In the dying days of the Roman Empire, the historian Juvenal said the people had lost their taste for art and philosophy. They cared only for panem et circenses - bread and circuses. Give them a cheap loaf and a free show in the Colosseum featuring Christians, lions and gladiators and they were content.

We now witness panem et circense, American-style Publicly, Washington pretends to abhor publichangings. In fact, it relishes nothing more than good, gory bloodletting. To see the mighty squirm, and perhaps fall, becomes an enthralling, if unseemly, spectacle. Politicians, bureaucrats and journalists strike a careful air of dispassion as they go about their daily jobs, and then rush to exchange the latest and juiciest gossip in private.

That's why the Bert Lance affair has gripped the capital these past weeks. It contains all the elements that everyone here recognizes as the real Washington, not the fictional junk that often passes for a form of truth about the city.

Lances is about high places, insides and outsiders, people on the rise and fall, public arenas and private corridors. The figures we have seen these past days are instantly familiar, even if the names are not: the tired bureaucrat seeking to protect his job, or pension, by trying to please his superiors; the earnest young governmental attorneys whose collective sense of propriety is so clearly offened by appearances of official favordorm.

The other parts of the picture are also familiar: the confidants and counselors to the mighty, who make the wheels turn; the realities of the regulatory process, the confirmation process, the investigatory porcess, with all their weaknesses laid bare; the workings of the press the lighting rod of the city, which everyone in authorityboth condemns and courts, depending on the selfinterest of the moment.

And, of course, Lance covers many other areas of the real Washington: personal ambition and political advice, intrigue, influence, plotting and strategy. In the end, though, all these are secondary. Lance comes sown to one thing.

It was Calvin Coolidge who said, in a phrase that endures, "the business of America is business." The business of Washington is power.And power is what Lance is all about.

His imposing personal figure and problems aside, Bert Lance's fate is important publicly only in how it affects Jimmy Carter. Personally, Lance probably will be long forgotten while the case that bears his name will be studied for clues it offers about how Carter handled his presidency.

Presidents often have problems with intimates. Truman had his Harry Vaughan, Eisenhower his Sherman Adams, Johnson his Booby Baker, Nixon his Haldeman, Ehrlichman, Mitchell and many more. Now Carter knows how they felt.

But Lance is different. The questions about him have nothing to do with malfeasance in office, nor with any claimed abuse of his official position and responsibilities. At the heart of the difficulties are questions about Carter's judgment, promise, standards and reactions to political problems. In particular the Lance affair focuses on the way Carter and the Georgians operate in The White House.

This is not the time for a final assessment on Lance, but it's fair to say the handling of the problem has been disquieting to many in the White House. The distinction here is between the Georgians and the others. To some not in that close circle around Carter, the mistakes made over Lance stir unpleasant memories. They recall the presidential campaign days of last fall when Carter's huge lead and seemingly invincible position melted away as one gaffe followed another.

"It's just like the campaign." one aide said. "When things are going well they are going very well indeed, and when they're going bad they couldn't be worse."

Bad information, bad advice, misplaced loyalty-these are some of the other criticisms you can hear. As someone said bluntly, "From a political viewpoint, it's been a disaster."

Most disturbing to such people is what the affair seems to say about the sound judgment of Carter and his intimates. "It's either an error of naivete or stupidity," was one view. "Whoever read that comptroller's report and declared it exonerated Lance was just plain stupid. There's no other way to put it, Stupid."

Certainly, there have been serious misperceptions and misreadings throughout the affair. And this from people, and a politician, who had been so correct in judging the feelings of a majority of Americans a year ago. The real mystery is how the Carter White House permitted such a situation to get entirely out of hand. For supposedly shrewd judges of the national mood, it's astonishing to see the way they misunderstood howthe Lance case would appear to the public.

"Their putting on that 'everybody-does-it' song just doesn't play." was the bitter comment of an aide who frankly expressed amazedment at the failure to remember, seemingly, the lessons of Watergate.

Even more surprising is the obvious misreading of the public's reaction to bankers and big dealers like Lance. It doesn't take a public relations genious to know that many people resent the hat-in-hand approach forced on them in their day-to-day dealings with financial institutions. Older Americans remember all too vividly the Depression and the banks. Younger ones can't casually overdraw their accounts. If they do they are likely to feel humiliated by the ensuing experience.

The hope for the Carter presidency, especially, was to stress different standards of public and private conduct than before.

How much damage all this has done to Carter and his administration is debatable. It certainly has hurt. It will be worse if the reaction of someone who works for the President is in any way typical. When this person was asked whether the episode has affected feelings about Carter personally, the quick answer was:

"Yes, sure it does. He's less than he had seemed to be before."

One of the most intriguing views about how all this came about puts the problem in fascinating perspective.

It's that whatever mistakes were made about Lance were mistakes of the heart. Carter and his closest aides were guilty of too much compassion.

"I know from talking with them that they felt they were in one of those 'Profiles in Courage' situations," one person said.

He meant they believed Lance genuinely was a man wronged. They were not going to allow political expediency to force them to turn Lance over to a lynch mob. that may well be their most honorable, and admirable, desire. But if so, it's not enough.

As the senators have shown last week, they may have an appetite for the Roman arena, but they lack the ability to carry out the execution.

The Lance affair suggests something else critics who said Carter and his intimates haven't yet mastered Washington were right. The question now is what they're learning, and at how painful a price.