this book is that the U.S. economy is in trouble and that trouble is about to get worse. Why? Private and government debt and spending are out of control and the chickens haven't come home to roost yet in terms of higher interest rates and higher costs of imports, the government lies about inflation, the credit crisis isn't over by a long shot, peak oil production will cause prices to shoot through the roof, our manufacturing base is gutted, economic growth is going to be lousy, foreigners aren't going to keep taking dollars, and nobody likes us outside of the country. Are you ready to become a second-rate country?

Unless you want to see some of the excellent tables and charts in the book that document these points, you don't need to read the book. Mr. Phillips doesn't add much to that brief message except to make continual references to prior histories of other nations. You would do better to spend your time working on solutions to the problems.

The book is also very dated, focusing on the conditions of August 2007 and the levels of oil prices and debt problems then. As we all know, those were the good old days compared to June 2008.

The writing style is also annoying in that Mr. Phillips doesn't assemble his points into a logical pattern to "prove" what might come next. It's an overly qualitative and anecdotal approach to issues that have quantitative implications.

There's not a bit of advice in the book about what you can do to help secure your future: This book seems to be totally aimed at setting the agenda for the next president of the United States.

Brilliant study of capitalism's economic and moral failure
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.