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The Eradication of Trust
Posted on Apr 19, 2010
Trust might as well be a four-letter word. American public opinion seems to have become an unguided Weapon of Mass Suspicion, and it’s not hard to understand why. But those who would exploit distrust, dissatisfaction and anger for political gain had better worry about collateral damage.
The overhyped tea party phenomenon is more about symbolism and screaming than anything else. A “movement” that encompasses gun nuts, tax protesters, devotees of the gold standard, Sarah Palin, insurance company lobbyists, “constitutionalists” who have not read the Constitution, Medicare recipients who oppose government-run health care, crazy “birthers” who claim President Obama was born in another country, a contingent of outright racists (come on, people, let’s be real) and a bunch of fat-cat professional politicians pretending to be “outsiders” is not a coherent intellectual or political force.
But even people who wouldn’t be caught dead at a tea party rally have lost trust in powerful institutions that are supposed to be working in the public’s interest—with considerable reason. Just look at the headlines.
There’s obviously no reason to trust Wall Street. Theoretically, the only reason for the financial system to exist is to service the economy—and the American people—by channeling capital to its highest and best use. The charges filed last week against Goldman Sachs illustrate the extent to which capitalism’s precepts have been turned on their head by financiers who believe the economy exists to service them.
The allegation, basically, is that John Paulson, a hedge fund mogul who wanted to place a billion-dollar bet that the housing market would deflate, convinced Goldman to round up patsies who would bet the other way. Then the transaction was allegedly rigged so that Paulson would almost surely win his wager, which he did. Goldman denies the allegations of fraud and says that, in any event, it lost money on the deal.
Leave aside for the moment whether Goldman’s action fell just inside or just outside the line demarcating what was legal. What possible socially redeeming value did the transaction have? How did the concoction of a “synthetic collateralized debt obligation” benefit anyone except the lavishly compensated traders at Goldman and the outrageously compensated John Paulson? Is this a system the rest of us could possibly trust?
Another story that won’t go away is the pedophilia scandal in the Roman Catholic Church. On Sunday, during a visit to Malta, Pope Benedict XVI prayed with eight adult victims of childhood sexual abuse by priests and reportedly expressed his “shame and sorrow.” But practically every day, there are new revelations of pedophile priests having been transferred to other parishes rather than being defrocked and reported to authorities.
A CNN poll showed that 56 percent of U.S Catholics disapprove of how Benedict has dealt with the crisis. Even the judgment of the Vicar of Christ is being questioned.
Perhaps most striking of all is a new Pew Research Center poll showing that the public’s trust in the federal government has plummeted. Just 22 percent of Americans say they can trust the government all or most of the time, Pew found. Only 19 percent of respondents say they are “basically content” with the government, while 56 percent are “frustrated” and another 21 percent describe themselves as “angry.”
According to the Pew survey, Americans have negative views of many large institutions—banks and financial firms, Congress, large corporations, the national news media, federal agencies, the entertainment industry, labor unions. The nation still has a positive view of colleges and universities, churches, small businesses and technology companies. Respondents were evenly divided on the Obama administration, with 45 percent being positive and 45 percent negative. Given the current climate, the president might be tempted to claim a moral victory.
There are some contradictions in Pew’s findings. Americans strongly believe that “more government control over the economy” is a bad idea. But by a much bigger margin, they believe that “stricter regulation of financial companies” is a good idea. This is the needle that Congress—with an all-time-low 25 percent approval rating—is now trying to thread.
Republicans have been actively encouraging this groundswell of distrust on the theory that it’s bad for incumbents, meaning Democrats. Indeed, the approval rating for the Democratic Party has plunged to 38 percent. The problem is that approval of the Republican Party has also fallen—to 37 percent.
The moral here, for giddy GOP strategists, is the one about people who live in glass houses.
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