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An Aging, Bankrupt Empire by Doug French Recently by Doug French: MF Global's Fractional Reserves
The U.S. government has created borders within the country’s borders at every airport in the country. Technologies abound in ticketing and check-in on one side of the border while commerce thrives on the other. In between is a massive government apparatus requiring that shoes be kicked off, laptops be unpacked, and less than 3.1 ounces of liquid be carried in any one container. The only technology in sight is the offensive porno scanners. And for those that refuse scanning, a brutish pat-down is administered. These Transportation Security Agency (TSA) borders are guarded by 58,401 bureaucrats in blue, at a cost this year of $8.1 billion. The taxpayers must not spare any expense in convincing themselves that the government is making us safe. The arbitrariness of rules at borders is brought to mind in the opening pages of Charles Goyette’s sobering new book Red and Blue and Broke All Over: Restoring America’s Free Economy. Viewing borders from the air, one can hardly tell where they are, these imaginary lines drawn by governments. However, while the terrain on either side of a border may be identical, satellite imagining provides a stark contrast of neighboring countries where capitalism operates on one side of a border while socialism reigns on the other. The native culture and language may be identical, but roads that are paved on the capitalist side, turn to dirt on the socialist side. While lights burn brightly in the capitalist night, those living under socialism are shrouded in darkness.
Within its borders, America once provided an example to the world of what free markets and sound money can provide. But as Goyette painstaking points out, those days are over. Today’s America is but an aging bankrupt empire. Not so different than the last days of Rome. Its armies spread thin throughout the world. Its treasure wasted long ago, government finances are in shambles, and it can only pay its promises with money it creates from nowhere. While Republicans and Democrats bicker on Capitol Hill, each party is equally to blame. The various cable news networks root for one side or the other without realizing "that both parties worship in the same statist church and share obedience to the same economic priesthood." In Red and Blue and Broke All Over, Goyette writes in the same dry and witty style that made his previous book, The Dollar Meltdown, a bestseller. In the book’s first of three parts, the author examines the state of freedom in America. It’s not a pretty picture. Once upon a time, America had no income tax, no federal reserve, no endless list of regulatory agencies, and no involvement in foreign wars. Now we have all of that and much, much more. The average American doesn’t know what a free market looks like. "Keep the Government out of my Medicare!" read signs at 2010 Tea Party rallies. While Americans collectively spend 6.6 to 7.5 billion unpaid hours a year complying with the taxman, the government sends out 88 million checks each month. Forty-six million Americans depend on taxpayers to buy their groceries.
We hear plenty about the glories of the U.S. Constitution this campaign season, always to great cheers from hopped-up campaign workers. But the millions of square feet of Washington D.C. office space aren’t needed because congress is following that sacred document, but just the opposite.
Red and Blue’s Rothbardian author sees the state for what it is – the enemy of prosperity. Those on Capitol Hill honestly believe they can centrally plan our economy, at the same time lawmakers like Rep. John Conyers can’t figure out why the Senate Hair Care Services (Senate barber shop) requires $300,000 in taxpayer subsidy to keep open, while the privately-owned House barber shop turns a profit and offers its members cheaper haircuts. Goyette has the guts to use the F-word while describing the U.S. economic system – fascism. Most wavers of the red, white and blue can’t bring themselves to understand that capitalism isn’t what’s operating in America. The author looks to John T. Flynn’s As We Go Marching to describe an American economy with business carried out by private owners but under the direction of government. What spews forth from this sort of system is the Goldman Sachs to Treasury Department pipeline that Goyette terms "The Wormhole Express." Anyone who questions how Goldman is so blatantly propped up and bailed out, must only see how many of the firm’s alumni are working in government. An especially interesting part of Red and Blue is the author’s look at The Brothers Karamazov, Brave New World, and 1984 and the modern manifestations of the literary archetypes created by those three authors. Goyette shows that life has certainly imitated art. Goyette quotes investment legend Jim Rogers. "There is nothing like crossing outlaying borders for gaining insight into a country." And while Rogers was writing about third world countries in Adventure Capitalist, Americans should travel overseas and notice how easy entry into many countries is, compared to America.
From landing to calling a cab takes no time most everywhere – except the land of the free and home of the brave. Visitors to America are fingerprinted and digitally photographed on the way in. U.S. Immigration and Customs is an ordeal that takes a couple hours if everything goes right. And the process will get more cumbersome. According to the Department of Homeland Security, "At a date to be announced in the future, all travelers who provide biometrics when entering the United States will be required to provide biometrics when departing the United States."
What has kept the American empire in operation has been the dollar’s reserve currency status. Once backed by gold, the dollar is now but a flimsy promise. A promise taken seriously by those who remember America as it once was, not what it is today. America is bankrupt, Social Security is a Ponzi scheme and the country’s financial situation worsens each day. The author points out that the Federal Reserve’s holdings of Treasury debt increased from $777 billion to $1.6 trillion in a year’s time. America owes more to its own central bank than it does China and Japan. This should be the very definition of a banana republic. We use the debauched dollar because we have to by law – legal tender laws. Drug dealers, who are not quite as respectful to the authorities, would rather take bottles of Tide in trade. Foreigners will follow suit, increasingly looking for alternative currencies. Goyette provides no political solutions in Red and Blue, but instead calls for individuals to do something quite foreign to them – embrace freedom. "The state must just stop," Goyette repeats. "The state must STOP."
March 29, 2012 Doug French [send him mail] is president of the Ludwig von Mises Institute and the author of Early Speculative Bubbles & Increases in the Money Supply. He received the Murray N. Rothbard Award from the Center for Libertarian Studies. See his tribute to Murray Rothbard. Copyright © 2012 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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