Empires have come and gone. Some lasted a blink of an eye and some millennia.
The question is, after 9/11, the rise of China and a great financial crisis, where does the U.S. empire stack up to its predecessors?
Well, it seems the one commonality they all have is the point when their might was undermined by sloth and greed. And entitlements: free bread and circuses. For some it took years, others centuries.
Here, in a compelling and unique address, is what Romulus Augustus, the last emperor of the Roman Empire, might say to President Obama now about how to keep America great.
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- DON’T BE SO ARROGANT, MR. PRESIDENT
- The Latest Obama Outrage: the Family's $100 Million Vacation
- Paul Krugman May Be the World's Last Flat Earth Economist
- Why The Fiscal Cliff "Deal" is Spelled P-O-R-K
- Why Japan's "Lost Decades" Are Headed to America in 2016
- The Real Question Facing Tech Investors Is The Jobless Recovery
- Conspiracy Theories About the Jobs Report Don't Ring True
- Read This Before You Cheer the September U.S. Jobs Report
- The Ugly Truth About the Promise of the JOBS Act
- What the Last Roman Emperor Would Tell President Obama Today
- How the Fiscal Cliff will Deal a Blow to U.S. Defense Industry
- Obamanomics: What You Can Expect if President Obama Wins the Election
- Iran is Now a Full-Blown Crisis, Stage Set for $200 Oil
- What the World Will Look Like if Occupy Wall Street Wins
- GDP Is a Lie – It’s Time for a New Measure of Economic Growth
- The Debt-Ceiling Debate: Three Federal Tax Increases That Could Save the U.S. Economy
Empires have come and gone. Some lasted a blink of an eye and some millennia.
How much do you spend on your summer vacation? American households usually spend about $1,200 per person on summer vacations, according to a recent American Express survey.
Presidents spend more on their vacations than you or I. They have to. Air Force One and security does cost more than loading the Honda and heading to the beach.
Here's how much some recent presidents spent our tax dollars on vacation.
Ronald Reagan spent most of his free time at his California ranch. Taxpayers covered the cost of approximately $8 million for presidential travel during Reagan's first six years in office, according to the Los Angeles Times. That amounts to $1.3 million a year.
For George Bush the cost of flying Air Force One to his Texas ranch was approximately $56,800 per trip, for each of the 180 trips according to Media Matters. President Bush spent Christmas during his two terms at the White House so his staff and secret service could spend the holiday with their family, according to Conservative Byte.
Now Obama plans to blow away all previous presidents' leisure travel costs on our dime with a better than Disney World extravaganza trip to Africa.
However Obama had to cancel the safari because of the need to fill the surrounding jungle with snipers to guard the president from wild animals!
Nobel Prize-winning economist and New York Times columnist Dr. Paul Krugman is at it again. He claimed earlier this week that fixing the deficit is important, but added that "doing it now would be disastrous." He also observed that the 10-year U.S. debt situation isn't really all that bad.
I don’t know how he can make that argument with a straight face.
For five years now, Dr. Krugman has argued that increasing U.S. government spending is vital to our nation's recovery. And for five years he's been dead wrong.
Dr. Krugman claims that "we" just haven't spent enough money... yet.
Here's why that makes him very dangerous...
Behind the scenes of the Fiscal Cliff debate, there was plenty of f-bombing, poison pilling, and grandstanding leading up to the deal - and that was before the members of Congress and the Senate actually got serious with their usual ultimatums, followed by earnest- looking sound bites and posturing. But what gets me really riled up is the amount of "pork" contained in the bill...
The hope is that Abe's promises of fresh stimulus, unlimited spending and placing a priority on domestic infrastructure will be the elixir that restores Japan's global muscle.
As a veteran global trader who actually lives in Japan part time each year, and who has for the last 20+ years, let me make a counterpoint with particular force - don't fall for it.
I've heard this mantra eight times since Japan's market collapsed in 1990 - each time a new stimulus plan was launched - and six times since 2006 as each of the six former "newly elected" Prime Ministers came to power.
The bottom line: The Nikkei is still down 73.89% from its December 29, 1989 peak. That means it's going to have to rebound a staggering 283% just to break even.
Now here's the thing. What's happening in Japan is not "someone else's" problem. Nor is it something you should gloss over.
In fact, the pain Japan continues to suffer should scare the hell out of you.
And here's why ...
The so-called "Lost Decade" that's now more than 20 years long in Japan is a portrait of precisely what's to come for us here in the United States.
Perhaps not for a few years yet, but it will happen just as we have already followed in Japan's footsteps with a "lost decade" of our own.
The parallels are staggering.
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Clearly, the stats show a modest rebound -- weak progress on jobs that is just slightly ahead of population growth.
I still see a sluggish economy for the next few quarters. We haven't had any news out of Washington -- from either party -- to give employers the confidence they need to hire in a big way.
Now, with Obamacare kicking in along with new regulations on banks and finance companies, I believe that trend will continue.
Can we talk about unemployment in the U.S.? And can we talk about conspiracy theories?
I thought you'd say "yes." I can almost hear you saying, "Hell yeah, bring it on!"
So, let's have at it.
Let me say my piece, and then you can chime in.
I'll start by saying I don't think there's any conspiracy to manipulate the unemployment numbers.
You know, the numbers that came out on Friday and freaked everybody out.
Somehow, right before the election and right after President Obama fell flat on his face, after Mitt Romney knocked the champ (don't get mad, he's not my champ, he's the champ because he's the incumbent) down almost for a ten-count, the bloodied champ bounds off the canvas and stands on the ropes proclaiming victory over economic malaise because the unemployment rate fell below 8%.
Well, what's freaky about the unemployment number, the U3 number, the most widely watched and reported measure of unemployment in the country, maybe even the world, is that it fell from 8.1% in August to 7.8% the September.
What's got folks in an uproar (folks that aren't so folksy when it comes to the champ) is that it looks pretty conspiratorial that unemployment hasn't been below 8% in 43 months, not since Obama got into office. And all of a sudden it drops in August to 8.1% from July's 8.3%, and far more freakily, drops to 7.8% (that's below 8% for you non-math types) in September from 8.1% in August.
But before I give you my thoughts on why I don't think there's a conspiracy...
Okay, let's stop right there. The truth is I DO believe in conspiracies.
I believe that John Kennedy was assassinated in a coup'd'état in Dallas. Who did it and why? Figure it out, the facts are all there.
I believe that the Federal Reserve System is a front for the power, and of course, moneyed elites who run America for the benefit of its Club Fed members. The facts are all there.
Do I believe in other conspiracy theories? You bet I do. I just don't believe in all of them, especially the ones that can't be proved. Theories are fine, but give me some facts.
But I digress.
Does it smell like a conspiracy, some manipulation of the unemployment numbers that look so much better and may now aide Obama's reelection campaign?
You bet it does.
That's the lowest level in 44 months - since January 2009, the same month President Obama took office.
But, the number of jobs added was shy of estimates, and the unemployment rate remains at an unhealthy and elevated level.
And as usual, there are scary statistics lurk behind that headline number.
"I take these numbers with an enormous grain of salt," economist Joshua Shapiro of consultancy MFR Inc. told The Wall Street Journal. "I think the underlying trend is pretty clear in terms of the labor market-that it's still struggling quite mightily."
The September U.S. Jobs Report: A Closer LookU.S. Labor Department data released Friday revealed total nonfarm payroll employment increased by 114,000 workers last month, slightly missing economists' estimate of 115,000.
Total employment as measured by the government's household survey rose 873,000 in September.
But the bulk of the jobs added in September were for part-time workers, positions taken because of waning business conditions or because they were the only jobs those seeking work could find. The number of people who are working part time but want to be working full time rose by 582,000.
In addition, a great number of discouraged Americans have simply stopped looking for work or have exhausted unemployment benefits and fallen off the unemployment radar.
Also missing from the count is the out-of-work self-employed group. And a plethora of students are choosing additional education instead of work as a means to avoid a difficult job market.
Even if the "cooked" figure of 114,000 was accurate, it's still well below the minimum 125,000 jobs that need to be added every month just to keep up with population growth.
"When you look at the payroll numbers, they are bumping along where we have been around this 100,000 level, which is not enough to consistently reduce the unemployment rate. The overall message is one of plodding along. It's OK, it's not disastrous, but it's nowhere near where the Fed wants to be," Lee Ferridge, head of macro strategy for North America at State Street Global Markets stressed to CNBC.
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On one level, the JOBS Act is full of promise. On another some of the elements are downright ugly. As Shah explains, its buyer beware. Continue reading...
As one of the world's first true superpowers, the Empire's achievements included the world's first standing professional army, economic prowess, intellectual growth and governance principles that are commonly regarded as the basis for modern society.
But it is also remembered for its spectacular collapse in less than a century under the weight of bad debt, an overextension of the Empire, a collapse of morals that led to a deluded and self-absorbed political elite and reckless public spending that far outweighed collections.
Given the parallels to our situation, I can only imagine what Romulus Augustus, widely considered to be the last of the Roman Emperors, would tell President Barack Obama today about how to prevent the wholesale destruction of our own "Empire."
But it would probably go like this...
Cara praeses Obama, (Dear President Obama)
Like mine, your world is changing fast. No doubt it's very different from the one you thought you'd inherited. Your success will depend on new thinking and an eye to the future taken from lessons of the past.
I wouldn't be offended if you have never heard of me.
I oversaw the dying days of what you know as the Classic Western Roman Empire. My fall in September 476 marked the end of centuries of greatness and the fall of ancient Rome.
Some historians consider my departure as the beginning of the Middle Ages. I understand the nature of collapse: how it begins, how it progresses, and where it all ends.
As a historical footnote to a once great empire, here's my advice to you, Mr. President.
At the end of this year, current tax policies are set to expire and new ones will go into effect at the start of 2013. What Americans can expect if the policies are not extended is a painful combo of tax increases and spending cuts that will thrust the struggling U.S. economy back into a recession.
If U.S. lawmakers fail to act, scores of economists agree what we'll get is a $600 billion drag on the already sluggish economy. The tax implications have been widely discussed, but there has been little chatter about the impact on the defense sector, which stands to sorely suffer since it is subjected to half of the proposed spending cuts.
However, when the markets begin to handicap the race it will be about a lot more than just picking the eventual winner.
Instead, everything will revolve around the policies and consequences that come along with the winner.
The difference in approach promises to be stark with "Obamanomics" on the left and "Romneynomics" on the right.
Each one comes with its own set of consequences, though.
Today I'm going to look at "Obamanomics II," or the policies we will get if President Obama is re-elected.
But those on the left shouldn't despair...In my next piece, it's Romney's turn.
As for the horserace itself, it's too close to call, with neither side having much chance of winning a big victory.
President Obama Has the EdgeEven still at the moment, President Obama appears to be ahead. Apart from his modest lead in the polls, my former home state of Virginia appears to be swinging definitively toward the Democrats.
Yes, Republican Bob McDonnell did win the Virginia governorship handily in 2009, but he was a very good candidate. Moreover, turnout in gubernatorial elections is normally low. Thus I believe the latest polls showing Obama with a 7% lead in Virginia are accurate, and without Virginia Romney has a very difficult path to the presidency.
If we believe the presidential election will be close, then it follows that Congress and the Senate elections must be close, too.
If Obama wins in November, the most likely outcome must be that the Democrats will hang on to the Senate, while the Republican House majority survives, albeit much smaller than at present.
With this combination, the president's more extreme wishes (or those of his team) will be restrained. But as a newly re-elected figure he will nevertheless have more power to get what he wants than he does currently.
Whatever the congressional numbers may be, the president's first task will be to face the "fiscal cliff" of January 2013, when the Bush tax cuts and temporary payroll tax cuts expire and automatic spending "sequestration" comes into effect.
There are three reasons for this - all happening within the last week:
- First was Tehran's successful launch of a satellite, viewed by all in the region as being for military intelligence.
- Second, in his toughest talk to date, Iranian Supreme Leader Ayatollah Ali Khamenei voiced defiance to Western sanctions and pledged open retaliation if they are instituted.
- Finally, last Thursday, U.S. Secretary of Defense Leon Panetta expressed concern that, if matters continue, Israel could attempt an air-strike takeout of Iranian nuclear facilities within a month. Iran has been frantically moving essential components of its nuclear program underground to withstand such an attack.
What's more, the EU decision to stop importing Iranian crude starting July 1 will cripple any chance Tehran has to combat escalating economic and political turmoil at home.
Yet Khamenei's defiant tone during his Friday prayer meeting speech indicates that Iran's religious leadership will not wait for the system to unravel.
And that is what makes this both a full-blown and an intensifying crisis.
Brinksmanship in the Straits of HormuzSo what's being done?
Washington has little - leverage, save its ability to temper an immediate escalation by Israel (leverage the U.S. can still apply, at least for the moment). It also has some indirect influence on what the E.U. does.
Meanwhile, Saudi Arabia also is a wild card. It will not tolerate a nuclear Iran.
And yes, there are ample indications that American and Israeli intelligence have concluded Iran will achieve the ability to develop nuclear weapons in the next 18 to 24 months.
Some elements of that process will be available earlier, but remember: A weapon is of little value unless it can be controlled and delivered. The logistical and infrastructure considerations need to be in place first.
Yet with such an inevitable conclusion staring them in the face, the West has decided to embark on a risky path...
The target here is not the nuclear project at all (over which there is less and less outside control). Instead, it has become about creating massive domestic instability to bring down a regime.
Now, this is not about ending the theocracy. With or without Mahmoud Ahmadinejad as president or Ali Khamenei as supreme leader, Iran will remain a Shiite-dominated country. Religion decisively controls politics, and the clergy oversees the society.
The West is seeking a more moderate application of what will remain the Iranian cultural reality.
However, as the brinksmanship intensifies, so will the price of crude oil. Tehran, in this dangerous game of international chicken, really only has one card to play - the Strait of Hormuz.
There has been much misinformation circulated about the strait. Here are the facts.
On any given day, 18% to 20% of the world's crude oil passes through it.
According to the Energy Information Administration, the Strait's narrowest point is 21 miles wide; however, the width of the shipping lane in either direction is just two miles, cushioned by another two-mile buffer zone.
Of greater significance, though, is the fact that most of the world's current excess capacity is Saudi. (This is the oil that can be brought to market quickly to offset unusual demand spikes or cuts in supply elsewhere.) And, unfortunately, Saudi volume must find its way through the same little strait.
If we're unable to access the Saudi excess, that loss guarantees the global market will be out of balance. That will intensify the price upsurge - an upsurge that is already happening.
Now for the question I'm being asked several times a day in media interviews...
Just how bad can it get?
But what if it "succeeds?"
What would our investing landscape look like and what would we do about it?
I think that's an interesting question, especially since Occupy Wall Street has gained some traction, even taking on a global appeal. And more importantly, there are two other reasons the movement could succeed:
- First, our political system is broken and has deteriorated into little more than a fancy debating society.
- And second, the world's central bankers remain out of control; their bailouts are saving the irresponsible at the expense of the hardworking. Our regulators and Wall Street remain locked in an unholy alliance that has done very little to fix the underlying problems that have resulted from decades of bad fiscal policies, unsound monetary practices, and dysfunctional leadership.
A lot of people thought they would go away, too. But Tom Hayden and his collection of Students for a Democratic Society didn't. Nor did Abbie Hoffman, Bobby Seale, and others. Their passion and that of thousands who joined in eventually succeeded in changing the course of social consciousness.
OWS could too.
By shunning the hierarchy that is organized politics and corporate America, there is the sort of strength necessary to address the growing disparity and the vanishing opportunities that are the new economic reality for millions of Americans.
I, for one, am hopeful that OWS will find the leadership needed to clearly delineate its goals and mandate change on the strength of the raw unvarnished potential that is now driving it.
I am also hopeful that OWS will succeed in raising the social consciousness to the point that living within our means becomes both an economic and political reality.
But that's just me. You may have entirely different feelings. That we might not agree is irrelevant.
Since OWS began, I've been watching carefully and doing a lot of deep thinking about what things might look like if OWS "wins" - however you define the term.
So here's a look at some of the potential changes that could take place if the movement succeeds:
That's right. GDP is a financial ruse - the biggest of the past half-century. And it's time to move past it to another, more accurate measure of economic growth.
Keynesian economist Simon Kuznets designed GDP at the height of the New Deal era. Kuznets first revealed the measure in a report to Congress in 1934. GDP takes into account consumption, investment and government expenditure to create a measure of economic growth.
But the Keynesians employed some chicanery, or sleight-of-hand, to generate this statistic. A close look reveals the dirty little secret about GDP: It intentionally overplays the importance of government spending - and in doing so inflates the role that Washington plays in each of our lives.
And it's been doing this for 77 years ...
The Biggest Lie of the 20th CenturyGross domestic product is supposed to be a measure of all the goods and services produced here at home.
But there's a discrepancy.
You see, private-sector output is measured by the price people are prepared to pay for it. But government output is fudged: It's measured by its cost.
That means GDP increases any time the government spends money. It doesn't matter if that money is actually put to productive use or not - GDP rises nonetheless.
The bureaucrat devising regulations that damage business? His salary increases GDP. The $300 million Alaskan "bridge to nowhere" of a few years back? That was $300 million added to GDP. The jet-fighter project that costs billions, and is plagued by huge overruns that lead to its cancellation? Those billions add to GDP.
Even public-spending "stimulus" programs, however foolish, are always effective according to the GDP definition, because their cost is simply added to output.
It's obvious why big-government Keynesians would like this calculation: It substantiates their claim that government spending stimulates economic growth.
In the real world, however, this makes no sense. Indeed, none of the examples above actually add to economic welfare.
Don't misunderstand - some government output is very valuable. We could not exist in a free society without a court system that protects our property rights and a national defense that protects our borders. In most other cases, however, if government output were truly cost effective, the private sector would've already taken the initiative (and probably done so at lower cost and greater impact).
So how can you get an accurate measure of economic growth?
Arithmetically, there's a simple solution: You take Line 1, "Gross Domestic Product," in the Bureau of Economic Analysis' GDP Table and subtract from it Line 21, "Government Consumption Expenditures andGrossInvestment. "
That gives you a net number, which we can call "gross private product," or GPP. It's a measure of all the output produced by the private sector. In general, it will underestimate national "welfare" unless government is really bad. But it will give you a much better idea of the output the market economy is producing.
Indeed, looking at GPP's past performance helps to explain some things that GDP doesn't.
Keynesians like to proclaim that World War II got America out of the Great Depression: Thus, if you make stimulus big enough, it will solve economic problems.
This is the biggest lie of the 20th century.
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