A World of Wealth, by Thomas G. Donlan (Hardcover, 2008)|
(You can print this review in landscape mode, if you
want a hardcopy)
Mark Lamendola, author of over 6,000 articles.
If you realize that money doesn't grow on trees,
you also realize that every dime spent by the federal government is a
tax one way or another. With that fact in mind, you can look at the
nation's $9.4 trillion federal tax burden and realize that Tax
Freedom Day never arrives for the vast majority of Americans.
So it's reasonable to wonder why the proposals of
the leading candidates in the 2008 Presidential "election" to
dig our financial hole even deeper don't automatically disqualify them
from any job that entails responsibility. Providing a glimmer of hope
against this backdrop of madness is Thomas G. Donlan's common-sense analysis of
the effects of making capitalism part of public
Let me clarify here that Donlan was not writing
about the 2008 Presidential election (such that it is), nor did he voice
his views on any of the candidates. I interjected the election (such
that it is) into my review as a point of reference.
The book has a few errors of fact, none of which
bear on any of its central points. For example, Donlan talks about
"printing money." Those cotton fiber Federal Reserve Notes make up such
a small percentage of our total money supply that all of them together
amount to not much more than a rounding error. I hope in a future
revision he updates the language because "printing money" is a code
phrase among people who don't understand how a currency works and who
propose regulating the value of the dollar instead of letting the market
do that. I was pleased to see Donlan didn't fall into that line of
Perhaps overdoing things, Donlan proposes the
market as the cure to nearly every social ill. This is the classic
Libertarian Party line, which is mostly right but which oversimplifies
in some cases. Having studied economics at the graduate level, I have
some inkling of what those cases are, but I don't claim
authoritative knowledge. Since we are a very, very long way from a "Free
minds and free markets" system, there's no immediate threat that we
will have too much freedom in this country or too much reliance on the marketplace.
One reason Donlan's position carries so much
weight is the track record of the statists (the opposing camp) is horrendous. It's
marred by enormous losses of property, life, and liberty. It's littered
with social strife, wars, hardship, and heartbreak on top of ignorance,
inconveniences, and a constant stream of petty annoyances. It's loaded
with waste, corruption, fraud, and a long list of negatives that market
forces could mitigate or even prevent. While a completely Libertarian
system would probably not be ideal, it would be a far sight better than
what we endure today.
Even a tepid ala carte adoption of Donlan's
recommendations would confer enormous benefits on society. Just as
gradual deterioration brought us to where we are, so can gradual
(or incremental) improvement bring us to where we want to be. My point
here is it's not necessary to agree with everything Donlan says or
recommends to accept the general thrust of what he's saying or to
validate anything he says. Each of his major points stands on its own
merits, and usually in a very solid way.
A World of Wealth isn't a scholarly work,
and Donlan doesn't pretend it is. He says upfront that he has "issued
commentary and marginalia." Donlan has been immersed in this subject for
decades, and has established some credentials reflecting that fact.
He's well-known and highly respected among people who read the current literature on
economics, business, and politics. Pundits seek his opinions.
Donlan reads more than just those books and
periodicals that support his worldview. As a matter of fact, he even
lists The New York Times in his "Reading Further" list. That is
quite remarkable when you consider that the NYT consistently pushes the
statist agenda, completely in conflict with Donlan's views. Because the
NYT pushes a failed philosophy, its writers and editors must rely on selective
fact picking and other deficiencies in reporting to make things sound
plausible. That is, they write with the purpose of justifying their
preconceived views and so filter out information that doesn't conform.
To their particular choir, the music sounds sweet. To independent
thinkers, it's laughable.
In some circles, the NYT is known as the NYP, the "P"
standing for "Pravda." Essentially, if you want to brainwash yourself
into embracing excess government as the solution instead of the problem, you would want to read the NYT every day.
This is why, for example, so many people who want to present the Save
the Criminals movement as actually sane look to the NYT for exactly the
disinformation they need.
From this, we can see that Donlan does expose himself to
various viewpoints and he isn't afraid to recommend that other people do
A World of Wealth isn't footnoted or
backnoted. It lists no references, other than those mentioned in
context. There isn't a bibliography. The book is Donlan's take on things
after years of reading, writing, and speaking on the subjects it covers.
A World of Wealth consists of 11 Chapters.
Perhaps it shows some humor on Donlan's part to have Chapter 11 as the
final chapter in a book about money. A World of Wealth also has
an insightful, thoughtfully written introduction and a topical index.
Chapter 1 brings us directly into the "Energy
Crisis," a misnomer that Donlan recognized as such by his inclusion of
it in quotation marks. Ill-conceived government "energy policies"
have invariably caused enormous harm with no upside, and yet the federal government persists on inflicting us
with one bad policy after another. Dolan presents solutions that, when
given brief life between the end of one bad energy policy and the
beginning of the next, have produced solid results. Similar solutions in
other areas just plain work.
In Chapter 2, Donlan proposes market solutions for
pollution and related ills. Here is where theory and reality have a hard
time remaining convergent. Market forces cannot do the job by
themselves, because it's too easy to bypass the market. Dolan hints at
this with his discussion of commons (if you follow economics, you know
what this means), but seems to overlook that in many cases the commons
effect either weakens market forces or neutralizes them entirely. So in
this area, I disagree with Donlan and believe the government could
actually do something useful. The fact that the government often fails
in this regard, and sometimes dramatically, is a problem. But that
doesn't mean the market is the sole solution.
Donlan talks about free trade in Chapter 3, and he
makes a great deal of sense. But he overlooks some key factors that
render his conclusions incorrect. The problem with free trade is similar
to that with pollution. The market can't account for everything.
For example, the EPA does not regulate in Mexico
so Mexican factories have a huge cost advantage. The air pollution from
Mexican factories, by the way, wafts right over to the USA. Mexican
factories can turn their cost advantage into lower prices at market. We can't
force Mexico to adopt American regulations (remove the cost advantage),
but we can levy a tariff (remove the price advantage). The same is true
of Canada. Drive through Sarnia, Ontario sometime and look at how the pollution
just blows across the river to the American side.
Ross Perot was right, though Donlan doesn't see
this. That huge sucking sound was American jobs, contrary to
Donlan's unsubstantiated assertions to the contrary. The problem is
Donlan left out key facts. Those jobs
were not replaced due to comparative advantage with better jobs. Or any
jobs at all. The US federal government legislated those jobs into
fleeing the country. Forever.
Comparing factories in one country with those in
another and ignoring the difference in regulatory costs is the classic
apples to oranges comparison. I was surprised that Donlan didn't account
for the primary driver of American job loss: those folks in Congress who
make several times the average wage and don't care about the costs of
their endless stream of idiotic regulations. Apparently, they see
nothing wrong with vaporizing a few million jobs if doing so means their
actual employers, the lobbyists, will be able to make a few extra bucks.
Trade will never be truly free as long as nations
are operating under different rules. And they always do. The solution we
have is to levy tariffs. The solution we need is to decrease regulation.
As an example of regulation run amok with outsized
costs added to consequences the opposite of what was intended, consider
the EPA. Congress and the EPA have taken sensible pollution controls too far,
driving industry into countries with no pollution regulations. The net
effect is a dramatic increase of pollution. Giving those
countries the bonus of a cost advantage in our markets and thus
punishing law-abiding citizens and corporations is not a solution.
The current mania over immigrants defies logic.
Donlan adroitly addresses the truth of the matter in Chapter 4. In
Chapter 5, he explains how investment and productivity are related and
how these lead to higher wages for even those at the lowest levels. A
classic example is what Henry Ford did, which at the time permitted factory pay
far above what any competitors could offer. If you understand why
Donlan's points in Chapter 5
are true, you'll be well-prepared for what he says in Chapter 6 about
the Capitalist take on taxes. I personally can find nothing wrong with
what he says, or nothing right with current tax policy in the USA.
While Donlan speaks much truth in Chapter 7 when
he talks about regulatory harm in finance markets, he also overlooks
where regulation helps and what its proper role is or should be. He
seems one-sided, here. His remarks about health care in Chapter 8 are
similar in that way. The problem, as I see it, is the regulation process
is politicized and thus guided by the wrong things. It could be my own
views that are narrow, as an unpoliticized regulatory process is perhaps
an oxymoron. Donlan's remarks in these two chapters provide plenty of
food for thought and for lively conversation with informed, thinking
Chapter 9 takes on the disgraceful federal
"retirement" programs cooked up by a Congress that apparently can't
understand basic mathematics. I personally refer to these schemes as
Antisocial Insecurity and MediFraud. But Donlan is above such
inflammatory (though accurate) language and simply analyzes these "failed from Day One"
programs on their merits (or lack thereof). He also presents actual
solutions based on reality, a concept the US Congress is obviously
Don't read Chapter 10 right after a meal. Its
title is "A Capitalist Look at the Current Economy." It aint pretty. But
it is highly informative.
The final chapter basically reviews capitalist
theory. For the most part, putting this theory into practice provides a
positive outcome. It certainly would work wonders if applied to our
Today, leading politicians are proposing more of
the same old bad public policy. Einstein defined insanity as doing more
of what's not working. Are any of our leading politicians sane? Why do
we put up with that?
One of the most easily measured acts of insanity
is the profligate spending. You will find this nicely
detailed in reports produced by the National Taxpayers Union. Since
World War II, we've paid for much of that insane spending with currency
debasement, which is a coward's way of taxing us. And what a hefty tax
it is. The dollar has lost 95% of its value since World War II.
More strikingly (not mentioned by Dolan), it has
lost half of its value in the last ten years alone. If you're not in the
habit of emptying your home of half your possessions every ten years and
asking your boss to cut your pay in half every ten years, do you think
Congress should be allowed to do that very thing to you? It can, and it
The mudstream media, which seem to have a ban on
accurate reporting, are pretending our only choices are different
flavors of the same old stupidity, theft, and carnage. This is clearly not true. Donlan
shows that other choices do exist. Thus, readers of this book are
informed rather than disinformed.
If you have to work to pay for your food and the
roof over your head, then consider this book essential reading. Consider
signing a copy and dropping it off in person at the office of your