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America's Decline in the 1990s

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Kevin Phillips provides lessons in history on the decline of the Dutch and British that parallel the decline in Washington D.C. that was evident in the 1990s.

He also explains the Jeffersonian idea that Washington must be periodically "attacked and purged" in a political, electoral sense- a "populist" process of American electoral "realignment and renewal."

He provides some stunning numbers while documenting the explosive growth in the staffing of congressional and senatorial aides. Not only that, but there has been expansive growth of lobbyists, think tanks, and the crossover of former government officials.

On the culture of Washington D.C. Mr Phillips had this to say- "The important thing is that both parties are enmeshed; neither is any longer able to fulfill campaign promises about cleaning house in Washington."
And he's right!

On finance and government he observed that speculation replaced investment and financiers gained more control of government. The philosophy that short term speculation is pursued rather than long term investing.
He also critically assesses derivatives and the related speculating.
A few great quotes on finance and government were in the book.
From Business Week in 1992- "The trouble is, Corporate America is surviving at the expense of Household America."
From Thomas Jefferson- "Banking establishments are more dangerous than standing armies."

While I don't agree with some of the 10 solutions that form Mr. Phillips plan for bettering government, I find some of them be sensible!
The best in my opinion was confronting the power of multinational corporations and minimizing the effects of globalization on average Americans. The regulating of speculative finance and reducing Wall Street's influence on government would be another idea that I like.

Another title that I considered for this review was "A Lost Oppurtunity".
I think that Kevin Phillips was correct on a lot of his criticisms in the book and the last 15 years have born that out, especially on the economy and finances.

4.5 stars-A more nuanced study than " Boiling Point".

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Phillips's book get closer to identifying what the core problem facing the USA is than he did in his earlier "Boiing Point".The problem has been building ever since President Jimmy Carter embarked on his ill advised decision to deregulate and privatize the financial sector of the economy.This simply let the speculative genie out of the bottle.It will be very difficult to rein him in.Phillips correctly goes to the heart of the matter in his recommendation number 7, presented on pp.201-204. "During the 1980's and early 1990's the Fed emerged as a reliable ally of the banks,the financial markets, and speculative finance at the expense of consumers,farmers,small businesses and homeowners "(p.203;1994).This is the heart of the problem.It directly ties in to Phillip's recommendations 4 and 8,respectively, concerning the curbing of Washington lobbies and globalization.Both of these latter problems can only be fixed if the Fed is truly independent from government,Wall Sreeet,and the big commercial banks.Only then can it carry out its task .

I have deducted 1/2 of a star because Phillips is unaware of the fact that Adam Smith had already discussed this problem in great detail in 1776 in his path breaking The Wealth of Nations.Smith's Requirement number 1 is that all loans must be cut off from speculators.Otherwise,the savings the loans represent will be " ...wasted and destroyed...", instead of being transformed intertemporally into the needed plant and equipment required to reestablish American industrial , manufacturing,and agricultural capacity ,which is what the wealth of nations consists of(Smith,Modern Library(cannan)edition,pp.339-340).The wealth of nations does not consist of " financial services " resulting from massive speculation and securitization undertaken by Wall Street investment banks and their allies within the Federal Reserve System.

An Angry Call For Radical Reforms To Shake Up Washington

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The author Kevin Phillips is an exemplary example of a frequent Washington type: the former insider turned angry, prophetic outsider. Trained as an attorney, experienced as a a Republican Congressional aide at the modern lowpoint of Republican strength in Washington, acclaimed as a key strategist in Richard Nixon's 1968 Presidential comeback, the author has long been given to gathering masses of data and reaching bold new conclusions with a stunning certainty that is only partially vindicated by subsequent events.

The author's top six suggested governmental reforms are "(1) dispersing the capital and having Congress meet in another city for part of the year; (2) allowing congressmen and senators to vote from their home states and districts; (3) establishing a mechanism for national referendums; (4)concentrating a major attack on the hired-gun culture in Washington; (5) reining in abusive finance and its political influence by regulating electronic speculation, curtailing the nonaccountability of the Federal Reserve Board and establishing a federal financial transactions tax; and (6) fudning deficit-reduction largely by taxing its obvious beneficiaries."

The author's top ten broad proposals are "(1) Decentralizing or dispersing power away from Washington; (2) Modifying the U.S. Constitution's excessive separation of powers between the legislative and executive branches; (3) Shifting U.S. representative government more toward direct democracy and opening up the outdated two-party system; (4) Curbing the Washington role of lobbies, interest groups, and interest peddlers; (5) Diminishing the excessive role of lawyers, legalism, and litigation; (6) Remobilizing national, state, and local governments through updated boundaries and a new federal fiscal framwork; (7) Regulating speculative finance and reducing the poltical influence of Wall Street;(8) Confronting the power of multinational corporations and minimizing the effects of globalization on the average American; (9) Reversing the trend toward greater concentration of wealth and making the tax system fairer and more productive; (10) Bringing national and international debt under control."

To get to these and numerous other reforms and secondary goals, the author gives us a sweeping tour of what ails America, full of a unique collection of facts ( for instance, the decade by decade growth of governmental employment and population in the Washington metropolitan area), world historical parallels (comparing the broad trends of American economic history with that of Holland, Great Britain, Spain, and other countries), and American historical parallels (declaring frustration that as our country ages there is not the sweeping change with new administrations that there was with the administrations of Thomas Jefferson and Andrew Jackson.)

The author tends to see Washington interest groups as part of a kind of vast conspiracy, focusing on its own interests at the expense of the public interests. He gives short shrift to the reality that many of the interest groups are in constant competition with each other for scarce resources: governmental funds in an era of tax cuts, favorable regulations in an era suspicious of any regulations, and the time and favor of relevant governmental decision-makers.

The author focuses a disproportionate amount of attention of the U.S. House of Representatives, as the body most susceptible to governmental reform. Yet, in this, the author ignores the fact that the overwhelming majority of lawyers and lobbyists are focused on the executive branch, which his gneral collection of reforms tends to ignore or downplay.

The author believes that the U.S. is at a crisis point, and he advocates this with a mixture of public opinion poll data, quotes from angry, longshot Presidential candidates, Washington think tanks, and historical parallels with other countries, especially English-speaking countries. But this wide-ranging collection of information, impressions, and attitudes tends to dilute the case he is making as well as strengthen it. If hostility to government among the populace is, in fact, a worldwide democratic phenomenon, then it is somewhat contradictory to argue that the unique governmental system of the United States is responsible for it.

The author believes America is a country past its peak, a country entering a profound stage of economic decline. Internationalism is not a series of policies designed to benefit the average American, the author warns, but rather a series of policies aimed to benefit a small wealthy slice of the public at the expense of the rest of the public. Public policy's goal should not be to promote internationalism, but to curb its negative effects on the average American, the author says.

Reading the author is always an eye-opening, thought provoking experience. He does not generate his own research, but is a broad and creative user of an incredible array of secondary sources--from Karl Marx to Ross Perot to leaders of Washington think-tanks to newspapers to histories of the U.S. and other countries. He is a peerless summarizer and polemicist whose contstant search for broad themes gives life and purpose to what otherwise might be a quicksand of statistics and studies.

History is repeating itself, unfortunately !

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This has to be one of the best books on contemporary politics. Kevin Phillips did extensive research into the historical pattern of rise and subsequent decline of great powers and found uncanny similarity to where America is today. However, he did suggest 10 solutions that hopefully would arrest the decline of this nation and hoped those would be carried out in the 90s (this book was written in 94). Guess what ? None of his 10 solutions was implemented even to the slightest degree. If anything the problems he mentioned in the book have become even more serious in the past decade.

The decline of this nation is now inevitable. There is no need to shed tears over it, though. It happened to Rome, Greece, Spain, and most recently Britain. To think we can somehow escape was probably wishful thinking to begin with but the failure to take positive action to even to try to slow the decline just makes the ultimate fate that much more certain !

A little off the mark

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This book came out in 1994 and its eminently readable today, especially today. Phillips is one of those tireless workers today in America much like the other crusaders like Nader and Michael Moore who keep the truth front and center of what is being done to this country by our so called representatives in Washington. There is one problem with the Phillips prognostication in this book. In 2003 with 20/20 hindsight it becomes clear that Phillips was far too optimistic in his expectation that the body politic here will make a move for change and reform. Alas! he seems to have under estimated or should I say, mis-underestimated the power of the cancer that is now raging rampant in Washington. He prophesies that in the twentyfirst century the two party system will be over. Not only is it ever more full of life blood but a conservative wave is sweeping the nation with the Christian Coalition in full cry. The wolf in sheep's garb leading the faithful on the heels of wherever society may go in the hands of the GOP. Considering this, in my opinion, America is finito. Its over. The ... we send to Washington every election cycle, they will never stop a-... and the people who benefit from this..., viz K-Street and all the corporations will see to it that reform will not even be a whisper a 100 miles from Pennsylvania Avenue. 95% of the seats in Congress are non-competitive, this means that third party candidates are forever shut out. Try running a Green candidate in Orange County. You might have to take out a life insurance policy before doing that. Most of the Senate represents only 16% of the country, i.e. mid-western states in terms of population. Witness the farm bill pork that goes out without fail every year. So, read this book, its a great book but remember America is on a downward spiral, a very long spiral and revolution is probably at the end of that. Look at California right now, they are getting probably 40 cents to every dollar they send to Washington in federal taxes, this burden is going to only increase not decrease. Now, extrapolate that into the future another 10-20 years, what we will have then will be squalid ghettoes in portions of California where there will be a complete breakdown of services. Sewers in San Diego are even now 20-25 years old and there is little sign that they will get fixed in the near future....well you get the picture.