Worse yet, the number of bankrupt families was climbing. In the early 1980s, when my partners and I first started collecting data, the number of families annually filing for bankruptcy topped a quarter of a million. True, a recession had hobbled the nations economy and squeezed a lot of families, but as the 1980s wore on and the economy recovered, the number of bankruptcies unexpectedly doubled. Suddenly, there was a lot of talk about how Americans had lost their sense of right and wrong, how people were buying piles of stuff they didnt actually need and then running away when the bills came due.

Click Image to Enlarge Federal Reserve of St. Louis BANKRUPTCIES TAKE OFF: Filings per one thousand Americans took off in the mid-1970s, just after the Nixon administration defaulted on the gold exchange standard that had been set up at Bretton Woods. The age of fiat money had begun and so had the soaring rate of bankruptcy filings.

* * *

Those sentences are from Senator Elizabeth Warrens new memoir, A Fighting Chance. It is full of insights into a brilliant woman. She strikes us as smarter, more earnest, better balanced, and less entitled than Secretary Clinton, against whom some reckon she should make an attempt for the Democratic presidential nomination in 2016. Her book makes us wonder whether at some point she could be enlisted in the long struggle for monetary reform.

The senator understands the future of which her parents dreamed is gone. The game, in her view, is rigged for those who have money and power. She argues that the basic infrastructure such as roads, bridges, and power grids has crumbled. The scientific and medical research that has sparked miraculous cures and inventions from the Internet to nanotechnology is starved for funding, and the research pipeline is shrinking. The optimism that defines us as a people has been beaten and bruised.

What we find so arresting is that Ms. Warren entered the debate through bankruptcy law. Yet she fails to connect it with the event that coincided with the explosion in bankruptcy filings. They began to take off in the mid-1970s. This is plain to see in the chart nearby, courtesy of the St. Louis Federal Reserve Bank. For the first half of the century, bankruptcy filings were fewer than one per a thousand Americans. Suddenly, the rate soared, starting in the early- to mid-1970s

What was it that happened then? That was the period in which America closed the gold window at which, under the Bretton Woods system, foreign governments could redeem their dollar reserves in gold. Before then the bankruptcy rate had been steady for generations. Since then, our whole fiber as a nation seems to have been weakened, and the future seemed to evaporate. As we plunged ahead in Senator Warrens book, we kept hoping she would get to this point. The default, after all, took place under a Republican.

Yet the only occasions on which Senator Warren uses the word gold in her book are to describe some tiles in the headquarters of AFL-CIO, the soft gold and pale colors in the Oval Office, and a pin worn by Holly Petraeus, an advocate for protecting GIs from debt problems. The phrases gold standard, monetary reform, fiat money, sound money Bretton Woods fail to appear. The solutions she proposes are regulatory. None is radical.

Could she seize this issue? We keep returning to the year 1971. It wasnt just bankruptcies that began soaring in the mid-1970s. Unemployment also soared after Bretton Woods was lost, a point we marked in the editorial George Soros Two Cents and Yellens Missing Jobs. This ought to be a perfect issue for Senator Warren, who is on the banking committee and before she was a senator helped create an agency, the Consumer Financial Protection Bureau, that is seated within the Federal Reserve. Governor Romney had the issue of monetary reform in his platform, but he failed to run on it. The issue is just lying out there for Elizabeth Warren. Talk about a fighting chance.