Guest Post: The Eroding Premium On Truth And Trust

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The premium in America has shifted from truth to self-serving distortion, and from trust to manipulation.

The premium we place on truth and trustworthiness is self-evident. Truth is uniquely productive feedback from the real world. Truth (including factual data) is indispensable,  for it alone enables us to correct errors, learn from mistakes and improve our effectiveness and communication.
We pay a premium for trust because the cost of dishonesty and artifice is steep.Would you pay more to buy a used car from someone you trust? If you place no premium on trustworthiness, then you buy the "great deal" used car you found online: oops, the "new" battery was spray-painted black, the crankcase leaks, the engine is shot and doesn't pass smog, and the certificate of ownership is forged.
The premium on truth and trust is eroding under the constant onslaught of officially manipulated data and markets, and a vast array of distortions and propaganda designed to serve the interests of ruling Elites and key constituencies.
We all know the negative premium placed on fact: telling the truth will get you fired. And not just in the corporate world: politicians from the President on down all worship at the altar of the carefully distorted unemployment rate.
The officially sanctioned lying and manipulation are now shameless. Never mind that millions of people have become statistical phantoms (i.e. not in the workforce) to generate that low rate, and college graduates working 3 hours a day (if they're called in at all) are gleefully counted as employed, as if there is no difference between a full-time job and a marginal one.
President Obama is touting rising auto sales as proof of the "recovery" (and implicitly, of his wise stewardship), studiously avoiding the fact that these stupendous auto sales are the result of offering low-interest rate auto loans to marginal borrowers with near-zero collateral (i.e. skin in the game).
How did blowing a credit bubble and securitizing the debt turn out last time?
Never mind: here we go again. Via Doug Nolan at Prudent Bear:
Springleaf Finance Corp., the lender to borrowers with poor or limited credit, sold $604 million of bonds last month backed by personal loans secured by household goods from furniture to electronics, its first such deal. Demand for riskier asset-backed bonds has grown as the Federal Reserve holds its benchmark interest rate at almost zero for a fifth year. Sales of securities linked to subprime auto loans doubled to $4 billion in January from a year earlier.
Manipulation and carefully crafted distortion erode trust, not just in the individuals employed to repeat the lies but in the institutions that issue them. The ruthless pursuit of self-interest is now the norm; truth is a terribly risky disruptor that must be hidden, masked or countered with plausible lies.
As a nation, we're like the obese person who looks at himself in the mirror and sees his body as normal--the distortion of truth is so complete that we literally no longer recognize reality. Untruth no longer arouses any moral indignation; we are either too jaded to care, or our moral compass now spins aimlessly from one manipulation to the next.
There can be no trust if there is no truth. How can we trust people who lie to us constantly, who issue one self-serving justification after another for their own parasitic predation? We cannot. How can we trust institutions whose credibility now rests on the continuation of lies that are so embedded in our financial sector and State that their collapse will bring down the entire house-of-cards debtocracy? We cannot.
The premium in America has shifted from truth to self-serving distortion, and from trust to manipulation. This spiritual and moral rot will end gloriously, have no doubt, for the stock market's permanent ascendancy dissolves all other narratives.

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kliguy38's picture

You can't erode ZERO

MillionDollarBonus_'s picture

This is all pretty rich coming from libertarians who still can't admit that trickle down economics has failed.

The Juggernaut's picture

@MillionDollarBonus_: Trickle down economics is the same as trickled down from DC and from the Fed.  Regardless of where it comes from those people that hand it out and regulate it have the power.  You're a fascist, MillionDollarBonus_.

Anusocracy's picture

To a psychopath, a lie is more important than the truth.

Welcome to the modern world.

Doctor of Reality's picture

So economics backed by lies is sustainable? Ask some average North Koreans how great their lives are; since they're the best example of a society completely dominated by lies.

astoriajoe's picture

Can't we just send the squid in there. We'll own the that piece of undeveloped real estate in 10 years, no shots fired.

Anusocracy's picture

"The ruthless pursuit of self-interest is now the norm;"

That was true in the alpha-male social hierarchy of the hunter-gatherers, that was true in Pharonic Egypt, that is true in North Korea, and that is true in the US.

It's the modus operandi of government.

The Abstraction of Justice's picture

Productivity and efficiency gains all go to the cabal. A chinese sock making, making 50,000 socks an hour, with a machine, makes the same wages, in relation to the European average, as his forebearers did in the 18th century making 5 per hour.

Jean Valjean's picture

BINGO!  I have not heard others express this.  This is done through inflation of the currency and is the source of all banker wealth.  Prices of products would go down due to innovation but bankers print free money for themselves to spend first which causes moderate inflation (when they are not being greedy).  People don't notice since they can still afford the things they want.  However, this negatively impacts society as a whole.

The Abstraction of Justice's picture

It is one mechanism, but it is also done at the mangement level. The sock maker gets paid minimum wage however many socks he produces. He does not get a cut. Socks that sell to Western markets at 2 pennies each end up on the streets of Europe and the United States at a Euro/$/Pound. That 98 pence is largely the middle men and management. Now if the sock maker were to get a penny per sock, he would be laughing, but of course, why should he, when the management can make an extra penny per pound. The rich get 1% richer so that the poor will never see anything. Perhaps such employers value themselves, as human beings, by the ratio of income between themselves and their employee.

Jean Valjean's picture

Well, I'm an employer and I don't value myself that way.  I do know however that any inovations that we (I and my employees) come up with are immediately grabbed by currency inflation and customer threats to go with an offshore vendor.  I can guarantee they don't go to my salary, the bottom line, at any greater rate than they go to my employees wages and benefits.

The Abstraction of Justice's picture

Rare employer. Hope you survive the financial apocalypse. We need moral people on the other side.

Yen Cross's picture

   MDB,  that just goes to show how insane your pal Obunga is. He's $7 Trillion into trickle down economics.  Chew on this for awhile.

Kayman's picture

Trickfuck economics or Trickle down economics. Is there any difference?

To the point of the article, without trust, which indeed, is a function of Truth we will be in this stagnation for a very long time.

And as the members of the Politburo meet again in Washington, perhaps we could remind them to read Solzhenitsyn's Gulag Archipelago, especially during the chapter on the party members fearing to be the first person to stop clapping as the Party Boss arrived; people kept clapping until they fell over. Absurd ? Yeah, like the world we occupy today.

Eat your Pablum! But sir, it looks and tastes like shit. I can assure you it is not shit, so get eating.

Vic Odd's picture

Trickle down economy cannot truly be tested when governments grant corporate welfare, which tilts the playing feild in favor of the TBTF corporations and banks. Libertarians believe a TRUE free market, with minimal government intervention or favoritism, while not perfect, is preferable to Oligarchy, Socialism or Fascism 


Dangertime's picture

Failed at what?  To do the impossible and remove poverty?


Poverty is a choice cupcake.

insanelysane's picture

QE is trickle down economics and O and the FED can't get enough of it.

illyia's picture

MDB - that makes no sense... Were you around during Reagan? Do you remember...

I guess not.

It must be the propaganda...

BullionTweet's picture

Semantics but but you can definitely erode to ZERO. You can't erode below ZERO (note: unless using current BLS stats).

LawsofPhysics's picture

Captain obvious is back.  No shit Captain, when fraud is the status quo, possession is the law.  Get your tribe in order and hedge accordingly, because nothing changes until the issue of moral hazard is addresses and real consequence for bad behavior returns.  Could be a while folks...


...if history is any guide, people around here know that I am betting that the supply lines break first.

Political_Savage's picture

Thank you for not responding to MDB

Kayman's picture

moral hazard ? Why do you soft-shoe crime and deceipt and continue to call it moral hazard?

Cheating people and robbing them through inflation is a crime. The great engine of growth in the American economy seized up at least a generation ago. All we have left is borrowing against that illusion and selling parts offshore.

venturen's picture

I read in the New York Times that you are wrong. Krugman told me so!

Mercury's picture

 Sales of securities linked to subprime auto loans doubled to $4 billion in January from a year earlier.

The path of least resistance is to avoid acknowledging certain truths so as not to suffer the political and social consequences. Go ahead and jump up and down about how risk is being mispriced and dig into the actual loans. You'll be called a racist and a whole bunch of other crap completely irrelevant to the actual subject under examination.

How much capital is being wasted or shady practices going unnoticed beneath the beard of “being green" ?

venturen's picture

Obama's whole life is a fraud by the way. 

The Abstraction of Justice's picture

Looks like somebody is clicking down on everything and anything remotely truthful.

monad's picture

A properly seated grand jury can convict anyone including the TOTUS. The penalty for TREASON is DEATH

Lost Word's picture

Tyrant Of The United States ?

monad's picture

Tom from Pudnhead Wilson

The Abstraction of Justice's picture

Now that bitcoin millions is quickly vanishing from my dreams, with each passing hour, time to invest my time and money in a video game, 'The Zionist Jimmy Saville Murders.' Any investors?

Uber Vandal's picture

The song Liar by Henry Rollins sums it all up:

You think you're going to live your life alone
In darkness and seclusion... yeah, I know
You've been out there and tried to mix with those animals
And it just left you full of humiliated confusion
So you stagger back home and wait for nothing
But the solitary refinement of your room spits you back onto the streets
And now you're desperate and in need of human contact
And then you meet me and your whole world changes
Because everything I say is everything you've ever wanted to hear
So you drop all you defenses, and you drop all your fears
I'm perfect in every way
'Cause I make you feel so strong and so powerfull inside
You feel so lucky
But your ego obscures reality but you never bothered to
Wonder why things are going so well
You want to know why?

'Cause I'm a liar, yeah, I'm a liar
I'll tear your mind out, I'll burn your soul
I'll turn you into me, I'll turn you into me
'Cause I'm a liar, a liar, a liar, a liar, a liar...

I'll hide behind a smile and understanding eyes
And I'll tell you things that you already know so you can say:
I really identify with you, so much
And all the time that you're needing me is just the time
That I'm bleeding you, don't you get it yet?
I'll come to you like an affliction then I'll leave you like an addiction
You'll never forget me... you wanna know why?

'Cause I'm a liar, yeah, I'm a liar,
I'll rip your mind out, I'll burn your soul,
I'll turn you into me, I'll turn you into me,
'Cause I'm a liar, a liar, liar, liar, liar, liar...

I don't know why I feel the need to lie and cause you so much pain
Maybe it's something inside, maybe it's something I can't explain
'Cause all I do is mess you up and lie to you
I'm a liar, ooooh, I'm a liar
But if you'll give me another chance I swear I'll never lie to you again
'Cause now I see the destructive power of a lie,
They're stronger than truth
I can't believe I ever hurt you, I swear I will never lie to you again, please
Just give me one more chance, I'll never lie to you again, no,
I swear, I will never tell a lie, I will never tell a lie, no, no
Ha ha ha ha ha, ho ho ho! Sucker! Sucker! Ooooh sucker!

I am a liar, yeah, I am a liar, yeah, I like it,
I feel good, ooooh I am a liar... yeah
I lie, I lie, I lie, ooh I lie, I lie, yeah,
Oooooh I'm a liar, I lie, yeah, I like it, I feel good,
I'll lie again, and again, I'll lie again and again and I'll keep lying,
I promise... ha ha ha

Vooter's picture

The Beavis and Butthead version is much better:

Vooter's picture

I think watching the U.S. collapse is hilarious--I hope it gets WAY worse!

Gamma735's picture

No, you are seeing the collapse of a despeate ruling class.  Freedom will over take their tranny.  End the Fed.

Winston Smith 2009's picture

No, you are witnessing the collapse of the middle class worldwide.  The wealthy will do just fine as they always do since the system is rigged in their favor.  If you haven't noticed, only deep pockets own your government.

Vic Odd's picture

Transmission or transexual? mean tyranny...never mind.

Lost Word's picture

Transexual might aply to Obummer, Down Low in Gay Chicago.

The Dancer's picture

But P.C. and progressiveness is "the moral high ground"...we are superior to you base folks down there....sarc on

Doctor of Reality's picture


This is what I've been so upset about since waking up to reality in 2008. Without truth and honesty, we're doomed. If you can't trust the people who make the rules... you can't trust the rules. When enough people don't trust the rules... society crumbles.

optimator's picture

I wish we could return to the time when we trusted Government - and they trusted us.

Cathartes Aura's picture

looking back, at what point would you place your trust in government?

at what point was government deserving of your trust, of the trust of humans living under the government ruling?

from over here, it doesn't appear to be any time during my own life, nor decades prior even. . .

trust yourself first, earn your own trust.  then add others, carefully, as you go.

Omen IV's picture

There is no Truth - there are only endless infinite Interpretations

therefore, the only "rules" are actually guidelines which are situation specific depending on the power dynamic of the respective parties - short term long term

judges are a waste of time they will get to where they want regardless - so dont bother - lie, cheat and steal  - measure the risk of gamblers ruin - and if you get into a negative corner - say're sorry - someone will buy it somewhere and move on

both government and private systems