Inflated: How Money and Debt Built the American Dream [Hardcover]

R. Christopher Whalen (Author), Nouriel Roubini (Introduction)

Book Description

Publication Date: December 7, 2010

Americans as a whole view themselves as reasonably prudent and sober people when it comes to matters of money, reflecting the puritan roots of the earliest European settlers. Yet as a community, we also seem to believe that we are entitled to a lifestyle that is well-beyond our current income, a tendency that goes back to the earliest days of the United States and particularly to get rich quick experiences ranging from the Gold Rush of the 1840s to the real estate bubble of the early 21st Century.

Inflated examines this apparent conflict and makes the argument that such a world view is so ingrained in us that to expect the United States to live in a "deflated" world is simply unrealistic. It skillfully seeks to tell the story of, money inflation and public debt as enduring (and perhaps endearing) features of American life, rather than something we can one day overcome as our policy makers constantly promise.

• Features interviews with today's top financial industry leaders and insiders.
• Offer a glimpse into the future of the Federal Reserve and the role it will play in the coming years
• Examines what the future may hold for the value of the U.S. dollar and the real incomes of future generations of Americans

The gradual result of the situation we find ourselves in will inevitably lead to inflation, loss of economic opportunity, and a decline in the value of the dollar. This book will show you why, and reveal how we might be able to deal with it.

Editorial Reviews

Review

'...takes the reader on a journey through more than two centuries of monetary and fiscal policy and banking.' (The Economist, December 2010).

From the Inside Flap

When it comes to matters of money, most Americans tend to view themselves as reasonably prudent people, reflecting the puritan roots of their European ancestors. Yet, at the same time, Americans also seem to feel entitled to a lifestyle, individually and nationally, that is well above the rest of the world's, and well beyond our current means. Inflated: How Money and Debt Built the American Dream explores more than two hundred years of American politics and monetary policy to examine this conflict. In doing so, it asks whether the current understanding of the American Dream, one of entitlement, is so ingrained that to expect Americans willingly to live in a "deflated" world is unrealistic. This book simply and directly tells the story of inflation and public debt as enduring, and perhaps even endearing, features of American life. It describes:

• The Gold Rush and how dreams of instant wealth replaced the notions of hard work and saving as the national ideal
• How Congress's deficit spending is a direct legacy of Abraham Lincoln's presiding over the first legal tender laws, which gave the federal government control overthe issuance of "money"
• How the financial crisis of 1893 led to the creation of the Federal Reserve System, ultimately confirming the cautionary views of Thomas Jefferson and Andrew Jackson that a central bank would prove antithetical to democracy and individual rights
• The rise of investment trusts during the 1890s, and how those trusts were the precursors of hedge funds and complex financial derivatives
• How the dollar's role as the world's currency after WWII encouraged America's tendency to demand immediate gratification of national wants and needs
• Why the Gold Standard Act of 1900 was the high watermark for sound money in the United States, and why Richard Nixon's decision to end the dollar's gold convertibility in 1971 opened the door to vast inflation and debt in the decades that followed

Whether taming the frontier in the 1800s, fighting poverty during the Great Depression, or bailing out private corporations deemed "too big to fail" in the twenty-first century, America's tendency to borrow from the future is a core ethic of American society. In the post—market meltdown economy, Inflated explores the rich history of living beyond one's means, and whether Americans—an instinctively self-reliant, isolationist people—are more likely either to embrace fiscal stringency if other nations demand it or turn their backs on the rest of the world.

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Product Details

• Hardcover: 393 pages
• Publisher: Wiley; 1 edition (December 7, 2010)
• Language: English
• ISBN-10: 0470875143
• ISBN-13: 978-0470875148
• Product Dimensions: 6.3 x 1.3 x 9.3 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (22 customer reviews)
• Amazon Best Sellers Rank: #351,787 in Books (See Top 100 in Books)
  • #86 in Books > Business & Investing > Economics > Public Finance

Most Helpful Customer Reviews

56 of 57 people found the following review helpful

5.0 out of 5 stars A Must Read! December 8, 2010

By Brandon G. Adams

Format:Hardcover|Amazon Verified Purchase

I've read an insane number of books on the current economic crisis (I was Michael Lewis' research assistant for The Big Short) and this is one of the few that I would put in the "must read" category.

Very few of the recent published books on the US economic crisis have an adequate historical perspective. In Inflated, Chris gives us a very full history -- he starts at the founding of the Republic! The book is nonetheless extremely entertaining. I found myself captivated by it, and finished it fairly quickly.

Chris is an endearing narrator who is obviously more detail-oriented than many of his fellow commentators -- he clearly brings a high level of understanding to this work.

The book is very much of the Austrian School. I don't fully agree with some of Chris' views -- I think I'm generally more tolerant of inflation and inflation risk than he is.

Chris is quite pessimistic about the long future of the American economy, but I think I'm more pessimistic. He believes that austerity measures are required in the US and that the US will be able to weather these austerity measures fairly well socially and politically. I believe that the US cannot deal with austerity measures socially or politically -- therefore, they will not occur. The consequences of a lack of austerity are anyone's guess. Chris believes that high rates of inflation are inevitable without austerity -- I think high inflation and declining living standards are likely but not inevitable.

I find Chris overall views on debt and inflation quite similar to those of Peter Warburton, author of the truly incredible book, Debt and Delusion. The views of both of these authors are wholly different than the New Keynesian thinking of Ben Bernanke. I tend to slightly favor the Warburton/Whalen side of the debate.

Brandon

72 of 76 people found the following review helpful

5.0 out of 5 stars A Brilliant One Stop Shop Read Through Financial History November 22, 2010

By Lawrence G. Mcdonald

Format:Hardcover

I first noticed the brains and talent in R. Christopher Whalen in 2007. I was a trader at Lehman and every time I saw Chris on CNBC I was blown away by his straight forward common sense approach to the inner workings of the world of modern finance. Chris called many ills of the financial crisis over a year before they happened. He's made me a lot of money on more than one occasion. His book is much like his personality and intellect. He traces the deep roots of our financial system soiled years ago and brings them right into the 21st century. The book is a MUST read for anyone in finance or someone who wants to learn how we got here. I really like the way the book ties together a behind the scenes look in Washington and Wall St. The book should be required reading for every Federal Reserve board governor as well, lets learn from history instead of repeating it.

Buy "Inflated" it's a great read.

Lawrence G. McDonald

New York Times Best Selling Author of "A Colossal Failure of Common Sense - The Inside Story of the Collapse of Lehman Brothers"

27 of 34 people found the following review helpful

2.0 out of 5 stars Largely Disappointing December 19, 2010

By Dan Thibeault

Format:Hardcover|Amazon Verified Purchase

I have followed Whalen in the media and at conferences over the past two years. I found him to be insightful but more importantly highly objective and independently minded. This did not come through in his book. The second half read slightly better than the first but the first came off as an inconsistent recitation of facts. The booked lacked first-hand thought which can be seen in the sheer number of footnotes, but what's worse, the few opinions he provided often didn't relate to his area of expertise (Lincoln's sole motivation was unity). I believe a number of statements were not properly researched as well, as was the case with his contention that FDR could not bring himself to raise taxes, while in fact the top income tax bracket was raised three times from 1932 to 1940 (going from 25% to 81%). I still believe Whalen is an outstanding analyst, just not a good author.