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THE POLITICS OF TRUST
The breakdown of trust by the American people is what really brought down the Republican Party. The success of the Obama Administration will only be accomplished by honesty and transparency or there will be little trust and confidence in an economic recovery: Allen L Roland
Right now, it's all about the politics of trust. Americans hold a dim view of business executives, giving them poor grades for honesty and ethics and blaming them for business failures, according to a recent survey. Nearly 60 percent gave the worst grades to Wall Street executives for honesty and ethical practices. http://www.ourfuture.org/news-headline/2009020927/wall-street-gets-low-marks-ethics-honesty
A 2005 letter in premier scientific journal Nature reviews the research on trust and economics:
" Trust ... plays a key role in economic exchange and politics. In the absence of trust among trading partners, market transactions break down. In the absence of trust in a country's institutions and leaders, political legitimacy breaks down. Much recent evidence indicates that trust contributes to economic, political and social success or failure if trust is lacking "
Forbes wrote an article in 2006 entitled "The Economics of Trust". The article summarizes the importance of trust in creating a healthy economy ~ " Above all, trust enables people to do business with each other. Doing business is what creates wealth... Economists distinguish between the personal, informal trust that comes from being friendly with your neighbors and the impersonal, institutionalized trust that lets you give your credit card number out over the Internet."
Similarly, market psychologists Richard L. Peterson M.D. and Frank Murtha, Ph.D. wrote in October:
" This crisis is now fundamentally about psychology ~
Trust is the oil in the engine of capitalism, without it, the engine seizes up.
Confidence is like the gasoline, without it the machine won't move.
When Trust is gone: there is no longer trust between counterparties in the financial system. Furthermore, confidence is now at a low. Investors have lost their confidence in the ability of shares to provide decent returns ..This is now a PSYCHOLOGICAL problem."
Indeed, as leading economists have pointed out, the big financial institutions don't trust each other, because they know that all of the other companies might have hidden their problems or gamed their books .
And that's where we are now ~ no one trusts the system because no one is being transparent and telling the truth.
SO HOW DO WE FIX THIS BROKEN ECONOMY ?
Given that there is a total breakdown in confidence and trust, our leaders, particularly Obama, can only help turn the economy around if they first admit that they've blown it.
George Washington's blog summarizes the necessary steps to accomplish this ~
They have to admit that:
" The entire modern financial system has been built on a house of cards (see this and this)
Our economy cannot prosper without a strong manufacturing base, and without services which actually help people (instead of doing nothing but shuffling money around from one financial desk to another)
They allowed far too much leverage in the system and far too much fractional reserve banking .
Throwing more money at the too-big-to-fail companies will not help anything, and that it is the American people who need relief.
The Fed can't simply blow up one credit bubble after another to rescue the economy .
Things have been shrouded in too much secrecy, and that we need radical openness of the financial system.
If our leaders admitted these things, trust would be restored, and we could get back to work and restore our economy." http://georgewashington2.blogspot.com/2009/02/most-dangerous-words-theres-nothing-we.html
Obama must set the example by being completely transparent and honest in his dealings with Congress, Americans and particularly other countries. Bush and Cheney have obviously severely damaged America's credibility and trust abroad.
Director of National Intelligence Dennis Blair told Congress yesterday that Guantanamo must be closed because "Countries won't deal with us. Our popularity's down. We don't have blue chips to trade."
Obama could start building that trust by speaking to the United Nations and not only apologizing for our bullying and marginalizing of that important worldwide body but pledging renewed support to fund their worldwide efforts to assist the poor and disenfranchised.
As John Mann writes ~ " As a nation we may very well be headed directly for an object lesson in mass human dynamics. There's a tidal wave building, not just because of institutional economic destruction, but because of well deserved, long pent-up anger and disgust with the political and financial elite."
Only Transparency and honesty can restore the politics of trust and finally confidence in our severely wounded economy.
Allen L Roland http://blogs.salon.com/0002255/2009/02/27.html
Freelance Alternative Press Online columnist and psychotherapist Allen L Roland is available for comments, interviews, speaking engagements and private consultations ( allen@allenroland.com )
Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.net
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