MONEY OF THE MIND

To Grant, ``money of the mind'' is credit, and here he offers an entertaining as well as instructive chronicle of its near- ruinous emergence in the US. As the author of Bernard M. Baruch (1983) and publisher of a highly regarded newsletter on interest rates, Grant has the scholarly savvy to sift through the complex developments that have shaped American capitalism. He argues, for example, that the speculative excesses of the 1980's represented the culmination of a protracted cycle of increasingly easier credit, not spontaneous phenomena. According to Grant (a sound-money man by conviction), a pair of long-running trends—the democratization of credit and the socialization of risk—converged to create an unprecedented boom during the Reagan years. At the turn of the century, he points out, it was almost impossible for wage earners to borrow; during the past decade, they were invited, even implored, to do so. While US debt spiraled upward in the form of installment loans, junk bonds, mortgages, retail charge accounts, and allied obligations, the federal government accepted greater amounts of the risk (e.g., via deposit insurance) that used to be borne by creditors, an accommodation that Grant dates back to the Progressive Era. With both wit and perception, he lards his narrative with anecdotal accounts of yesteryear's seers and sinners, plus cautionary tales of their latter-day counterparts. In addition to such contemporary celebrities as Michael Milken, David Rockefeller, and Walter Wriston, he profiles less familiar figures from the past—Sewell Avery, George F. Baker, George Champion, James Stillman, et al. A substantive and accessible perspective on how the financial world really works, offering as its moral the unhappy reminder that all pipers eventually must be paid.