- Welcome to Capital Account. When Timothy Geithner was asked if the administration is prepared to go over the Fiscal Cliff if Republicans do not agree to raise taxes on the wealthy (those earning 250,000 dollars per year or more), he responded “Absolutely.” But when it comes to the US economic problems, does the tax debate or the Fiscal Cliff debate begin to scratch the surface of the crisis? We talk to Former Republican strategist Kevin Phillips, about lessons we can learn from 1775, the subject of his latest book.
Our guest, Kevin Phillips, made a name for himself in the late 1960’s as a GOP operative who wrote the book “The Emerging Republican Majority,” where he accurately predicted the rise of the Republican Party by securing the South. Now he is writing about revolution: the American Revolution– in particular 1775, a good year for revolution as he says. He delves into the economic factors that have not made it into the mainstream historical reference books as easily as catch phrases like “taxation without representation.” Among them are the inability of colonists to manage their own monetary affairs because of British policies constraining the circulation of specie, over-indebtedness as a result of a lack of money and restrictions on trade, and the British control of trade which required certain commodities to pass through middlemen in London. We talk to Kevin Phillips, former White House strategist, about what we can learn from this history as the US faces its own set of economic and political problems today.
And the SEC is investigating Deutsche Bank for hiding 12 billion dollars in derivatives trading losses in 2008. One more thing to add to the list of alleged bad bank behavior. How is ‘good capitalism’ being driven out by ‘bad capitalism’? Lauren breaks down Gresham’s Law in Word of the Day. Plus, Alan Greenspan, the former Federal Reserve Chairman, told CNBC that a painless solution to avoiding the Fiscal Cliff and reducing US long-term deficits is a fantasy. Lauren and Demetri discuss Alan Greenspan’s analysis in “Loose Change.”