If we are Rome, Wall Street's our Coliseum
by Paul B. Farrell
Date: August 27, 2007
What do Cassandra, "Chicken Little," the "Boy Who Cried Wolf" and David Walker, America's Comptroller General and head of the U.S. Government Accountability Office, all have in common?
Nobody pays attention to them!
Well, at least not until it's too late. Or till a brutal catastrophe wakes us up, forcing us into action....
It takes a 9/11. Before the direct hit, history lessons are academic. The David Walkers of the world are merely tolerated....
We're in denial, tuning out ... Americans just don't want to hear this modern day Cassandra's wolf cries about the sky falling ... ignoring history, we're determined to wait till the last minute, until the sky does fall, until the wolf does bite us.
So why did I do a double-take and listen? Because this time Walker used the "R" word. No, not recession, but "Rome." Listen:
“...There are striking similarities between America's current situation and that of another great power from the past: Rome....
“The Roman Republic fell for many reasons, but three reasons are worth remembering: declining moral values and political civility at home, an overconfident and overextended military in foreign lands, and fiscal irresponsibility by the central government. Sound familiar?"
...We assume that "tomorrow will take care of itself," and that the government will bail us out, like the Fed did recently with the discount rate. But, Walker warns, you can't trust government with your future:
"Unfortunately, our government's track record in adapting to new conditions and meeting new challenges isn't very good. Much of the federal government remains overly bureaucratic, myopic, narrowly focused and based on the past. ... Hurricanes Katrina and Rita brought that point home in a painful way ... Public confidence in the ability of government to meet basic needs was severely shaken ... If our government can't handle known threats like natural disasters, it's only fair to wonder what other public services may be at risk."
Walker's the one person in America with a nonpartisan, solidly analytical understanding of America's economic future, backed by 3,000 GAO employees analyzing every possible scenario ... and yet, his message is largely ignored....
"Entitlement reform is especially urgent.... by 2040 our government could be doing little more than sending out Social Security checks and paying interest on our massive national debt."
...And it boils down to the single problem that'll destroy America from within ... oppressive debt from out-of-control spending:
“...Simply stated, America is on a path toward an explosion of debt. And that indebtedness threatens our country's, our children's and our grandchildren's futures. With the looming retirement of the baby boomers, spiraling health-care costs, plummeting savings rates, and increasing reliance on foreign lenders, we face unprecedented fiscal risks."
...Here's Walker's history lesson for Wall Street: "It's useful to remember at the end of the 19th century, the original Dow Jones Industrial Average consisted of 12 stocks. These were all powerful companies, the leaders in their fields.... It's sobering to realize only one of the original 12 Dow Jones companies survives today, and that's GE. The rest couldn't adapt to changing conditions and either merged with competitors or went out of business."
Makes you wonder if maybe, just maybe, Wall Street itself might eventually look like today's crumbling Roman Coliseum ... and take "The Empire" down with it?
The above information has been redacted from the article as it originally appeared on MarketWatch.com on August 27, 2007.
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