Posts Tagged ‘john stossel’

John Stossel and the Decline of the Roman Empire

August 1, 2013

Ever since the fall of the Roman Empire, people have speculated on the cause of that fall. In general, those who have indulged in such speculation have seemed to believe that Rome had some fatal weakness that made its fall inevitable. They have often gone on to point out that their own country has flaws rather similar to Rome’s and that the fall of their nation’s power is likewise inevitable. We, Americans have not proven to be immune to the temptation of comparing ourselves to the Romans and wondering if the decline and fall of the American Empire is just around the corner. John Stossel ponders this question in his latest column at Townhall.com.

Unfortunately, the fall of Rome is a pattern repeated by empires throughout history … including ours?

A group of libertarians gathered in Las Vegas recently for an event called “FreedomFest.” We debated whether America will soon fall, as Rome did.

Historian Carl Richard said that today’s America resembles Rome.

The Roman Republic had a constitution, but Roman leaders often ignored it. “Marius was elected consul six years in a row, even though under the constitution (he) was term-limited to one year.”

Sounds like New York City’s Mayor Bloomberg.

“We have presidents of both parties legislating by executive order, saying I’m not going to enforce certain laws because I don’t like them. … That open flouting of the law is dangerous because law ceases to have meaning. … I see that today. … Congress passes huge laws they haven’t even read (as well as) overspending, overtaxing and devaluing the currency.”

The Romans were worse. I object to President Obama’s $100 million dollar trip, but Nero traveled with 1,000 carriages.

Tiberius established an “office of imperial pleasures,” which gathered “beautiful boys and girls from all corners of the world” so, as Tacitus put it, the emperor “could defile them.”

Emperor Commodus held a show in the Colosseum at which he personally killed five hippos, two elephants, a rhinoceros and a giraffe.

To pay for their excesses, emperors devalued the currency. (Doesn’t our Fed do that by buying $2 trillion of government debt?)

Nero reduced the silver content of coins to 95 percent. Then Trajan reduced it to 85 percent and so on. By the year 300, wheat that once cost eight Roman dollars cost 120,000 Roman dollars.

The president of the Foundation for Economic Education, Lawrence Reed, warned that Rome, like America, had an expanding welfare state. It started with “subsidized grain. The government gave it away at half price. But the problem was that they couldn’t stop there … a man named Claudius ran for Tribune on a platform of free wheat for the masses. And won. It was downhill from there.”

Soon, to appease angry voters, emperors gave away or subsidized olive oil, salt and pork. People lined up to get free stuff.

Rome’s government, much like ours, wasn’t good at making sure subsidies flowed only to the poor, said Reed: “Anybody could line up to get these goods, which contributed to the ultimate bankruptcy of the Roman state.”

As inflation increased, Rome, much like the U.S. under President Nixon, imposed wage and price controls. When people objected, Emperor Diocletian denounced their “greed,” saying, “Shared humanity urges us to set a limit.”

Doesn’t that sound like today’s anti-capitalist politicians.

Diocletian was worse than Nixon. Rome enforced controls with the death penalty — and forbid people to change professions. Emperor Constantine decreed that those who broke such rules “be bound with chains and reduced to servile condition.”

It might be useful to consider a few dates. Gaius Marius was consul in the years 107, 104-100, and 83 BC. The Claudius who ran for tribune is probably Publius Clodius Pulcher. He was murdered in 52 BC. Tiberius reigned as Emperor in the years AD 14-37. Nero reigned from 54-68. Commodus reigned from 180-192. Diocletian ruled from 284 to 305 and Constantine ruled from 306 to 337. The Roman Empire is generally considered to have fallen when the German warlord Odoacer forced the last Emperor Romulus Augustulus to abdicate in 476. This is not actually a very good date for the fall of the Roman Empire since government’s authority had collapsed outside of Italy about half a century earlier. Still, it seems that the excesses and follies of various Roman leaders which caused the fall of Rome took a long time to effect that fall.

Actually, Romulus Augustulus was not the last Roman Emperor. There was still a Roman Emperor in the East at Constantinople. The Eastern Roman Empire, usually called the Byzantine Empire survived intact up until the Arab invasions of the seventh century. Even then the Empire survived in Greece and Asia Minor with its capital at Constantinople until the Turks finally captured Constantinople in 1453. It is true that the average citizen in Constantinople in 1400 lived in a very different society that the Roman in 100 BC. He spoke Greek, not Latin, was ruled by an autocratic Emperor, not a republic, and was a Christian, not a pagan. Still, that citizen of Constantinople never doubted for an instant that he was a Roman a true descendant of the people who had once ruled the world.

The traditional date for the founding of Rome is 753 BC. Modern historians do not take the legends about Romulus and Remus very seriously, but 753 is probably as good as any other date for the beginning of the Roman state. If we consider Rome as having begun in 753 BC and ending in AD 1453 than Rome, as an independent state in various forms lasted for an incredible 2206 years. That is an existence longer that any other nation with a continuous history except for China and ancient Egypt. Rome was a major power from about 300 BC until AD 1100 or 1400 years. Rather than asking what caused the decline and fall of the Roman Empire, perhaps we should be asking how the Roman Empire lasted so long.

Are there lessons to be learned from Roman history? Perhaps. We should keep in mind that Ancient Rome was a very different society than modern America. The Roman Republic became the Roman Empire, in part, because Roman political leaders stopped following the unwritten Roman constitution. We may be able to learn something, though There are signs that many contemporary American politicians view our constitution more as a hindrance to get around than a basic law to follow. I don’t think that our situation in America is like fifth century Rome. There are no Visigoths ready to sack New York or Washington DC. I think it is more like Rome in the late second century BC, a republic whose institutions are starting to break down. I am afraid that there is a Julius Caesar or Augustus somewhere who is fated to fundamentally transform the American Republic into the American Empire.

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John Stossel

April 12, 2012
John Stossel

John Stossel (Photo credit: Wikipedia)

I always like watching John Stossel back when he was the consumer affairs correspondent on 20/20. It was always fun to watch him expose scams and con artists. Since then, he has moved on to Fox News and his political views have changed dramatically from the typical liberalism of most people in journalism to strong Libertarianism. He talked about this transition in his first book Give Me a Break.

What caused Stossel’s conversion? As he tells it, in his work as a reporter, he made some observations that caused him to change his worldview. It is not often that someone will do that, especially a person with a career in the public eye. Most people would rather die than ever admit they were wrong, or change long held beliefs. John Stossel seems to be one of the few honest and courageous enough to do so.

Stossel’s first discovery was that most business people are not, in fact, crooks. This may seem counter-intuitive to anyone raised on Hollywood’s anti-business and anti-capitalist fare, but Stossel realized that the great majority of people who own a company try to run it honestly and ethically. The scam artists he made a career exposing were in the minority and they were never very successful in the long run.

Here, Stossel stumbled on an important aspect of a free market economy. In order for a business to flourish, it has to provide customers with a good quality good or service at a price they are willing to pay. A company that does not do this will, sooner or later, fail, unless it convinces a government that it is too big to fail. The classic example here would be the American auto industry. After World War II, the big three auto makers; Ford, GM, and Chrysler had a near monopoly on the US market. They began to get lazy. They began to sell poor quality cars to the American consumer, thinking that the consumers had nowhere else to go. They were wrong. Now two of the three are owned by the government.

An example of a business that does thing right is Amazon.com. My Kindle stopped working yesterday. The screen developed large patches that seemed frozen. I called their support center and they said they would ship me a replacement. There was no trouble. I did have to pay $69 because the warranty had run out, but considering that buying a new one would have cost me $139, this seemed a bargain. Why did Amazon do that. They might have made more money by telling me “tough luck” and expecting me to buy a new Kindle. Then again, maybe not. There are other people out there selling e-readers. I suppose Amazon is making a profit out of the deal, but even if they are not, it is worth taking a loss to keep me a satisfied customer.

Imagine, if Amazon.com had a monopoly on electronic publishing. Better still, imagine if this monopoly were enforced by law, or that Amazon.com were a government agency. Would they care about making me happy? Probably not. Just look at our public school systems if you have any doubts about how well governments respond to consumers.

This is not to say that business people are all wonderful or even especially virtuous, much less that they are somehow superior to people who work in government. They are not. Nevertheless, anyone in business has a certain incentive to maintain a good reputation that people in government do not. This is why the free market is far, far superior in meeting people’s needs than any centralized planning agency.

The other thing Stossel discovered was that government regulations designed to save people from being taken advantage of often hurt the very people they are meant to help. The simple truth is that the crooks will always be able to game the system for their own advantage and care little whether or not they are following the rules. Honest people who are obliged to comply to an ever more complex system of rules and regulations find themselves at even a greater disadvantage against the unscrupulous. And one should keep in mind that it is all too easy for the powerful and well-connected to change the rules to benefit themselves against their less fortunate competitors. An inconvenient truth is that big business is not often really opposed to big government, if big government can help them crush the competition. Remember the anti-trust suit against Microsoft? Bill Gates’s enemies relished the opportunity to use the government to to take him down.

I would also consider the efforts to curtain the production of methamphetamines in this light. Here in Indiana you have to show an ID to buy any cold remedy that contains pseudo ephedrine, an ingredient of methamphetamines. There are limits to how much you can buy, etc. This is an inconvenience to anyone suffering from a cold but has it worked? It seems that the police are discovering a new meth lab in our county every week. Obviously the meth dealers are having no trouble getting around the law.

I don’t get to watch John Stossel on television much any more, but I have read his first two books. He has just now come out with another one called No They can’t. Maybe I’ll download it when my kindle arrives.

Buy American?

November 4, 2011

John Stossel has some words here to say about the idea that buying American made products will improve the economy.

One sign of economic ignorance is the faith that “Buy American” is the path to prosperity. My former employer, ABC News, did a week’s worth of stories claiming that “buying American” would put Americans back to work.

I’m glad I don’t work there anymore.

“Buy American” is a dumb idea. It would not only not create prosperity, it would cost jobs and make us all poorer. David R. Henderson, an economist at the Hoover Institution, explained why.

“Almost all economists say it’s nonsense,” he said. “And the reason is: We should buy things where they’re cheapest. That frees up more of our resources to buy other things, and other Americans get jobs producing those things.”

He goes on with the usual arguments in favor of free trade and his piece is worth reading. One thing I wonder is, how can you determine what is American? Is a Toyota made in an American factory with components from Japan American? How about my iPod made in China for an American company and with some components from America? What about a shirt made in India from cotton grown in Egypt but sold in Wal Mart, and the workers eating American corn?

It seems to me that the world’s economy has become so integrated that it must now be very difficult, if not impossible to say that any product is produced in any one country. Any thing you find in any store is made from components from many places.

Another thing occurs to me. If the US erected trade barriers and we insisted on only buying American, what is to stop the Chinese from deciding to only buy Chinese, or the Germans only buying German, etc.

Stossel is right. Trying to interfere with free trade is only a way to shoot ourselves in the foot.

Into the Abyss

June 15, 2011

John Stossel writes in his latest column about the coming fiscal emergency.

America is falling deeper into debt. We’re long past the point where drastic action is needed. We’re near Greek levels of debt. What’s going to happen?

Maybe riots — like we’ve seen in Greece?

We need to make cuts now.

He doesn’t give up hope. Instead he points out how Canada and Puerto Rico have managed to get their houses in order.

When I think Canada, I think big government. I’m embarrassed that I didn’t know that in the mid-’90s, Canada shrank its government. It had to. Its debt level was as bad as ours is today, almost 70 percent of the economy. Canada’s finance minister said: “We are in debt up to our eyeballs. That can’t be sustained.”

Economist David Henderson, a Canadian who left Canada for the United States, remembers when The Wall Street Journal called the Canadian dollar “the peso of the north.” It was worth just 72 American cents. “Moody’s put the Canadian federal debt on a credit watch,” Henderson said.

The problem, he added, was that Canada had a government safety net that was more like a hammock.

“When I was growing up in Canada, people who went on unemployment insurance were said to go in the ‘pogie.’ You could work as little as eight weeks, taking the rest of the year off.”

So in 1995 Canadian leaders cut unemployment benefits and other programs. It happened quietly because it was a liberal government, and liberals didn’t want to criticize their own. The result was that Canada’s debt stopped increasing. As the government ran budget surpluses, the debt went down.

“The economy boomed,” Henderson said. “Think about what government does. Government wastes most of what it spends, and so just cutting government and having that money in the hands of people means it’s going to be used more valuably.”

Canada fired government workers, but unemployment didn’t increase. In fact, it fell from 12 percent to 6 percent. Canadian unemployment is still well below ours. And the Canadian dollar rose from just 72 American cents to $1.02 today.

Fortuno is governor of Puerto Rico. Two years ago, he fired 17,000 government workers. No state governor did anything like that. He cut spending much more than Walker did in Wisconsin. In return, thousands of union members demonstrated against Fortuno for days. They clashed with police. They called him a fascist

Fortuno said he had to make the cuts because Puerto Rico’s economy was a mess.

“Not just a mess. We didn’t have enough money to meet our first payroll.”

Fortuno’s predecessors had grown Puerto Rico’s government to the point that the state employed one out of every three workers. By the time he was elected, Puerto Rico was broke. So the new conservative majority, the first in Puerto Rico in 40 years, shrank the government.

What was cut?

“Everything. I started with my own salary.”

The protesters said he should raise taxes instead of cutting spending.

“Our taxes were as high as they could be, actually much higher than most of the country. So what we’ve done is the opposite.” Fortuno reduced corporate taxes from 35 percent to 25 percent. He reduced individual income taxes. He privatized entire government agencies.

“Bring in the private sector,” Fortuno said. “They will do a better job. They will do it cheaper.”

Fortuno’s advice for leaders who want to shrink the state: “Do what you need to do quickly, swiftly, like when you take off a Band-Aid. Just do it. And move on to better things.”

Unfortunately one of our major parties would rather play politics and watch the country go down the drain.

We badly need more grownups in Washington.

John Stossel Makes Too Much Sense

May 4, 2011

I’d like to lock President Obama and every one in Congress into a room with John Stossel and have him talk to them. Maybe then, we might start to get something like a rational economic policy. In his latest column in Human Events, he takes on the popular and wrong idea that “speculators” are evil, greedy people who conspire to jack up prices and gouge the public.

The speculators are ripping us off!

“The skyrocketing price of gas and oil has nothing to do with the fundamentals of supply and demand, and has everything to do with Wall Street firms that are artificially jacking up the price of oil in the energy futures markets. … (T)he same Wall Street speculators that caused the worst financial crisis since the 1930s through their greed, recklessness and illegal behavior are ripping off the American people again by gambling that the price of oil and gas will continue to go up.”

Here we go again. That quote was Sen. Bernie Sanders doing what some always do when the price of oil spikes: complain about speculators. Now, President Obama says he’ll investigate them: “We are going to make sure that no one is taking advantage of the American people for their own short-term gain.” I assume that his new Financial Fraud Enforcement Working Group, like its predecessors, will uncover nothing untoward.

As he so ably explains

Speculators are like the ants in Aesop’s “Ants and the Grasshopper” fable: They save resources for lean times. Everyone benefits because everyone has a chance to buy from them in those lean times.

Speculators don’t “artificially jack up the price of oil” — they take risks. Those who guess wrong lose a lot of money.

I really wish the people in Washington would listen.


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