Book Review: TRUMPED!: A Nation on the Brink of Ruin… And How to Bring It Back – David A. Stockman


David Stockman’s latest book, TRUMPED!: A Nation on the Brink of Ruin… And How to Bring It, is an excellent analysis of the US ruined economy. I was very much impressed by his first book, The Great Deformation, and his new book is just as good. If you want to understand what is wrong with the US, you should definitely read both books.

Despite the title of the book David Stockman is no supporter of Donald Trump. He says that “Donald Trump’s solutions have been largely rhetorical, inchoate and often far too bellicose”. However, Stockman believes that the rise of Donald Trump and also Bernie Sanders “reaches deep into a ruined national economy that has morphed into rank casino capitalism under the misguided policies and faithless rule of the Washington and Wall Street elites”.

I became bullish on gold around 2004 after reading an article in The Economist about global debt. I realized then how big the problem is in United States but also globally. David Stockman says that the US economy is now stuck to the ditch because it has leveraged itself to the hilt over the past thirty years. Since 1971, end of Bretton Woods and the redeemability of the dollar in gold, total public and private debt outstanding soared by 40 times. In contrast nominal GDP expanded only by 16 times.


Stockman also documents how the standard of living of Americans has been decreasing since the collapse of Bretton Woods in 1971. In constant dollar the median household income, based on an accurate measure of inflation, is down 21% since the turn of the century. According to Stockman “working Middle America has never before had such a deep and sustained setback—even during the Great Depression”.


TRUMPED! A Nation on the Brink of Ruin… And How to Bring It Back is also a strong but I think accurate critique of the so called “American exceptionalism” and this desire to intervene militarily all over the world. It is also an attack on the US “war machine”. Both in The Great Deformation and in Trumped! Stockman argues against the expansion of NATO that has revived the Cold War. NATO was an excellent institution in my view but custom made for the after the second world war period when Western Europe was ruined and left without any defense against the new treat from the Soviet Union. With the collapse of the Soviet Union NATO lost its purpose and should have been dismantled. Stockman documents the extension of NATO that forced Russia to react. He reminds us that “it is Washington, not the Europeans, who insisted on the pointless expansion of NATO. And it was Washington that betrayed George H. W. Bush’s sensible promise to Gorbachev in 1989 that in return for his acquiescence to the reunification of Germany, NATO would “not be expanded by a single inch.””


Having lived behind the Iron Curtain during half of the Cold War during my childhood, and the other half of the Cold War in Western Europe and North America during my adolescence I always believed the Soviet Union collapsed under its own weight and was not defeated by the US as many Reaganites pretend. David Stockman arrived at the same conclusion and first explained it in The Great Deformation and covers it again in Trumped!

Stockman doesn’t mention much gold in this book but he says that “Had China’s currency been linked to gold in 1994, the dollar’s exchange rate against the renminbi would have collapsed long ago. America’s ability to live beyond its means for decades by swapping Treasury debt for Chinese exports would have been stopped dead in its tracks.” He does mention however that in violation of the laws of sound money (gold) the US has accumulated an enormous debt by the abandonment of the dollar’s convertibility to a fixed weight of gold in August 1971.


By pegging their currencies not to a fixed standard like gold, but to the massive emission of floating dollars, Stockman says East Asians and petro-states appeared to become prodigious capital exporters and “savers”. That’s because in order to keep their currencies from soaring against depreciating dollars and euros, their central banks accumulated huge amounts of US Treasuries and euro debt in the process of chronic, heavy-handed intervention in the foreign-exchange markets.

Stockman in Trumped! dispels any illusion that Donald Trump offers any resemblance of a remedy to America’s problems but he sees Donald Trump’s role “to merely disrupt and paralyze the status quo.”

He shows in Trumped! how more than three decades of financial and political policy, created in the depths of the Washington-Wall Street alliance, has taken the US to a disastrous precipice. He says that at the heart of this problem is the Federal Reserve and also global central banks. Every dollar of growth in the Fed’s balance sheet is another dollar of fiat credit conjured from thin air and injected into the financial system.

There is a lot more in Trumped! and like in The Great Deformation backed by a lot of data and detail so I highly recommend you reading both books for a better understanding of the US troubled economy and its impact on the world.