27 JULY 2010

The similarities between the Roman Empire and America today are fascinating to me. There was a great article recently that discussed this connection and I’d like to comment on some of the points made in it. You can read the article here.

First, the article starts off with an important question:

When do you suppose the citizens of imperial Rome first realized that their way of life had tipped into inexorable decline?

It’s important question because I would submit that we should ask the same thing of us today here in America. For more evidence on WHY we should be asking this question, read the following article entitledhow to tell if you’re in a depression. I would suggest that most Americans are in denial about the direction of America. As I’ve discussed many times, there is a rebalancing that is starting that will be unavoidable. Standard of livings have to decline in America. We’ll do what we can to fight it, but it will be futile.

The author of the source article compares America to Rome in the following way:

A few foresaw the impact of Caesar’s usurpation of the rule of law, marking his ascension as the beginning of the end. Many more sounded the alarm when Rome’s fiscal balance spiraled out of control, debts multiplying faster than the ability to extract taxes from a dwindling base of productive citizens. The plebeian masses, accustomed to bread and circuses, were probably oblivious until Rome was finally sacked. Everything was fine yesterday, how did these barbarians arrive at our gates? A strange sign of the times has begun traversing America’s rural byways. The sole purpose of this giant machine is to grind up paved roads leaving behind a trail of chopped asphalt and gravel. Strapped county administrators are throwing in the towel, unable to maintain their road systems absent the flow of largess cut off from near bankrupt state and federal agencies. Instead of reducing their carbon footprint by driving ecologically friendly electric cars these people will soon be riding horses. The Sierra Club must be thrilled. Large parts of Detroit are returning to the wild as abandoned sections of the city succumb to bulldozers. Homes whose purchases were made possible by an unsustainable conflux of bloated union wages, liar’s loan mortgages, and easy Federal money are disappearing faster than Barney Frank can say “roll the dice.” The response to these signs of decline? Our own aspiring Caesar and his phalanx of facilitators promise more, not less. Free healthcare for all! Free cash for not working! Buy a car, buy a house, get a check! Bottomless subsidies are being shoveled at environmental impresarios promising to save us from invisible gas by covering the land with windmills and algae farms. Court economists scream that things will keep getting worse unless we tax, borrow, and spend our way back to prosperity.

Whether you buy in to the connection here or not, you have to admit, we’re living in very, very interesting times for Americans. A time where economic expansion has clearly peaked a few years ago at the height of the expansion of the credit bubble. Contraction is mandatory, whether its in the form of deleveraging, bulldozing Detroit, or closing of thousands of retail centers & malls. Side note: A mall near me which isn’t the nicest mall, but is by no means a dump, has turned into a disaster. Probably 20% of the stores are vacant, and the shopping mall now has a tattoo parlor and a “We Buy Gold” store — hardly world class tenants. The mall will go under in the near future.

As we mentioned in previous post entitled the US is collapsing, but who cares because Lebron James is going to Miami, arguably the biggest problem is the ignorant masses who have their heads in the sand or are too busy worshiping celebrities. The author agrees, saying:

What will it take to make most people realize that the grand American experiment is tottering on the brink? The destruction of their life savings? The nationalization of vast industries? The high seas teaming with pirates? A humiliating military defeat at the hands of primitives in a far off land? A society that consumes more than it produces, rewarding the former and punishing the latter, is not sustainable. A society that feels entitled to the good life without understanding where it comes from is delusional, rendering itself incapable of solving problems.

Thoughts?