Aesop Revisited: Unsustainable Spending Does Not Equal Freedom

No.: 
39

The American economy could operate more safely by looking to the essentials in Aesop’s Fables than by following Irwin Kellner. Mr. Kellner’s spending advice might pump up the stock market for a short time — long enough to allow elites to dump unwanted holdings at better prices — but would serve to weaken the U.S. relative to other nations like China. Furthermore, added borrowing will increase the national calamity once there is insufficient demand for Treasuries to support the public debt.

Aesop, unlike Kellner, did not provide counsel that sounds like ancient Balaam. In the fable of the goose that laid golden eggs, Aesop taught that greed destroys sources of good, and that those who want too much, too fast, may lose it all. The hazards of covetousness are highlighted in other Aesop fables as well, evidence that ancient Greeks faced similar pitfalls to the ones that vex Americans today.

Balaam of the Bible predates Aesop, his counsel to Balak — myth or not — providing insight about dangers that face careless nations. According to the biblical story, once Balaam’s eyes were full of greed, he counseled Balak to entice ancient Israelites with various immoralities, the idea being that people excessively focused on pleasure do not take adequate care of their culture and institutions. Thus impaired they become vulnerable for exploitation by foreigners. There’s no rocket science here. The smartest big bucks in ‘deerdom’ are vulnerable to hunters during the rut.

America is in a rut — a rut of pleasure seeking. Many football nuts are in a world of their own making during football season, the same situation evidenced in many other entertainment categories. The merchants of pleasure may or may not have taken a few chapters from Balaam’s counsel, but America looks like they did. The results are predictable: Civic duty has gone to ‘hades in a basket’ in many places, while vast segments of the electorate can tell you more about movie stars than their U.S. Constitution. It says a lot that Mr. Kellner thought he could keep his credibility while urging “more spending” as the solution for reckless debt. Do elites really believe that the public can be persuaded by short-term benefits regardless of long-term costs?

Many MarketWatchers know that Mr. Kellner had a big stake invested with Mr. Madoff; he may feel an equally large stake in defending the interests of fellow elites. As always, elites want working class people to spend and borrow aggressively, creating more profits for those with corporate ownership and more debt-holding wealth for large creditors.

What would happen if Thomas Jefferson were around to debate Mr. Kellner? Jefferson, Madison, Adams and other Founders knew a great deal about the achievements, stagnation and downfall of empires. Even a modest reading of their work reveals their conviction that nations cannot long endure once they’ve lost their wisdom. Unfortunately, we cannot remember the lessons in Aesop’s fables, let alone the Declaration of Independence or the Federalist Papers.

One of Aesop’s fables is about a challenge between the North Wind and the Sun. The Sun wins the day by showing that warm persuasion can be more powerful than brute force. While Aesop and Balaam are gone, their legacies abide alongside other stories that impart good warning. If it took a Trojan horse for Greeks to get inside the mighty walls of Troy (so as to bring that unconquerable city into submission), it might take the persuasion of materialism and unsustainable debt to conquer the once independent USA.

How can a mighty nation like the USA be brought down by force? Even if dragged down for a season, it would shake off its shackles, determined to reacquire freedom. But a nation can fall from within. Indeed, a downfall that does minimal damage to infrastructure, buildings and capital assets is the most appealing to ambitious financial elites. Remember, when finance is the weapon, no singular nation-state is needed as the launching site for conquest; that is, as long as free trade principles create a world without borders to the power of mega-capital.

What foreign nation could conquer the U.S. militarily? American pride and ingenuity would not allow it. Even a temporary intrusion would be pushed back eventually. On the other hand, international banking elites could take leadership control of the U.S., influencing her laws and reaping her profits by applying Aesop’s wisdom to Balaam’s counsel. The trick to make the populace vulnerable, then position CONQUEST AS A RESCUE — a money-backed new age ethos being the solution to economic woes, fears of terrorism, and political incompetence.

It does not take conspiratorial theory to realize that elites want power, many working together as allies as long as it suits their mutual benefit. If elites can get the national media to criticize U.S. government until people lose their trust in politicians and parties, financial elites are one step closer to grasping the reins of government. This happens because once the reins are perceived as dropped, the confused masses are helpless to reformulate government.

One thinks of Jon Friedman’s argument that after a short respite, it will be time for the media to start highlighting the failures of Barack Obama, as they have done with every other president for the last four decades (MarketWatch, Jan. 19, 2009). Likewise, if economists like Irwin Kellner can induce the next administration to spend excessively, governmental legitimacy will fall further. People who believe their politicians are crooks and their form of government outdated are ripe to fall prey to super-elites in the midst of frightening economic circumstances. If people will capitulate to a Kellner-style economic policy now, what will stop people from surrendering to elites’ terms of financial rescue when the going gets tougher?

Ultimately, the strategy for super-elites (i.e., not traditionally prosperous Americans who earned their wealth the right way) is to create such utter contempt and frustration with illegitimate policy and wasteful administration that people will cry for deliverance. At this point super-elites emerge with recommendations of how freedoms can be fixed, liberties sustained, imbalances corrected, excesses overhauled, and dangers avoided — excesses and dangers that these elites helped put to seed. To superficially informed masses, the recommendations may sound like principled populism, the masses no longer able to identify a wolf in sheep’s clothing. Thus voted into power by broad public assent, super-elites can hope to create an enduring plutocratic empire. One year ago such a scenario might have seemed unthinkable to many Americans. But careful evaluation of the path we’ve gone down demands thoughtful attention to this possibility.

What can people do? For starters, people should vote for politicians who will stand by the principles that work in private life. When debt gets too high, people need to work more hours and pay down debt. Nations should do the same. Plus, we should work smart, emphasizing the type of productivity that conserves resources and builds public capacity. Other steps are warranted as well, especially action to cut Wall Street out as much as possible. Wall Street is a compensation scheme that siphons off countless billions from productive enterprise. Our national creativity in dealing with the mistaken financial architecture of Wall Street will suggest a great deal about our ability to prudently address other problems.