When Kevin Phillips, author, commentator, former Republican strategist (who helped usher in the Reagan era), and an economic analyst (who forecast the present housing and credit ordeal) warns of yet further crises ahead, people may not agree with him, but they do well to listen.
His latest of 14 books is Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism. His debatable thesis is that the U.S. financial sector has engaged in a huge gambling con with other peoples' money, putting at risk not just the present shareholders of major financial companies, homeowners with risky mortgages, or their lenders, but the entire prestige and power of our great nation. Or, that our formerly great nation, by allowing itself to be duped into these and other such shaky debt-ridden schemes, in lieu of maintaining genuine innovation and productivity, are going the way of former failed powers in the model of the Dutch, Bourbon Spain, ancient Rome, and the British, among others, who in their turns had left off a real economy for the glitz of a complacent "services" approach to maintaining hegemony. He believes we have tried to do too much on the global scene, have not reinvented ourselves politically, are using outmoded energy approaches, even as the rest of the world is waking up to the need to transform the energy equations, and that we are resting the entire house of cards on an even less sustainable foundation of huge corporate, governmental, and private debt.
The unchecked propagation of asset-backed securities, an overuse of derivatives, the explosion of risky, unregulated hedge funds, and a substantial weakening of the U.S. dollar are just a few signposts pointing the way if not to ruin for our power, prestige, and heretofore unquestioned economic supremacy then at least to their decline relative to other rising or major players on the global stage.