The Weekly Quill — The Empire on Which the Sun Never Sets

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Markets Muscle the Federal Reserve to Go Negative

“The Gracchi wanted to reform the Republican system, but they also wanted to use those issues—economic inequality, grain for the plebs—to acquire political power for themselves. [Rival senators] believed this was going be terrible. If the Gracchi had been able to pass all of these popular pieces of legislation, they would have had more influence, and that was something their political rivals could not abide by. It created a desire to defeat the Gracchi above all. Old rules of conduct didn’t matter, unspoken norms weren’t as important as simply stopping the Gracchi from getting a win.

When Tiberius Gracchus introduced the Lex Agraria [to redistribute land back to poorer citizens], the Senate hired a tribune to veto it. This had never happened before. A tribune was supposed to be a defender of the people, and this was a popular bill. If it came to a vote, it was going to pass. It was not illegal what he was doing, but it was completely unprecedented, and this led Tiberius Gracchus to respond with his own measures, saying, ‘I’m going to put my seal on the state treasury so no business can be transacted.’ [Tiberius was later murdered by the senators.] The issues themselves almost ceased to be as important as making sure your political rival didn’t get a victory.

This is really what crippled the Senate. It’s 100 years of focusing on internal power dynamics instead of enlightened reform that caused the whole Republic to collapse.”

Mike Duncan, The Storm Before the Storm

The greatest fall in all the history of world economics was that of Rome. The irony: the decline was spurred by success. Duncan, quoted above following the release of his 2017 masterpiece, explained that, in this order, after Rome had conquered Carthage, annexed Greece and conquered Spain with its bounteous silver mines, wealth poured into Rome. The catch was that the Senate decided to keep the fruits of the war to themselves.

All the while, Roman citizens were being conscripted to work in conquered lands for three to five years. In their absence, their farms would be laid to waste. With the value thus depleted, the elite started to buy up the cheap land. As Duncan explains, “In the 130s and 140s you have this process of dispossession, where the poorer Romans are being bought out and are no longer small citizen owners. They’re going to be tenant owners or sharecroppers and it has a really corrosive effect on the traditional ways of economic life and political life. As a result, you see this skyrocketing economic inequality.”

The parallels with the United States today are too numerous to articulate. The global standing achieved by winning and helping finance two world wars has been squandered and replaced by massive debts. The political leadership’s sole focus is ensuring the destruction of their opposition thwarting forward progress on needed reforms. And the riches have increasingly accumulated to the richest. As noted by my friend Judy Shelton in a recent Wall Street Journal op-ed, “Total wealth from corporate equities and mutual fund shares went from $22.32 trillion in the first quarter of 2020 to $37.39 trillion in the first quarter of 2021—with 90% of the $15.07 trillion gain accruing to those in the top 10% by wealth.” It’s beyond poetic that these findings were produced by a Federal Reserve study.

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