Neely Young: Cicero's Lament
“The budget should be balanced, the treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.” – Cicero, 55 BC.
This quote was the opening line in a speech by economist Dr. Albert Niemi, dean of the business school at Southern Methodist University and former UGA business school dean. He addressed more than 350 people who gathered in Cobb County recently for a seminar sponsored by The Bank of North Georgia.
You may not agree with his remarks, but I think you will find them interesting.
This recession, which Niemi says started last July, should be long and deep, and will continue until the middle of 2010. He believes the coastal southern region and Georgia in particular will be one of the first areas to emerge certainly not unscathed, but stronger than the rest of the nation. Strong immigrant and natural population growth will turn the tide.
He says 55 million people will move to the United States in the next 20 years and contrasted the growth rate in America with those of Europe and Japan, which have been stagnant for the past half-century.
“France, for example, has remained at 55 million people for the past 50 years and will remain that way in the future,” he says. “America will add the population of France in the next 20 years.”
Sixty percent of that growth will be in five high-growth Southern states – North and South Carolina, Georgia, Florida and Texas, which he identifies as red states. The rest will be in Western red states such as Nevada and Washington.
Niemi defines red states as areas where the population will grow more than 50 percent above the national rate. Blue states, those that will fall 50 percent below the national rate, include Ohio, Illinois, New York, Pennsylvania, Louisiana, Mississippi and Alabama.
Niemi says blue, low-growth states typically favor federal assistance and have Democratic legislatures. Red, or strong-growth, states have Republican legislatures and oppose government interference.
He believes the main cause of this recession is credit and worries about when the economy will turn around.
“The housing and commercial building (which is the next shoe soon to drop) woes are all symptoms of the credit crunch. We have had too much of it and it is going to take a while before we get all of the excess out of the system,” he says.
It might be five years after this recession has turned around before we see normal growth again, he says.
Niemi also believes taxes are too high. He estimates that most of those who were in the audience pay 50 percent of their incomes in taxes to various governmental entities.
He thinks corporate taxes are damaging to the economy and says 60 percent of the U.S. population pays 97 percent of these taxes, while 40 percent pays none at all.
He speaks of an ever-widening gap between rich and poor and believes in the Trickle-Down Theory. “Cut taxes and companies will reinvest the tax saving to create jobs,” he says.
He worries the new government will increase, not cut, taxes and drive us deeper into recession.
In the future, Niemi says, people of color will make up 65 percent of this country’s high school population. The fact that African-American and Latino students don’t go college at the same rates as white and Asians will eventually send even more jobs overseas. “This has to be fixed,” Niemi says. He believes President-elect Barack Obama will be a particular inspiration to people of color.
Cicero’s words ring as true today as it did in his time, 55 years before the birth of Christ. But early in 45 BC, Rome balanced its budget and reduced public debt; people began to work. It took a revolution to accomplish this – the Republic was turned into a dictatorship run by Julius Caesar.
The lesson Niemi was trying to convey was that our hard times will end. Let’s hope the end is sooner, rather than later.