NEW YORK, February 25, 2013 - Beware the Ides of March.
The final weeks of winter and first week of spring are particularly dangerous for Empires stretched thin.
Like the United States, the Roman Empire was once exceptional. Today, Italy is a minor, scandal plagued country in decline, about to be led by a coalition including a rising comedian and a fading lothario.
Too much dolce vita is a dangerous thing, not to mention the shocking moral decay of the Vatican now rushing onto front pages as Italians continue to pay a heavy price, their storied nation descends ever deeper into economic doom.
We Americans think we have ample time left to grow ourselves out of this mess, maybe even painlessly. We just spent one more weekend in distraction: Saturday and Sunday, the roaring drama at Daytona; last night, the Oscar pageant crowned by a curtain call featuring our First Lady.
Ancient Rome has much to tell modern America.
Centuries ago, Juvenal described how public apathy and sloth set Rome on the road to ruin:
“Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses.”
Americans are far more expert today concerning sports and entertainment trivia than are conversant with rigid, economic truths. Who needs hard work when entering into a painless political compact of financial dependence funds basic needs with little apparent “cost”?
Government dollars gushing into the economy since 2008 only seem strong because alternative fiat currencies are even weaker.
The sad truth is that all major currencies have eroded in value compared to key inputs such as petroleum and other commodities and to stores of value such as gold and other precious metals.
America and our western allies are “hanging together” in a mutual “beggar thy neighbor” devaluation policy, which is destroying a vast pile of accumulated wealth to arrest decline in a much smaller level of economic output.
At the start of his famed career, Alan Greenspan saw the folly in this practice of “economic futilism”:
“The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”
At a time when wealth seeks a safe home, we in America are determined to chase it to far-flung reaches of the globe. Modern leaders steadfastly reject lessons etched in history. Instead, they have merged the financial circus based in New York City with the political circus roaring in Washington, D.C.
When America finally shakes off the glitter and the indigestion of this latest weekend, more and more of us will reach the inescapable conclusion—that Republican Thelma and Democrat Louise will carry on wasting borrowed funds until enough of us simply will not take it anymore.
This week as the ladies tear up asphalt accelerating over the cliff, we will see our elected representatives managing this country’s finances the way no healthy household can.
Democrats believe they will savage heartless Republicans for insisting upon sequester cuts that are a paltry 2.5% of a soaring Federal Budget.
Only a few Republicans will dare to stand ground that might be readily defended by the wider public once they appreciate the waste and the incompetence that are centerpieces of America’s crusade into the economic wilderness, under both parties, since 1999.
All of us inside America are moving slowly towards a national bankruptcy that could arrive as suddenly as Hurricane Sandy but with even more horrifying force.
The truth is that shrewd investors everywhere have all the evidence they need to understand just how intractable our economic problems are for the corrupt system that has evolved in modern decades.
Since 1999, Democrats, Republicans and Central Bankers have abandoned the pretense of holding true to their solemn vows. Politicians stay elected by selling false dreams to constituents who sleep through life in economic fantasyland. Central Bankers who should protect America’s massive pile of wealth instead finance the tawdry spectacle using a dollar that has already become as mighty as a gnat.
Thomas Jefferson saw our present condition clearly back in 1782:
“The public money and public liberty, intended to have been deposited with three branches of magistracy, but found inadvertently to be in the hands of one only, will soon be discovered to be sources of wealth and dominion to those who hold them; distinguished too by this tempting circumstance, that they are the instrument, as well as the object of acquisition. With money we will get men, said Caesar, and with men we will get money.”
Adam Smith succinctly explained in 1776 how ludicrous it is to hope that political leaders can restrain spending impulses:
“It is the highest impertinence and presumption …in [kings and ministers], to pretend to watch over the economy of private people , and to restrain their expense…they are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will.”
Americans, as a group the richest large society in history, are hooked on cheap spectacles when we should be hunkering down and forcing the largest part of our economy that has yet to face urgently needed re-structuring to do painful, correct things.
These few words from Thomas Jefferson say so much more than anything we have heard recently from the President, from his allies or from the loyal opposition:
“…banking institutions are more dangerous than standing armies, and…the principle of spending money to be paid by posterity…is but swindling futurity on a large scale…”
On October 21, 2009, Chairman of the National Endowment for the Arts Rocco Landesman compared the President “to the most powerful writer since Julius Caesar”. Such hyperbole is as common in Washington, D.C. as hubris is rare. Still, the President’s increasingly authoritarian behavior invites reasoned comparison.
For those of you who have forgotten your history and your Shakespeare, try this for a quick refresher course concerning Rome in the time of Julius Caesar.
The People are starting to get restless.
Will Americans finally channel growing anger over many government failures into wise actions? Or, will politicians continue their misdirection to forestall the indictments that should come from the court of public opinion and then sweep out the Augean stable that Washington, D.C. and environs has become?
Our rivals and enemies are watching us carefully. Proving our fiscal irresponsibility at home is one thing—simultaneously destroying the financial foundation for a global “Pax Americana” is yet another.
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