Book Review: Hoodwinked

Perkins, John.  “Hoodwinked.”  Broadway Books, NY, 2009

If I could recommend a book that provides a good description of The Financialization Revolution and (bonus!) offers viable solutions, it would be John Perkins’ “Hoodwinked.”

I was somewhat familiar with Mr. Perkins work since “Confessions of an Economic hoodwinkedHitman” was required reading for one of my post-grad classes.   His writing style makes it easy for a reader to understand complex economic issues.  And he isn’t as sharp as say, Matt Taibbi, which makes Mr. Perkins a great read for neophyte liberals or  a conservative who might be open to new information.

This particular work is divided into two sections:  The first of which describes in his own terms The Financialization Revolution – he uses the verbiage “mutant form of capitalism”.  The second portion provides some tools for us to utilize as we strive to stop the Revolution and bring our nation back to a healthy economy.

Mr. Perkins understands that the key characteristic of The Financialization Revolution is the change in the way corporations make their money and he gives a clear description of this new behavior:

  • “In the 1990’s, Jack Welch of General Electric shifted the company’s emphasis from manufacturing  to financial services.” (81)
  • “Financial vehicles -paper transactions – replaced manufactured goods as the prime economic movers.” (131)

The problem is this kind of paper pushing economy makes for unsustainable growth by creating bubbles and increasing debt – at the household and national level. Mr. Perkins is clear about the effects of paper transactions on our nation and presents two important issues: First, modern corporations have a short term thinking paradigm in which they work that concentrates solely on profits.  Second, this short term thinking fails to account for the real costs of Financialization, what Mr. Perkins calls the “triple bottom line,” many of which are environmental and take decades to amend.

The “mutant form of capitalism” that currently pervades world economic systems also affects our military spending as Mr. Perkins points out:

  • “Sixty percent of our 2003 GDP growth rate was in military spending” (119)
  • “Military spending…is one more example of how politicians who claim to oppose big government, taxation, and government spending manage to funnel record amounts of government money away from health, education, and other ‘people’ programs and into the pockets of military contractors.” (122)

We are being ‘Hoodwinked’ into thinking our leaders want smaller government and less spending.  Yet, those same politicians feed the largest government venture on the planet. Mr. Perkins is clear that investments in the military provide little return for the general population (such investments provide a big return for a few however, as noted here).

I appreciated Mr. Perkins attention to military spending as part of The Financialization Revolution, it is an important detail that many others fail to mention.   I appreciated even more that he dedicated nearly half of this publication to plausible solutions for our predicament.

Mr. Perkins focuses on a couple of ways in which we can make a difference but first he admonishes us as consumers to wake up and stop enabling corporations:

During the past four decades, we the people have sent a strong message of support to the modern equivalent of robber barons. We have let the executives know that we want them to provide us with inexpensive goods and high rates of return on our stocks.  We have rewarded those CEO’s who maximized profits regardless of the costs.  Is that what we really want? (183 – emphasis mine)

Once we admit our own contribution to the problem, Mr. Perkins calls us to action. He provides a good history of instances where citizens fought against corporations or governments and succeeded in making a change.  He is insistent that effective measures can curb The Financialization Revolution, but we must make the stand as citizens in order to realize those adjustments.   He gives hope with stories from China and even our own nation, whose young graduates are taking the reigns and leading the way for strong economies based upon green innovation and more evenly distributed resources.

We’ve been “Hoodwinked” by corporations.  Instead of actually making things, they have turned to paper transactions that encourage bubble economics and create inherently unstable economic systems.  Furthermore, we have enabled them with our penchant for consumerism.  This ‘mutant form of capitalism’ can be turned around and Mr. Perkins offers real solutions for focus:

  1. Accepting consumer responsibility.
  2. Creating a new economy.
  3. Adopting attitudes that encourage good stewardship and make icons of a new type of hero.
  4. Implementing new rules for business and government.
  5. Honoring our individual passion. (161)

There is no doubt that we live in a changed world where corporations run the process and earn their profits through Wall Street instead of actual production.  As consumers, particularly US consumers, we’ve enabled the monster and must admit this as a first step to taming the beast.   Then we can effect change by getting involved.  Mr. Perkins beautifully notes that there are plenty of opportunities waiting for us.

If you want a decent read that describes The Financialization Revolution, I would recommend Mr. Perkins’ “Hoodwinked.”   Not only does he address our ‘mutant form of capitalism’ in a concise manner, he offers hope for change in the form of action and testimony from others – challenging us in the process to join the march and own part of the change ourselves.  Let’s accept the challenge kids, our future depends upon it like never before.

Yours, Frankie

I invite you to visit Mr. Perkins webpage here, he is intent on leaving behind a better world for our children.

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About Frankie Wallace

Frankie earned her BA in History from CSU Chico. She lives in northern California with one husband, two dogs, and three boys. Frankie is an avid cooker, reader, hiker, and napper.
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