Although the title, Red and Blue and Broke All Over, suggests that the book is another expose of America’s dire financial state of affairs, that is not the case. Red and Blue inextricably links our prosperity to our liberties and warns that if “solutions” to our existing financial woes and the “War on Terrorism” put still more controls on us, our prosperity will decline as our liberties vanish.
Readers will also be delighted to know that Red and Blue is an enlightening read in a casual style that makes them forget that they’re reading a book about economics and libertarian philosophy. That is no small feat in itself, but the author, Charles Goyette, pulls it off by continually discussing current affairs with which readers are familiar and putting those affairs in context with the issue of liberty. For example, fascism and crony capitalism.
Fascism, of course, is an economic philosophy that lets a nation’s means of production remain in private hands while the goods are sold and distributed as the State dictates. While some may think that powerful Corporate America would never allow for that here, we have fascism’s first cousin, and it’s called crony capitalism, whereby government “leaders” bestow financial and monopolistic favors on businesses in exchange for political support.
An excellent example of corporate cronyism was the Obama administration’s washing out the old General Motors shareholders and bondholders and issuing new stock with the proceeds going to fund a “new” General Motors. GM management remained in place, and the pension obligations of the GM workers were recognized. In the GM bailout, management and workers (UAW member and Obama supporters) benefited, but the old GM shareholders and bondholders were set adrift.
Goyette notes the revolving door between the White House, regardless of which party controls it, and Wall Street, especially Goldman Sachs. Although Goyette details only a few of the Wall Street powerful who go south to Washington for a few years to “serve,” the names are familiar to anyone half following today’s business and political news. After going south, they return to Wall Street to reap millions, nay billions, because the contacts made while “serving the people.”
Goyette is not optimistic about America’s financial state of affairs. “The choice before us now,’ he writes, “has only to do with management of the state’s default.” Will there be an official, outright default where the government simply says, “We’re not paying,” or will the default come via debasement of the dollar until it is completely worthless?
This position is consistent with the great Ludwig von Mises’ observation about credit-induced booms: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
It is obvious that no “voluntary abandonment of further credit expansion,” which has been in place since even before Nixon closed the gold window in 1971, is going to end. Just the opposite appears to be on the horizon with calls for more quantitative easing growing louder with every dismal economic report. It is almost guaranteed that the continued printing of still more fiat dollars will follow the historical precedent of printing until the dollar is worthless.
Goyette will not make many friends in political circles for he shreds Democrats and Republicans alike, citing example after example of how both parties have tightened the noose of tyranny in their misguided efforts to protect us against terrorism and to provide security against our personal foibles. George W. Bush gave us TARP bailouts, and Barrack Obama followed suit with massive spending and more corporate bailouts.
Actually, Goyette may upset more than a few readers when he notes that “If elected officials can be blamed for their contempt for the Constitution, and if the media can be blamed for its indifference to the Constitution, what can be said about the fault of the American people? If their indignation is only aroused when the other party is at fault, their defense of their own liberties can only be described as halfhearted.”
It has been said (attributed to Thomas Jefferson, Alexis de Tocqueville and William Shakespeare) that “The people get the government they deserve.” If so, then it is time for the American people to wake up because Red and Blue and Broke All Over warns that we are about to lose our liberties and our prosperity.
While in the midst of a genuine financial crisis, investors often snap up books about how to survive the crisis or how to profit from it. Indeed, Goyette’s The Dollar Meltdown became a New York Times bestseller. While The Dollar Meltdown is an insightful book, Red and Blue and Broke All Over delivers a more important message: our liberties and our prosperity are going down the drain if we do not turn back the march toward total state control of our lives.