Items filtered by date: August 2013

Institutional Fraud: Ossifying the American Empire

Monday, 26 August 2013 04:02
America continues to slog through the same path as our Roman ancestors, as it allows institutional forces from within to destroy what forces from without could not destroy

Fraud takes many forms, oftentimes it is disguised and deeply embedded within the cultural, economic or social systems that most take for granted. Other times, fraud is overt, specific and perpetrated by outside forces. The police, our local and federal governments, private investigators, or internal audits target the obvious, non-institutional frauds, whether personal, financial, social or economic.

Examples of these overt frauds are criminal activity, Medicare fraud, insurance fraud, personal infidelity, or the failure of corporate governance. These types of fraud, though, are relatively easy to detect and spot, and are generally correctable given sufficient remedial activity. Institutional fraud, on the other hand, is pervasive and endemic to our society.

History often repeats itself, and from it America can divine its future, or at least one version of that future. A brief history lesson will highlight the perils of ignoring deep institutional fraud domestically and the risks associated with it. The Roman Empire concerned itself with empire building, marching vast armies for years through conquered territories, but ignored the institutional decay that was ossifying the Roman homeland. Ultimately, it was not merely enemy armies that collapsed the empire, but the collapse of economic, social and moral structures deep within the empire.

Likewise, the United States continues to project formidable military and economic strength abroad, and is perceived as a protector of Western values and cultural institutions. This role protects the oligarchic military industrial complex and the enormous profits derived from these missions, but much like the Romans ignores the enormous costs and social impacts inherent in maintaining this infrastructure. The Chinese, much like the barbarians that faced the Roman armies, threaten to broach our economic and military borders not because of advanced technology or superior skill, but because of sheer brute strength and population size.

Similarly, the German Wehrmacht, the most formidable military machine ever assembled, was overwhelmed by waves of Russian divisions in World War II.  In spite of possessing advanced technology and brilliant military tacticians, the Germans were slaughtered by waves of Russian soldiers, even as Germans killed 20 Russians for every slaughtered German. Both China and Russia currently have a near endless supply of labor, both militarily and economically, with which to rout American interests in the very near future.

Why is this history lesson critically important to us at this juncture? Because, as a nation facing some steep challenges economically, socially and culturally, we have chosen to ignore the deep institutional fraud that is fraying our homeland institutions. Instead, we continue to see risks only abroad, and ignore the destruction of our own homeland. These risks will consume us long before the Chinese or Russians have imposed their will.

 

Category: Wall Street Fraud