Tuesday, October 22, 2019

September existing home sales: a pause in the housing rebound


 - by New Deal democrat

I normally don’t bother with existing home sales, since it is the least economically important of housing data, but it’s a really slow news week, so ...

September existing home sales were reported at 5.38 million annualized by the NAR. While that is a decline from August’s revised 5.50 million rate, it is better than all of this past spring’s numbers, which formed the recent trough in this series (Note: this morning’s data not shown):


So the overall trend remains higher, as is to be expected with lower mortgage rates. 

The NAR is squirrelly about graphs of its longer term data, but I can tell you that the peak for this expansion was approximately 5.75 million annualized sales in November 2017. Increasing interest rates in 2018, assisted by the continuation of rising prices, caused sales to declined throughout 2018.

I expect the gradually rising trend to continue so long as mortgage rates remain near multi-year lows. At the same time, high prices relative to median household income will put a “choke collar” on growth, restraining much upside.

NOTE: Tomorrow is a travel day for me, so no posting then. New home sales and initial jobless claims will be reported Thursday, so I expect to chime back in then.

Monday, October 21, 2019

The divergent nowcast and one model’s forecast at Seeking Alpha


 - by New Deal democrat

Over 10 years ago I found a good, quick-and-dirty way of looking at the Index of Leading Indicators. It only matters at turning points, which means, for the first time since the 2015-16 “shallow industrial recession,” it’s worth looking at now.

That, plus a concise look at the bifurcation in the producer vs. consumer economy as it stands now, is a post I’ve put up over at Seeking Alpha.

As usual, clicking over and reading should hit you with a little dose of knowledge, and me with a little dose of coin to reward me for my efforts. After all, those books I’m reading on the historical antecedants to the American Republic aren’t boing to pay for themselves!

Sunday, October 20, 2019

The Rise and Fall of the Roman Republic: Index to posts


 - by New Deal democrat

For future reference, links to my four posts on the Rise and Fall of the Roman Republic





The Rise and Fall of the Roman Republic: part 4 of 4: the Empire as hegemonic “Banana Republic” ruled by caudillos


 - by New Deal democrat

As we have seen, the Roman Republic was brought down by an escalating series of acts of political violence, from murders to organized political mobs, to private legions, to four military marches over a period of 40 years on a Rome which had no permanent  defense force whose loyalty was to the Republic. The violence and military takeovers occurred in part because senior magistrates were also expected to be generals in command of legions.  

The underlying causes were the festering inequality between Romans and their Italian allies, and between the landed oligarchs and the urban and rural plebeians. Over the long term, rather than compromise their power, the oligarchs in the Senate in particular were willing to play “constitutional hardball” and do away with the limitations on power set by the Republic. In this way the downfall of the Roman Republic is very similar to the process described in Levitsky and Ziblatt’s “How Democracies Die.”

This brings us to Barry Strauss’s “Ten Caesars.” It is not so much a history of the Roman Empire, but rather brief biographies of ten Emperors from Augustus to Constantine, with Augustus, as the founder, being the longest. What I ultimately learned was that the Empire was an ancient, hegemonic version of what we would call today a “banana republic,” where there is rule by caudillo. Forms of succession varied: sometimes a dynastic succession worked, sometimes there was a succession chosen by the Senate, sometimes the most powerful general of the legions simply took over, and sometimes there was a palace coup by the Praetorian Guard acquiesced to by the armies and ratified by the Senate.

The book’s largest section is devoted to the first Emperor, Octavian, Julius Caesar’s nephew, who took for himself the name Augustus Caesar and ruled for 41 years, bequeathing stability to Rome after the convulsions of the late Republic, and deserving despite his tyranny to be recognized as a historical great man.  

Leaving the details to the book, let me state that Octavian was both a shrewd general and a masterful politician, sort of like a Michael Corleone among Michael Corleones. He was only a teenager when his uncle Julius was assassinated, and made a cunning asset of his youth, as his adversaries underestimated his abilities. As the named heir in Julius’s will, he swiftly obtained the loyalty of Jullius’s legions. He engaged in the last civil wars of the era, first in league with Marc Antony against Brutus and Cassius, and then defeating Antony and Cleopatra to gain dictatorial power. 

Like Michael Corleone, he settled all the accounts of the Caesar family quickly, engaging in a purge that did away with all his enemies.  But thereafter, his governing hand was stable but more relaxed, encouraging acceptance. The subsidized bread dole for the plebeians continued — in fact it continued through the course of the Western empire. To solve the problem of potential rivals marching on a defenseless city of Rome, Augstus established the Praetorian Guard of roughly 30,000 troops stationed just outside the city gates, whose loyalty was directly to the emperor. Finally, he established a system of professional administration of the far-flung provinces of the Empire, frequently making use of local magistrates, but in any event whose loyalties were directly to him rather than patronage doled out by the Senate as had been the case during the late Republic.

And many of the forms of the Republic continued, most notably, the Senate and the offices of consul and tribune, although they were appointed by the Emperor and were empty shells of authority. As you might imagine, what did totally disappear were the democratic “assemblies.” Also, determined not to repeat his uncle’s fatal mistake, Augustus never had himself decreed “dictator for life,” but rather took the more modest euphemism of “First Citizen,” a title that also survived for centuries.

The form of succession also had similarities to the militarism of the late Republic, and is best likened to rule by a succession of caudillos in Latin American “banana republics.” Almost all emperors wanted to continue dynasties, but many never had children who survived into adulthood. So it was not uncommon for the emperor to adopt a nephew or even a loyal and successful general as their “son,” thus preparing for an orderly succession. For example, Augustus adopted his step-grandchild Tiberius as his son, and upon his deathbed went so far as to cold-bloodedly have his actual grandson, Agrippa Postumus, executed in order to remove a potential rival.

Similarly, the emperor Nerva adopted Trajan, who in turn adopted Hadrian (said Trajan’s wife Florian, and Hadrian himself at least), who in turn adopted Marcus Aurelius. Usually, these adoptions were of more distant relatives by blood or marriage, and in each case the existing emperor tried to select the most worthy successor among their relatives (but not in the case of Nerva’s adoption of Trajan. Nerva had been appointed by the Senate, and the army was not happy. The Praetorian Guard executed the assassins of Nerva’s predecessor, Domitian. Nerva avoided abdication - or worse - by adopting Trajan, who commanded several legions, and explicitly appointing him his successor). This system meant that no civil war for succession occurred until the death of Nero in 88 AD, and not again for 100 years until the 190s AD.

But sometimes there was civil war, and even in the case where a succession may have been anticipated, the “adopted” son would have been a successful general, who had the loyalty of his legions, and usually the loyalty of several other generals and their legions as well. In that case a march on Rome was always an option. Usually the loyalty of the troops was cemented by bonuses paid upon the general being acclaimed as emperor. For example, Hadrian paid a double bonus to Trajan’s legions upon his accession, as to which he did not wait for Senatorial benediction. In a few cases, as with the assassination of Caligula, the praetorian guard decided who they wanted the next emperor to be and had the Senate coerced into acclaiming him emperor, as with Claudius (alas, for those of us who remember the famous TV series, not one of the twelve emperors profiled, although Strauss does not indicate that Claudius was in any manner a closet Republican).

Strauss’s account of the twelve Emperors lends some support to the thesis of Paul Kennedy‘s book “The Rise and Fall of Great Powers,” which is that, since at least 1500, economic power (and decline) has preceded military power (and decline).  During the Republic and the early Empire, conquest brought land, slaves, and the vanquished state’s treasury (in the form of gold, silver, and precious jewels) which would be redistributed to the victors.

But the Roman Empire reached its military zenith under Trajan. His successor, Hadrian, explicitly established boundaries beyond which the Empire had no intention of further conquest. (As an aside, both Emperors were of Spanish, not Italian, descent. Subsequently other Emperors were frequently also not ethnic Italians).

Two economic factors gradually bled of the Empire’s wealth. First, it ran a chronic trade deficit with the East. Importation of silk from China and spices from the equatorial East cost money, and Rome imported so much of it that silk ultimately stopped being a luxury item. Second, because no new land was being conquered, the continual requirement of buying off the loyalty of the legions with each new imperial succession meant that more and more silver and gold had to be paid, which in turn meant either more taxes to raise the money necessary for bribing the military, or for debasement of the coinage so that more of it existed.

At any one time, the debasement of the coinage was not significant. But over time, the chronic debasement meant an economic decline of the Empire. At least partly as a result, the Empire had less means to resist the repeated pressure on its borders from Germanic tribes.

While Strauss stops his narrative with Constantine and the establishment of Constantinople as the new capital of the Eastern Empire, he notes in his brief epilogue that the Western part of the Empire continued to suffer a decline in the resources available to it in order to maintain its power. Finally, in 475 AD, the last, teenage Emperor Romulus Augustulus was forced to abdicate, and the Senate, which survived as an advisory body for the Germanic kings until 600 AD, sent the symbols of imperial power - the mace, diadem, and royal cloak - to Constantinople.

Thus endeth my book reports. I wrote this as a way of recalling the essence of what I learned about the causes of the fall of the Roman Republic in particular. I hope you’ve enjoyed them as well!

Now back to my current reading about the 1200 year history of the Republic of Venice....

The Rise and Fall of the Roman Republic: part 3 of 4: the final hammer-blows


 - by New Deal democrat

“The Republic is nothing, a mere name without body or form.” - Julius Caesar

This is part 3 of my four part look at why the Roman Republic, which was successful and stable for nearly 4 centuries, ultimately fell into tyranny. In part 1 I described the structure of the Republic and the underlying reasons for its fall. In part 2 I described the first 4 episodes of civil war that left the Republic dead on its feet in 78 BC. This part describes the final hammerblows.

5. Pompey and Caesar

The final blows were administered by the “first triumvirate” of Pompey, Crassus, and Julius Caesar, after one last “Indian summer” for the Republic between the death of Sulla in 78 BC and 50 BC. Among other things, much of the power of the Tribunes and the plebeians was restored by 62 BC. But successful generals with privately raised armies whose loyalty was to them personally, together with the lack of a permanent defensive force near the city of Rome loyal to the Republic finally did it in.

While the Sulla and Marius civil war was playing out, Rome continued military campaigns in North Africa, Spain, Gaul, and Asia Minor. Pompey the Great emerged as an excellent military leader even though he was only in his young 20s during these campaigns. Meanwhile Crassus, who became fabulously wealthy as one who used Sulla’s proscriptions to expropriate land, had his own legions. By 70 BC, the tension between the two was so intense that either an ordinary Roman, or several soothsayers, leapt onto the stage of the Forum between them, and begged them for the good of the Republic not to make war on each other, saying that the god Jupiter had so commanded in a dream. Surprisingly, the public shaming worked.

Later, in 62 BC, after leading more successful military campaigns in the eastern Mediterranean, Pompey was feted by a succession of Greek cities as he and his legions made their way back to Italy. Fear that Pompey would march on the city, as Sulla had, gripped the Senate and city of Rome. Fatefully, in a show of good faith, Pompey disbanded his troops and sent them home as soon as they landed in southern Italy. For this good deed, the Senate in effect punished him by refusing to award his veterans any land or money bonuses; and further refused to ratify the political settlements that Pompey had made with the eastern Mediterranean states.

Julius Caesar was the nephew of Marius’s wife, and he was married to the daughter of Cinna. Needless to say, he was identified with the populare cause. As a quaestor in 69 BC, he began the rehabilitation of Marius’s memory as part of the funerals of both his aunt and his first wife, who both died during that year.  As aedile in 65 BC, he erected statues in tribute to Marius’s military victories.

Julius Caesar was an adept general, but he was a remarkably deft politician. The best modern model for his character would probably be that of corporate CEO’s who are described as “high-functioning sociopaths.” He had the ability to maneuver between opposing forces, and anticipate his opponents’ moves in such a way that they made themselves unpopular while making him more popular. Further, he almost always used the carrot instead of this stick. Where other generals or politicians might have executed a wrongdoer, he offered magnanimous public forgiveness, which had the effect of making the opponent indebted to him for their very lives.

For example, when Cicero demanded executions without trial of some of the Catilinian conspirators, Caesar opposed the move, which violated Roman norms, based on the precedent it would set - and indeed the move proved very unpopular while Caesar gained support.  Meanwhile he used his own private wealth to wine and dine clients and potential supporters. In 61 BC, as praetor assigned to Spain, he provoked a rebellion so that he could crush it and use the ensuing Triumph in Rome to launch a campaign for consulship. When Cato blocked this, Caesar proposed that Pompey, Crassus, and himself aid one another’s careers against those blocking them individually.

Note that this was simply a political alliance. But it also ensured that no one of the three alone could overcome the other two combined. This ensured that Caesar became consul in 59 BC. During his year in office, he had a land law passed to reward Pompey’s veterans with land purchased with the treasure obtained from his conquests. He also had a law passed to help tax collectors who were allies of Crassus, who, because the eastern provinces were close to destitute after Pompey’s wars, did not have enough wealth to pay in taxes, a share of which was kept by the collectors. He also passed a law to ratify Pompey’s land and tribute settlements in the east, bringing further tribute into Rome’s treasury. When some of their opponents threatened violence, Caesar, Pompey, and Crassus made counter-threats, causing the opponents to go into hiding. Pompey and Crassus, in turn, made sure Caesar was rewarded with a generalship in Gaul that was likely to and did prove both glorious and lucrative.

The coalition worked well, until 53 BC when Crassus, who was not a shrewd military leader, was lured into an ambush and executed while on a campaign in Asia. In 62 BC, once more serving as consul, Pompey had a law passed making it easier to prosecute “brownshirt” type of political mobs, and he also supported a law, ultimately passed by the Senate, to end Caesar’s command in Gaul in 50 BC.

The Senate tried to head off yet another civil war, by asking both Pompey and Caesar to disband their legions simultaneously. Pompey refused, and after finishing his business in Gaul, Caesar, who was again the paymaster of his own legionnaires, famously crossed the Rubicon. This should have meant his command ceased, but his legionnaires agreed to remain loyal to him.

Once again Rome was marched upon and occupied. Pompey fled, and died in the ensuing civil war. With no military force left to oppose him, Julius Caesar had himself declared “dictator for life” — a capital offense under the law of the Republic, but the only way to ensure that he remained in power and thus could not be executed by political opponents had he allowed Republican government to return. He had himself appointed consul for every year, and in 45 BC took away from the Senate and gave to himself complete control of the empire’s finances.

And as we know from our high school drama classes, on the Ides of March in 44 BC, he was assassinated in the Senate. After his assassination, his grand-nephew Octavian won the ensuing second civil war and had the Senate declare him both consul and Tribune for life, and “First Citizen.” The Republic was officially gone and the Empire had begun.

(concluded in part 4)

The Rise and Fall of the Roman Republic: part 2 of 4: the first hammer-blows


 - by New Deal democrat

This is part 2 of my four part look at the Roman Republic and subsequent Empire. In part 1, I described the structure of the Republic, and its several centuries of stability and success, as well as the underlying causes of its ultimate downfall.

The hammer-blows that rained down on the Republic from the existential dispute between Senatorial oligarchs on the one hand, and Roman plebeians and Italian allies on the other, came in five episodes:

1. The Gracchus brothers - in the 130s and 120s
2. Saturninus - approximately 100 BC
3. Marius and the Italian civil wars 90 BC
4. Marius, Cinna, and Sulla 90-80 BC
5. Pompey the Great and Julius Caesar 50-40 BC

In this part I make a *brief* summary sketch of the first four of the above five episodes. The fifth will be described in the next part.

As each of the above five episodes occurred, there were further and further deviations from the “mas maiorem,” or customs, that underlay the Republic, and increasing problems with legions or private “brownshits” giving their allegiance to their military leader rather than to the Republic itself.

1. The Gracchus Brothers

Tiberius Gracchus was the more temperamental and passionate of the two brothers. Following the passage of the secret ballot in 139 B.C. the Assembly elected him a Tribune in 134. Violating custom, he did not consult with the Senate before bringing an Italian land reform bill to redistribute vacant land (much of which was illegally being farmed by oligarchs including those in the Senate), before the Assembly. A fellow Tribune, who had been bought off by Senate oligarchs, vetoed the bill. Tiberius than vetoed all other bills to try to force his fellow Tribune to relent. When that wasn’t enough, he introduced a bill to strip the obstructing Tribune from office - another violation of norms. Both bills passed when Tiberius packed the Assembly with his supporters.

The Senate, with the power of the purse, voted not to fund the Commission necessary to carry out Tiberius’s land reform. Then, in a twist of fate, a king in Asia Minor passed away without heir and willed his treasury to Rome. Tiberius proposed another bill that the Assembly could disperse the moneys in the will, thus funding his Commission.

At this the lead Senator, the “Pontifex Maximus,” Publius Nasica, led an armed mob of Senators to the Assembly and murdered Tiberius and 300 of his supporters. The Senate followed up by establishing a commission to put Tiberius’s supporters to death, despite the fact that only the Assembly was allowed to impose the death penalty for offenses.

Tiberius’s younger brother, Gaius, was more cerebral, thoughtful, and strategic. He was elected Tribune in 123 BC. He proposed an entire program of reforms, including offering Roman citizenship to the Italian allies, forbidding the Senate from establishing tribunals unless allowed by the Assembly, giving the land redistribution commission final say in boundary disputes, proposing new Italian roads and colonies for settlement, ending the deductions for expenses from soldiers’ pay, a grain dole for Rome’s urban plebeians, and replacing Senators with Equines from the merchant class on juries.

Once again the oligarchs employed another Tribune, Optimus, to veto the entire program. when Gaius ran for an unprecedented third term as Tribune - another violation of the mas maiorem - he was deemed defeated. Unwilling to accept defeat, he organized a demonstration by his followers to intimidate the Assembly. When a follower murdered a Senator’s servant, the Senate gave Optimus dictatorial power to crush the uprising, resulting in 250 killed including Gaius Gracchus.

Two things are important about Gaius Gracchus: (1) the Senate oligarchs refusal to compromise with his program served to exacerbate the inequalities and radicalize future reformers; and (2) gave those future reformers a blueprint for how to put together a coalition of anti-oligarch “populares.”


Interlude — 1.5 Gaius Marius and his armies

Gaius Marius was a pivotal figure in the demise of the Republic. He was a “novus homo,” or “new man,” who came from the rural areas outside Rome, I.e., not a blueblood - think of Bill Clinton as a modern analog. Despite this, he was a military genius, who won almost all his battles, and defeated foreign enemies in Gaul and North Africa. In short, he was the kind of leader the Republic would turn to in a military crisis.  In the course of events described below, he broke yet another tradition by becoming consul for five successive years in the 100s.

Most significantly, in 107 B.C., the Senate made a fateful mistake. As noted previously, Roman legions typically were raised from farmers who had at least some property. The demise of so many small farmers since the overseas Greek and Punic wars meant that this particular resource was nearly exhausted.

There was a revolt in North Africa, the details of which are not important. What *is* important is that the Senate gave Marius permission to raise an army on his own. He recruited especially from the urban and rural poor and landless, who saw the chance to enrich themselves with substantial plunder, and by allying themselves with Marius to have him reward them with land after the war was over. In other words, this was basically a private army whose primary allegiance was to their commander and not to the Republic.

And indeed, after Marius’s successful North African campaigns, as we will see below, his veterans formed a potent political bloc, the appeasement of whom could reap rewards for an able politician.

2. Saturninus and Glaucia

The Roman Republic might well have recovered from the violence associated with the Gracchi brothers. But the reign of terror by the demagogue Saturninus 20 years later started the true downward spiral of violence.

Saturninus was similar to Tiberius Gracchus, in that he was a “populare” demagogue, but he was much more prone to threatening and using physical violence, organizing mobs to intimidate adversaries and advance his causes. As a Tribune in 103 BC, he arranged for criminal trials of deposed “optimates,” had the Assembly pass a law estalishing a permanent corruption and treason court, and along with Glaucia, proposed land grants for thousands of successful legionnaires of Gaius Marius (more on him later), organized a mob to prevent the election of an adversary as consul.

His ally, Gaius Glaucia, a populare Senator, was elected a praetor in 100 BC. He tried to revive the coalition of Gaius Gracchus by offering a similar program benefiting the urban plebaiens, rural farmers and Equestrians, Italians, and legionnaire veterans. Unfortunately for Saturninus and Glaucia, once Marius’s soldiers got their land grants, neither they, nor more importantly, Marius himself, had no further interest in helping with the rest of the populare agenda.

Saturninus ultimately organized another mob to try to keep himself from being expelled from the Senate. The Senate responded in 99 BC by appointing Gaius Marius dictator and authorized him to restore order. Marius arrested Saturninus, who was ultimately beaten to death himself by a mob. Glaucia was also dragged from atop his horse and murdered.

3. Marius and the Italian ‘Social War’

In 91 BC, consul Marcus Livius Drusus, a Senator, again proposed reforms similar to those of Gaius Gracchus. This appears to have been an honest attempt at compromise. Equestrians were offered membership in the Senate if they gave up commerce. He also proposed a new grain dole for the urban plebeians, and citizenship to the Italian allies. He was opposed by Lucius Crassus, who had been consul in 95 BC. Although Drusus appeared to have majority support in the Senate, he was murdered.  Afterward Crassus had all of Drusus’s proposals repealed. This sparked a revolt by the Italian city-state allies, as their attempts to obtain citizenship were always abrogated at the last minute by conservative “optimates” in the Senate, usually by expelling them from Rome on the eve of elections by the Assembly. (In other words, preventing “illegal aliens” from voting!).

Once again, the Senate turned to Gaius Marius, who was broadly a “populare,” to put down the rebellion. As noted above, he was called upon by the Senate to crush Saturninus and Graucia. In 98 BC he “retired,” but could not restrain himself from continuing to seek the spotlight.

To cut to the chase, Marius (who supported Italian citizenship) came through again, defeating the Italians in the Social War three years later, in 88 BC, but the Senate had been sufficiently unnerved that the cost, to bring some of the Italian city-states back onside, was granting the Italians their long-sought citizenship.

4. Cinna, Marius, and Sulla

The violent convulsions which started in about 100 BC reached a climax in the 80s.

Sulla was an “optimate,” and another brilliant military commander who had learned at the feet of Marius. He was consul in 88 BC and was selected to lead a military expedition to Asia Minor. Once again, his troops counted on plunder and a post-war reward of land to follow him. Instead Marius, who had just won the Social Wars, had the Senate strip him of his command. In this Marius was aided by a wealthy politician named Sulpicius, who raised his own private army of 3,000 and handed it over to Marius. Fatefully, when Sulla and his legions learned of this, he called them together and asked them to declare their loyalty to his orders personally. Once again, with visions of plunder and land distributions from a successful campaign as inducements, they agreed. Sulla turned his army around, and for the first time in the Republic’s history, marched on Rome itself.

In response, Marius armed slaves to protect the city, and assassinated allies of Sulla.
Despite this, because Sulla had his legions behind him, and Marius had none nearby to command, Sulla won. He declared 12 men to be “enemies of the State” to be executed on sight, including Marius, who fled in true Huckleberry Finn style (too long to narrate), winding up in North Africa. Sulla declared that he sought to restore the “constitution of the elders,” including that the Senate must approve of any bill passed by the Assembly, and voting rights only for major landowners. To buy off the Equestrians, he added 300 of them to the Senate. Then, surprisingly, he left Rome and returned to his eastern military expedition.

As soon as this happened, yet another demagogue, Lucius Cinna, was elected consul in 87 BC and continued through 84 BC. By now, the tradition by which consuls only served for only one year was shredded.

Sulla had the newly elected consuls, including Cinna, swear an oath not to disturb his reforms. But as soon as Sulla left Italy, Cinna reneged. He organized his own partisan gangs, indicted Sulla for the murder of Romans, and proposed a voting gerrymander in the Assemblies that would give the new Italian citizens overwhelming power.

Needless to say, the urban plebeians who would suddenly find themselves outvoted reacted with fury and revolted. Cinna was stripped of his consulship (another violation of old norms) and fled the city. But he then raised his own legions of Italians and launched his own military attack on Rome, aided by Marius, who had returned to Italy with  6,000 troops of his own. Cinna was restored by the Senate as consul and had Sulla declared an enemy of the State. He also proscribed at least 14 prominent Romans, including the murder of 6 former consuls in five days.

Unfortunately for Cinna, the military genius Marius finally succumbed to age, and as he prepared an attack on Sulla in the east, he was murdered by a centurion as a tyrant.

The enraged Sulla marched his personally loyal legions on Rome yet again as soon as he finished his campaign in Asia. This time he proscribed hundreds of Romans, including a young Julius Caesar, who escaped execution due to the intervention of family friends. Many of those executed were simply large landowners whose assets were coveted by Sulla’s military allies. Sulla again “refounded” the Republic, most importantly stripping the Tribunes of virtually all their power, and forbidding them from holding higher office. It seemed that the “optimates” had finally triumphed. Sulla officially stepped down as consul in 79 BC, but continued to wield power behind the scenes until he died the next year of natural causes.

By 78 BC the Republic was dead on its feet. Virtually all of its norms of office-holding had been swept away. Political mobs using violence to get their way had become chronic. Even worse from a long-term point of view, prominent politicians of wealth were raising private armies that they themselves paid, and whose loyalty was to them rather than to the Republic, culminating in 3 separate military marches on Rome in short-lived dictatorships.

For the next 30 years, however, the Republic had a brief “Indian summer.” Plebeian agitation led to the reinstatement of most of the Tribunes’ powers, the continuation of the bread dole, and the integration of the new Italian citizens into public life. But the problem of politicians having the ability to raise powerful private legions remained, and Rome remained militarily defenseless against them, with no home guard with loyalty to the Republic itself.

(Continued in part 3)

The rise and fall of the Roman Republic: part 1 of 4: Structure and Background


 - by New Deal democrat

“Mortal Republic: How Rome Fell into Tyranny,” by Edward J. Watts
“The Storm Before the Storm,: The Beginning of the End of the Roman Republic” by Mike Duncan
“Ten Emperors: Roman Emperors from Augustus to Constantine,” by Barry Strauss

I’ve recently mentioned that lately I’ve been unable to read most American history books, with their currently unwarranted chipper optimism. Instead my recent reading has focused on other periods of crisis.

One question I’ve been considering is, just how rare, and how stable have Republics historically been? There are few antecedents for the experience of the US, because it has aspires to both be a Republic under the rule of law and simultaneously a superpower.  In fact I believe there are only four, in reverse historical order:
  1. The British Empire (yes, I know, it’s technically a monarchy, but it has been a parliamentary democracy really ever since the Glorious Revolution 400 years ago). 
  2. The Dutch Republic (I’m not sure if this really qualifies, since it was more a confederation of principalities, but it was styled a Republic, and it did have global interests.)
  3. The Republic of Venice (this is a dark horse contender, but this Republic lasted almost 1200 years, from roughly 600 A.D. until it was conquered by that other “republican,” Napoleon, in 1797).
  4. The Roman Republic.
In these four posts, I’m going to summarize what I’ve learned about the Roman Republic from the three books that lead this post. 

While we’re all familiar with Julius Caesar crossing the Rubicon, and probably all had to read Shakespeare’s Tragedy of that name (but really about Brutus and Cassius) in high school, I don’t think much attention has been paid in modern education to the Roman Republic, which lasted 450 years - almost as long as the subsequent western Roman  Empire - and was avowedly the model that inspired the Framers of the American Constitution. None of the books that have come out in the past few years, to my knowledge, have discussed either the Roman Republic or other historical antecedents to the US. I believe studying the rise and demise of the Roman Republic, which during its existence was extremely - probably too - successful, is well worth the effort.

Without intending so, I read the above  three books in reverse chronological order above. “Ten Emperors” was first, followed by “The Storm Before the Storm.” Unfortunately this latter book (in my opinion) wound up being a chronological blow-by-blow vomiting of not well organized facts. It desperately needed a list of “dramatic personae” with at least a couple of lines describing the most prominent 20 or 30 individual’s role, so that when they re-appeared after a 30 or 80 page hiatus, I could recollect who they were. It also needed an initial chapter setting forth the basic governing details of the Republic, and most importantly the roles of the Senate and the Assemblies. In the end it left me so unsatisfied I went back and found “Mortal Republic,” which was a much more orderly and understandable if less detailed treatment. 

If you are interested in the material, I recommend you read “Mortal Republic” in segments, and then read so much of “The Storm Before the Storm” to fill in the details until you reach the same chronological point. Once you do that, when you start the final book, you will see that the process of Imperial succession in the Empire was very much like the power struggles in the last 60 years of the Republic, and in particular sets forth Augustus’s programme and genius in more detail.


To cut to the chase, the Roman Republic, which was previously quite stable (as Republics, once they last a generation or more, tend to be), was toppled by a series of hammer-blows that fell over roughly a 100 year period. The shortest version is that the type of factional political violence that brought down the Weimar Republic in 10 years took 100 years to infect and ultimately destroy the Roman one.

There were three levels of causes for this fall, in order of importance:

  1. The de facto requirement that all senior magistrates and in particular the consuls (analogous to Presidents) be military commanders, who frequently raised, and increasingly paid for, their own armies.
  2. The increasing breaches of “mas maiorem,” or the customs and norms by which the Republic had operated, on all sides.
  3. The split between the oligarchical “optimates” who dominated the Senate on the one side vs. the “populares” or ordinary Roman plebeians who dominated the Assemblies, and also the Italian allies who were not Roman citizens, on the other. 

More basically put, #3 was the substantive source of disagreement over which all parties were willing to go to extremes; #2 was the procedural unraveling of the manner of government; and #1 over time ensured the rise of what we would now call “caudillos,” or political generals, who had the force to overthrow it.


Both histories I have read suggest that the “turning point” where the stresses started to undermine the Republic was after its greatest triumph: the defeat and obliteration of Carthage after the third Punic War.

The structure of the Roman Republic 

From its founding as a trading point on the Tiber River until roughly 600 B.C., Rome was ruled by Etruscan kings, who were then overthrown and the Republic was founded. On a broader historical scale, it seems that Republics are actually pretty sturdy forms of government once their institutions take root after a generation or two. That’s good news at the present, where at very least, for example, Russians and Iranians are getting used to the concepts of having elections and courts.

The Roman Republic was a system by which “Assemblies” of the tribes of Romans directly elected the executive officers of the Republic for one year terms. Meanwhile the Senate, essentially a council of notables, gave direction to those executive officers in the carrying out of their duties. The lowest level official was a “quaestor,” basically an aide de camp and accountant for a legion; followed by aedile, in charge of religious observances and festivals. The next rung higher was “praetor,” similar to a colonel or brigadier general in an army, who also acted as a “president pro tempore” when the highest officials were absent. Finally, the highest office was “consul,” of which two were chosen every year, as co-chief executives, lead prosecutors, and commanders-in-chief of the legions. Upon completion of their terms, consuls joined the Senate.

Another important office was that of the 10 Tribunes. These were explicitly open only to plebeians, and were designed to protect their interests. Each of the 10 Tribunes could propose legislation before the Assemblies, and veto legislation proposed by others. Further, none of the other Tribunes could override the veto of any single one. As we’l see, this chokepoint proved a weakness in the structure of the Republic. Additionally, there were also “military tribunes” in the legions, who represented the interests of the soldiers. 

Finally, in case of emergency the Republic allowed for the office of “dictator.” Most importantly, for the first 400 years of its use, this office had a strict 6 month time limit, which was faithfully respected. At the conclusion of the 6 months, the dictator was required to hand back power to the normal offices, and the status quo ante structure of government was to resume. The most famous of these was Cincannatus, who  returned to his farm after his six month office expired. 

So powerful was the civic pride in the Republic that, when the Macedonian Pyrrhus (of “Pyrrhic victory” fame) tried to bribe a relatively poor Roman general, Fabricius, Fabricius refused by rejoining that the Roman Republic provided those who went into public service with higher honors than mere wealth could supply. In any event, by 300 B.C. Rome had brought all of Italy except for the far north under its domination. The other Italian city-states were called “allies,” but really they were tributaries, their form of tribute being the provision of soldiers to fight in Rome’s legions. Upon reaching adulthood, Roman males owed 10 years service in the legions. Importantly, the pattern was the planting of crops in the early spring, then going off to fight in the legions’ campaigns during the summers, and returning to harvest the crops in late autumn.

In any event, the accounts agree that matters began to change after 146 BC, when Rome simultaneously was victorious over Carthage and also Corinth in Greece.  Both treatments of the Republic pick up at that  historical turning point. Little known fact: Carthage was also a democracy, in fact the Romans considered it “too” democratic. Someone go tell Tom Friedman that two countries having democratic institutions does not mean that they all go happily ever after to McDonald’s.


But it was with the conquest of Carthage, that by happenstance coincided with the sacking of Corinth in Greece, also by Rome, that the scrappy little Roman Republic, which was founded roughly in 500 B.C., and had grown to the dominant power in Italy such that the other city states on the peninsula were its inferior “allies,” simultaneously turned into an empire, dominating the Mediterranean from Spain to Greece on the European side and present day Algeria and Tunisia on the African side.

The inhabitants of those unfortunate cities who weren’t slaughtered were sold into slavery, and the treasuries of each were sacked, the riches transported to Rome. Rome also thereby came into possession of extensive silver mines located in Carthage’s lands of  present-day Spain. In short, overnight Rome became filthy rich as well as controlling an  empire in the central and western Mediterranean.

But this very wealth permanently upset the balance between the landowning oligarchs in the Senate vs. the ordinary urban plebeians and rural farmers. For it was the Senate that had the power of the purse, and thus the power to distribute the land, gold, silver, jewels, slaves, and other loot plundered from the vanquished states, as well as the new precious ores mined in Spain. And, unsurprisingly, they allocated it to themselves. Even worse, because the wars in North Africa, Greece, and Spain lasted years, the legionnaire farmers spent multiple years away from their fields. When they returned home, they were victors, but their farms had fallen into ruinous disrepair. For all intents and purposes, they had to sell — and the buyers who had money were frequently none other than the wealthy Senators.

A second form of gross inequality was between Roman citizens and their Italian allies. Because while the allies were vital to Rome’s military success, the allies could be treated as slaves if the Romans wished to do so. 

A final form of inequality affected the affluent or wealthy merchant class, called variously Knights or Equestrians, because they could afford to own horses, and thus serve as cavalrymen during military campaigns, depending on the account. But because they were not “old money,” their path to the top rungs of power was blocked by the oligarchs who controlled the Senate.

The huge inequalities just described gave rise to seething resentment by both the urban and rural plebeians as well as the Italian allies and the Equestrian class as well. The essential story of the Roman Republic between 146 BC and its fall a century later was the refusal of the oligarchs who usually controlled the Senate to make any significant compromises to this state of affairs, and the increasing violence used both by the opposing classes to wrench change, and the oligarchs to resist it.

(Continued in part 2)

Saturday, October 19, 2019

Weekly Indicators for October 14 - 18 at Seeking Alpha


 - by New Deal democrat

My Weekly Indicators post is up at Seeking Alpha. Although the economy, especially in the producer sector, is quite weak right now, the indicators in all time frames are, in the aggregate, positive.

As usual, clicking over and reading should bring you right up to the moment on the data, and rewards me a little bit for my efforts.

Friday, October 18, 2019

An important update on the yield curve


 - by New Deal democrat

For the last 10 months, readers of the financial press have been bombarded with stories about the inverted yield curve, where (some) longer term interest rates are lower than shorter term interest rates. I track them too! But they are by no means my only forecasting tool.

In any event, in the past several months and weeks, the yield curve has resumed a much more normal configuration. So does that mean we are in the clear?

It depends which measure you are paying most attention to. Which has always been an important caveat, because the inversion of the yield curve has, with the exception of about one week several months ago, always been partial - i.e., at least one “infallible” indicator must have been wrong.

My “just the facts, ma’am” look at what the un-inversion of the yield curve has meant over the past 50 years was posted at Seeking Alpha.

As usual, clicking over and reading rewards me just a little bit for my efforts.