I disagree with you Scott. When Saruman arrived in the Shire, he was without his wizardly powers because he had spent them all in his efforts against Rohan, which had failed. To me, Tolkien's concept of the Powers of Arda seems to be that the more they use their powers, the less their inherent strength becomes, especially if their effort ends up being wasted. I believe that Gandalf breaks Saruman's staff as a symbol of the fact that Saruman has squandered his power, and has only his voice left as a tool.
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