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Empire of Debt
by Bill Bonner and Addison Wiggin
John Wiley & Sons © 2006, 370 pages, $27.95 (ISBN 0-471-73902-2).
The Rise of an Epic Financial Crisis
Controversial financial writers Bill Bonner and Addison Wiggin are dumbfounded by the way American politics and the U.S. economy have shifted over the last decade, from a time when “conservatives” believed in economic freedom and fiscal restraint, to today when many conservatives proudly promote unfettered deficit spending and military adventurism. In Empire of Debt, the authors share their amazement by highlighting recent as well as historical changes and providing a wry but witty look at the state of the American “empire” and its slouch toward bankruptcy.
Although many will take issue with their cynical perspective on the United States and its economic future, Bonner and Wiggin see the current state of the American empire as “a comic opera that seems as though it might veer into tragedy at any moment.” In Empire of Debt, they describe the consumers, economists, politicians, investors and businessmen who are the richest people on the planet as “hustlers, clowns, rubes and dumbbells” who rely on the savings of poor people from China “just to pay their bills.” They argue that all of the restraints and modesty of the early days of America have been replaced by “a vainglorious system of conceit, deceit, debt and delusion.”
Empires and Imperialists
The authors take issue with the way America has become an empire, much like the Roman empire, ready to fall due to its corruption and excesses, while revealing its many similarities to other empires. One element of the empire that they point out is the proliferation of imperialists: the people who believe that their culture, society, economy, political system or they are superior to others and have the right to tell other people what to do. In Empire of Debt, the authors warn that an empire “is a monopoly on force. Nature will tolerate it for a while, but sooner or later, the imperial people must revert to being normal people, and the preposterous beliefs that imperial people cherish, also must pass away.”
Everything regresses to its mean, the authors explain, so we can expect that as Asian incomes rise, American incomes will fall. They write that Americans are borrowing and spending at incredible rates, and investing without regard for the lessons and patterns of the past. By looking at the current state of the American economy and pointing out the ebb and flow of boom and bust cycles, they offer some help for determining where in the cycle the country currently may be.
One indication that the United States may be at the top of an imperial cycle is the invasion of Iraq. The authors write that in this endeavor, Americans were delusional to believe that by getting a dictator off the backs of the desert tribes there, they will suddenly “start building shopping malls and the women will all start dressing like Britney Spears.”
‘The Imperial Agenda’
The authors explain that people never choose to have an empire, “it chooses them. Gradually and unconsciously, their thoughts, beliefs and institutions are refashioned to the imperial agenda.” Bonner and Wiggin describe the democracy of the United States as a “delicate flower” that was planted centuries ago by the Founding Fathers and is now being crowded out by “the imperial weed” that has taken over the soil of North America in the 21st century.
Although there is much humor throughout Empire of Debt, its joviality is tempered with numerous charts and lists that depict the excesses and wastefulness of the American system. For example, the authors point out the high costs of “bossing people around” with this statistic: “Federal regulatory costs of $877 billion combined with outlays of $2,292 billion bring the federal government’s share of the economy to some 27 percent.”
Since all empires must eventually pass away by finding a way to destroy themselves, the authors predict that debt will be the source of America’s demise. By examining the “mistakes” of Federal Reserve Board Chairman Alan Greenspan, a growing trade deficit, and the economic growth of China and other countries, Empire of Debt casts a critical eye on America’s confidence and its vulnerable dollar, Treasury bonds, stocks and house prices. By observing many of the indicators that are usually hidden beneath the excesses of an empire, the authors prepare their readers for an inevitable recession, or worse. Their advice? “Buy gold.” ~
Why We Like This Book
Empire of Debt offers readers an iconoclastic yet informative look at the current state of affairs in the United States and compares it to history’s similar times. Through satire and profundity, the authors take a serious look at the difficulties facing the nation today and make sense of them through historical juxtapositions that reveal them in an unusually compelling light. With humor, smarts and a deep respect for the lessons of the past, the authors turn the horrors of debt into a fascinating tome. ~