Empire of Debt

There has been a recent Garet Garrett sighting in the newly published book, "Empire of Debt," by William Bonner and Addison Wiggin. "Empire" was published in November 2005.

Garrett is quoted on pp. 87-89 of the book. The authors missed a great opportunity by quoting only some anti-war comments of Garrett's. The authors failed to quote the majority of Garrett's work over the decades, much of which focuses on the very same financial issues with which "Empire" deals.

"Empire" touches only lightly on the role of the New Deal in creating an all-powerful government. Garrett's signature work, "People's Pottage" as well as "Salvo's Against the New Deal" provide much greater insight into that era and the New Deal.

"Empire" focuses heavily on World War I. But the authors get sidetracked with discussions of internal European politics and battlefield movements instead of the financial issues. By contrast, Garrett's "Bubble that Broke the World" addresses the WWI loans from the United States that worsened the war and hastened the post-WWI world wide financial crisis.

The authors also became bogged down in a lengthy discussion of Vietnam, Ho Chi Minh, French military tactics and other peripheral issues.

The authors gave the impression of having read a few mainstream books (plus one book of John Flynn) on various topics. The authors then cobbled these works together into a brief history of the world. The authors tried to do too much. The authors' goals might have been better served had the authors stuck to Garrett, Flynn, Will Durant and a few other writers not so strongly influenced by modern thought fashions.

But "Empire of Debt" does have its moments. The authors provide the following quotation on page 290 (writing about financial bubbles and their aftermath):

Generally, the force of a correction is equal and opposite to the trend that precedes it. And the pain it causes is directly propertional to the pleasant deception that went before it.

The authors also write in favor of gold and correctly identify 1971 as the year President Nixon closed the gold window. (But they ignore the numerous anti-gold steps that preceded this action, including the outlawing of private ownership of gold from the New Deal through the middle of the Ford administration). Any author that speaks of gold's history to any extent deserve some credit.

On page 329, the authors say the following:

Gold was around millions of years before the U.S. dollar was invented. It will probably be around a billion years after. This longevity is not in itself a great recommendation. It is like buying a suit that will last longer than you do; there is no point to it. But the reason for gold's longevity is also the reason for its great virtue as money: It is inert; it yields neither to technology nor to vanity.

The authors suffer also from the tendency to try to squeeze every octogonal problem into the round hole labeled "empire." The authors ignore the political reality that has pitted empire builders at home against those who seek to stop them. The authors merely label all policies since 1913 as being products of American "empire."
Garrett provides a much more realistic explanation, labeling Roosevelt's New Deal policies as imperial, while marveling at the naivite of New Deal opponents who warn that "empire" might arrive if we don't stop additional New Deal policies.

Click here for Sue Bob's commentary on "Empire of Debt".

Most importantly, the authors predict dire consequences from the current real estate bubble. These consequences will be compounded by our growing national and individual debt, the lack of manufacturing in the United States and our growing dependence on manufactured goods from China and other foreign countries.



I recommend the final chapter, if for no other reason than it contains warnings and facts regarding the financial situation of the last five years. As for the rest of the book, writings of previous "Cassandras" are more thorough, consistent and enlightening.