Thursday, March 20, 2008

The Go-To Guy on Our Crumbling Economy

Want to know what's behind all the wretched economic news we're seeing lately? Well, be sure to visit your local bookstore on April 15.

That's when Kevin Phillips' latest book--Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism--will be released.

Actually, you don't need to wait for Bad Money to come out. You can go to your library and check out Phillips' 1990 classic The Politics of Rich and Poor. I read Rich and Poor in 1991, and it turned me into a Bill Clinton voter and an anti-Republican for the rest of my life.

Once you read Rich and Poor, you won't be surprised by what is happening now. In fact, it was to be expected.

Phillips' work is so powerful because (a) He's a world-class economic historian; (b) He's a gem-dandy writer; and (c) He's a former Nixon Republican, who is repulsed by the Reagan brand of modern conservatism.

Rich and Poor takes us back to the 1800s and the Gilded Age, showing us the stark downside to conservative economics. Two themes play out over and over in Phillips' narrative that covers 100-plus years:

* Conservative economic policies inevitably lead to a growing income gap, with a shrinking slice of the economic pie for the middle class. After the usual boomlet that comes with tax cuts for the wealthy, the economy always falters when the middle class no longer has the discretionary income to buy things. It happened multiple times in the late 1800s, again in the 1920s, again in the late 1980s, and again right now. These all came after periods of conservative control of both the executive and legislative branches.

* Conservative economic policies inevitably lead to hyper-speculation, scandal, and financial hardship. Again, this has happened in the eras noted above, and it is happening again. We had the Great Depression in the 1920s, the savings-and-loan scandals of the 1980s, the subprime mortgage mess of today.

Just how bad is the current economic picture? Scott Horton, of Harper's, presents an excellent roundup, under the headline, "And Now for the Really Bad News . . . "

The lowlights include a subprime mortgage mess, a shaky housing market, the Bear Stearns Buy-Out, the collapsing dollar, teetering global markets . . . you get the idea.

Bush supporters would have you believe this is just a normal downturn in the economic cycle. But Kevin Phillips readers know better.

If you want to get the lowdown on Phillips, an excellent place to turn is a New Republic article by John Judis. Phillips is a master at taking the foibles of modern conservatism and laying them bare for all to see. This is at the heart of his most recent book, 2006's American Theocracy. The followup will be the upcoming Bad Money.

The Republican Party, Phillips says, has slowly become the vehicle of "a fusion of petroleum-defined national security; a crusading, simplistic Christianity; and a reckless credit-feeding financial complex." Under the Bushes, we have embraced "high-powered automobiles, air strikes, and invasions," become "the world's leading Bible reading crusader state," and suffered from "burgeoning debt levels" and the "implosion of American manufacturing."

That's pretty strong stuff. But Phillips was only getting warmed up in the Judis article. Does Phillips have problems with the Bushes? You make the call:

Phillips portrays W.'s election as a "dynastic succession" made possible by crony capitalism, campaign chicanery in Florida, and populist manipulation. The father's "political Achilles heel" was his "cultural schizophrenia ... an unstable mix of genteel northern moderate conservatism and the two-gunned Texas brand." The son, with "the cow country accent, the rumpled clothing, the chewing tobacco, the style of religiosity, the moral fundamentalism, the outsider language, the disdain for the Harvards and Yales, the six-gun geopolitics, and not least the garb of a sinner rescued from drink and brought to God by none other than evangelist Billy Graham," was "almost a caricature overcorrection of several of his father's greatest political weaknesses."


And how about this on the Bushes:

In American Theocracy, Phillips charges George W. Bush and his father with promoting "a reckless dependency on shrinking oil supplies, a milieu of radicalized (and much too influential) religion, and a reliance on borrowed money." The invasion of Iraq, Phillips argues, was intended in part to "rebuild Anglo-American oil company reserves, transform Iraq into an oil protectorate-cum-military base, and reinforce the global hegemony of the U.S. dollar." But religion also played a role. "There is something about Iraq--most cynics would nominate oil, but the influence of the Bible is also relevant--that clouds the competence of Anglo-American invaders and occupiers," Phillips writes.

Phillips goes on to take some whacks at Republican voters:

He condemns "the increasingly narrow, even theocratic, sentiment among Republican voters" as a threat to American science and democracy. Phillips writes, "No leading world power in modern memory has become a captive, even a partial captive, of the sort of biblical inerrancy ... that dismisses modern knowledge and science." Phillips simply has no patience with this large part of the Republican middle-class base. It "favors military intervention in the Middle East to promote the fulfillment of end-times prophecy and the second coming of Christ," rejects the climate-change treaty because it is "incompatible with the Book of Genesis," and believes in "the rights of embryos" and "the prerogative of the sperm and egg to join" over "the arguable rights of women."

Phillips is deeply troubled by the Religious Rights influence on the Republican Party:

"Some 30 to 40 percent of the Bush electorate, many of whom might otherwise resent their employment conditions, credit-card debt, heating bills or escalating cost for automobile upkeep (from insurance to gas prices), often subordinate these economic concerns to a broader religious preoccupation with biblical prophecy and the second coming of Jesus Christ."


Finally, Phillips takes on the "car culture" of the Southern states, including Alabama:

Phillips notes that the top four states where Bush has done better than Ronald Reagan--Alabama, West Virginia, Kentucky, and Tennessee--are "fundamentalist and evangelical strongholds notable for their unimpressive rankings in education, mental health, child poverty and homicide rate." He even rejects the "car culture" and "hydrocarbon culture" of the South, Southern border states, and prairie states--noting that all "thirteen states with 75 mph speed limits ... all lopsidedly backed George W. Bush for election."

My guess is that Bad Money will be one of the five most important books of 2008. I highly recommend it to Legal Schnauzer readers. And an excellent way to prepare for Bad Money would be to read The Politics of Rich and Poor.

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