America continues to slog through the same path as our Roman ancestors, as it allows institutional forces from within to destroy what forces from without could not destroy
Fraud takes many forms, oftentimes it is disguised and deeply embedded within the cultural, economic or social systems that most take for granted. Other times, fraud is overt, specific and perpetrated by outside forces. The police, our local and federal governments, private investigators, or internal audits target the obvious, non-institutional frauds, whether personal, financial, social or economic.
Examples of these overt frauds are criminal activity, Medicare fraud, insurance fraud, personal infidelity, or the failure of corporate governance. These types of fraud, though, are relatively easy to detect and spot, and are generally correctable given sufficient remedial activity. Institutional fraud, on the other hand, is pervasive and endemic to our society.
History often repeats itself, and from it America can divine its future, or at least one version of that future. A brief history lesson will highlight the perils of ignoring deep institutional fraud domestically and the risks associated with it. The Roman Empire concerned itself with empire building, marching vast armies for years through conquered territories, but ignored the institutional decay that was ossifying the Roman homeland. Ultimately, it was not merely enemy armies that collapsed the empire, but the collapse of economic, social and moral structures deep within the empire.
Likewise, the United States continues to project formidable military and economic strength abroad, and is perceived as a protector of Western values and cultural institutions. This role protects the oligarchic military industrial complex and the enormous profits derived from these missions, but much like the Romans ignores the enormous costs and social impacts inherent in maintaining this infrastructure. The Chinese, much like the barbarians that faced the Roman armies, threaten to broach our economic and military borders not because of advanced technology or superior skill, but because of sheer brute strength and population size.
Similarly, the German Wehrmacht, the most formidable military machine ever assembled, was overwhelmed by waves of Russian divisions in World War II. In spite of possessing advanced technology and brilliant military tacticians, the Germans were slaughtered by waves of Russian soldiers, even as Germans killed 20 Russians for every slaughtered German. Both China and Russia currently have a near endless supply of labor, both militarily and economically, with which to rout American interests in the very near future.
Why is this history lesson critically important to us at this juncture? Because, as a nation facing some steep challenges economically, socially and culturally, we have chosen to ignore the deep institutional fraud that is fraying our homeland institutions. Instead, we continue to see risks only abroad, and ignore the destruction of our own homeland. These risks will consume us long before the Chinese or Russians have imposed their will.
What are these domestic risks that could destroy or severely weaken our homeland? For starters, the institutional fraud that has become Wall Street and the financial markets. The fraud perpetrated by the largest banks and investment backs, purposeful manipulation of the housing market through unreasonably lax credit facilities and policies and inflated asset valuations that are well beyond the historical norm. These same banks then profited on these loans, securitized and sold them, and foreclosed on the homes when consumers could no longer afford the negative amortization loans.
Finally, when their balance sheets were weakened and eroded, the government merely printed trillions of dollars in money and loaned the banks these funds at very low effective rates. This was, ultimately, the perfect scam. Institutionalized, with credit policies encouraged by regulators and the government, and fed by a voracious public intent on realizing the American dream. Eventually, the mantra of “too-big-to-fail” dictated extraordinary government intervention, which continues unabated.
Nothing has changed, and the manipulation of fiscal policy by the oligarchic banking theocracy has been well established and entrenched. The risk of failure to the American economy is immense, as the Chinese have essentially funded this bailout, and will likely have institutional influence over the course of American economic and domestic policy for the near to medium future. The banks, already deemed too-big-to-fail, will locate the next big asset from which to create another bubble. The American economy and Wall Street have, like seriously addicted drug addicts, become dependent on asset bubbles and inflation rather than corporate expansion. These excesses threaten to overwhelm the entire economy in the near future.
Americans have effectively lost control of their economic futures. These oligarchic institutions have nearly unlimited and unfettered control over the levers of economic and political power. Their only goal is profit preservation and expansion. The skewed policies of the Federal Reserve and the federal government will preserve the status quo for these institutions, but cause great economic damage to mainstream America. This will increasingly cause civil friction and dislocation to families and entire communities.
The American family and community are under great duress. The divide between classes will widen and the sense of community will be permanently lost, as enclaves of the rich will be cordoned off from the rest of these communities. America will increasingly look and feel like Mexico City, where walled encampments of homes hide behind 20 foot fences made of concrete and electronic gates, surrounded by security cameras and armed guards.
What other threats exist from within? There are too many to mention in this post, but certainly the impending failure of our medical health care system within the next 30 years has been documented recently. The related costs to fund the aging boomer generation throughout their retirement will be staggering, and no one has proposed any realistic solutions, Obama-Care notwithstanding. Coupled with the impending municipal pension crisis, these two threats alone will cause societal upheaval and discord, and require staggering realignments of policies and resources. The sheer magnitude of addressing these issues has certainly discouraged any effective remedial proposals.
In short, the United States should focus on the very serious issues of institutional fraud facing it, issues that lie squarely within its own borders, and at least begin the process of realigning a portion of its resources homebound. The failure to address these epic institutional issues will severely weaken the American empire and provide our enemies and adversaries with sufficient opportunistic motivation to sack the homeland, literally and figuratively. America has often been compared to Rome and its great ascendancy, let us hope it is not also compared to its decline and destruction.