I've just started reading Bad Money and have a few comments.
Kevin Phillips' idea of the finance sector 'metastasising' or infecting the real economy by the distorted malignancy of believing fantasy about wealth, treating the US economy like a pyramid scheme, is one that I find powerful and worrying. http://en.wiktionary.org/wiki/metastasize
says '(medicine, of a disease or tumour) To spread to other sites in the body; to undergo metastasis'. This is a worrying diagnosis of recent American history, invoking the difficulty of surgery for a cancerous tumour that is killing the patient. I like America, and I do hope that President Obama will learn from President Roosevelt's Hundred Days and engage in far reaching change.
An area of Phillips' analysis that I find fascinating and brilliant is his comparison of America to the previous world empires of Britain, Holland, Spain and Rome. He notes that financial dominance emerged in each as a sclerotic prelude to collapse. My own view is that this comparison is not the whole story, and America needs to bounce back to stabilise its economy. However, I do think the imperial comparisons give major strategic insight. My own approach, which I appreciate is not easy to explain, starts from science and astronomy as a way to orient the study of world politics. Long term climate is a basic context. My approach is to interpret history against the mythic astronomical rhythm of the precession of the equinox - the Ages of Pisces and Aquarius. Against this framework, I interpret history on a 2148 year cycle, so we are now at the same point within the Age of Pisces as the world was in the Age of Aries 2148 years ago in 139BC. At this time, Tiberius Gracchus was the Tribune of Rome, confronting the Senate to reform land as Rome confronted its republican institutions with the realities of imperial power, shown in the sack of Carthage and Corinth a few years earlier. As the Punic War against Hannibal is a model for understanding the Second World War, and as Alexander is a model for Napoleon, Barrack Obama finds himself playing a similar historic role to Tiberius Gracchus. What this makes me wonder for the future is whether America will fracture like Rome, with new Marius, Sulla and Caesar preparing for a future imperial military state over the next century. The scale of American military power is orders of magnitude greater than that of Ancient Rome but they bear comparison as world dominating historical powers. China also bears comparison to its history over a 2148 year cycle. Over this time frame, the Communist Revolution corresponds to the rise of the Han Dynasty which ruled in two periods for four hundred years.
Against these comparisons, Phillips' suggestion of American decline in power and the rise of China looks more like America facing turmoil between its republican and imperial sides, while China maintains stability.