On America’s Short-Termist And Fraud-Provoking Culture
Submitted by Tyler Durden on 11/18/2012
Two months ago we posted an excellent introduction from Dan Ariely on the truth about dishonesty. The focus on our ease of rationalizing dishonest acts struck quite a chord and as a follow-up the behavioral economist discussed several real-life examples with Capital Account’s Lauren Lyster. Critically, firms are shifting their focus from long-term growth to maximizing ‘shareholder-value’ (since any short-term mis-step in a liquidity-fueled boom such as this is punished to the point of ‘going-concern’) and the increasingly short-term focused attitude not only hurts employees and taxpayers but serves to provoke a culture of dishonesty or fraud. Ariely also notes, rather interestingly, that new disclosure requirements for ‘academic-based’ reports merely creates a more exaggerated result – since report-preparers now know the result will be discounted further. Again, one could argue, that Bernanke’s ZIRP world (and an under-the-surface reality known to all that we are on a precipice) creates an ever-decreasing time-horizon for every ‘invisible-hand’-driven act we undertake: we have shifted from “Get Rich Quick” to “Get Rich Quicker…By Any Means.”
In the movie “Inside Job” it was revealed most, if not all, academic economists were making millions from supporting the fraudulent practices of Wall Street and Banksters, as well as provide documentation and academic research showing deregulation was a good idea. All fraud, deceit, and the resulting bail-outs have taught us nothing. Banks are bigger and more powerful than ever, they control politicians more than ever, and the Federal Reserve is printing more money than ever. No bad deed goes unrewarded for banksters and Wall Street.
And, as the democrats say “don’t waste a crisis”. The banksters created the crisis, and used it to get Hank Paulson to steal $700 billion from taxpayers and hand it over to banks and Goldman Sachs. By keeping the economy in a constant state of crisis, they can pretty much do whatever they want, knowing they can “settle out of court” for a fraction of the profit they made committing fraud; the end result is they get more and more money while everyone else is eaten alive by taxes, fees, and interest payments. Masterful use of psychology by the banksters and Wall Street. It’s worked beautifully.