In his review of the film version of Stephen King’s novel, Cujo, about a rabid St. Bernard, Roger Ebert characterized it as the movie that shows you can’t trust your best friend, your wife, your kids, your car, or your dog.
2008 was a Cujo of a year.
This year we learned that the people who ran the financial firms and received billions in compensation for doing so didn’t have any better idea of the value or risks of many of the assets they were selling than the guys who mowed their lawns did. These are smart people who went to the very best schools, are very hard-working, and very wealthy. They’re still sitting in the shells of the financial companies wondering what to do next. We still don’t know what the values of those financial instruments are and we’ve already spent a couple of hundred billion dollars finding out.
We also learned that you couldn’t trust economists to warn us about such things. Relatively few warned with any specificity: Nouriel Roubini was practically alone in his downbeat forecasts. However, I’m sure economists will be able to describe what happened with wonderful precision—that will be the source of dozens of doctoral dissertations.
We learned that all of the reasons that a lot of well to do people thought they could trust their money with Bernard Madoff were mistaken.
And all of us learned that the regulators at the SEC who should have closed down Mr. Madoff’s Ponzi scheme years ago can’t be trusted to do their darned jobs. They’d been receiving and ignoring complaints against Madoff for nearly 10 years before taking action. Clearly, while it may be the case that a lax enforcement environment under the Bush Administration played a part in the delay that cost Madoff’s investors billions, since the first formal complaints were received by the SEC in 1999 the Clinton Administration’s SEC didn’t exactly cover itself with glory in this matter, either.
Silda Spitzer and Elizabeth Edwards learned they couldn’t trust their husbands.
Any poor benighted Illinoisan who thought that he or she could still trust Gov. Rod Blagojevich has now been enlightened.
The CEO’s of GM and Chrysler have demonstrated that their companies’ boards of directors were fools to entrust them with those companies.
The buying and selling of real estate has slowed dramatically because people don’t have any faith in the values of the houses. Why buy for $250,000 today if the same property will be selling for $240,000 in a month? Retail sales have slowed because people don’t trust that they’re going to have their jobs in the coming year.
Anybody who’s been paying attention to the Chinese milk scandal has got to be wondering if we should trust the integrity of our food.
It’s not good enough to say that we’ll just have to get used to the idea that we can’t trust anybody. Our society is based on trust. As simple an act as driving to the market requires a score of individual acts of trust. We trust that the gasoline in the car is gasoline rather than water. We trust that the car will start rather than explode. We trust that the other drivers will stay in their own lanes and not run stoplights or stop signs.
We trust that the milk contains milk and the beef is beef and neither have rotted or, if they have, that the merchant will acknowledge the problem and make good. We trust that the full faith and credit of the United States stands behind the paper money we use to pay for our purchases or that a bank somewhere will honor the credit card transaction we’ve used or the check we’ve issued.
It isn’t the law or police enforcement that makes the car or the other drivers or the grocery store and all the products in it or the money or the banks trustworthy. The size of the government apparatus that it would take actually to ensure all of those are the case 100% of the time would truly be staggering. No, it’s that most people are, in fact, trustworthy. That may be because of their consciences, those internalized voices that make them feel guilty when they misbehave, or the sense of honor that goads them to doing their best or maybe the fear of going to hell or the fear of social censure. Many people remember Voltaire’s comment that “If God does not exist, it would be necessary to invent Him” but fewer remember the reason that he gave: “I want my attorney, my tailor, my servants, even my wife to believe in God, and I think that then I shall be robbed and cuckolded less often.”
I honestly don’t know how we’re going to manage our society without conscience, honor, social stigma, a belief in God, or a totalitarian police state. We’re certainly trying.
Like brand loyalty once lost trust may be very difficult to regain but that more than anything else is what we need to do to get our economy back on track. We need to believe that the experts know what the heck they’re talking about, that managers care about something other than today’s stock price, and that politicians care about something other than their own pocketbooks.
There will be no master stroke, no sudden restoration of trust. It will take time, pain, and effort.
The old verities and the traditional wisdom are certain to lead the way. Be as good as your word. Neither a borrower nor a lender be. The laborer is worthy of his hire. Waste not, want not.
A little shrewdness will help, too. Manage expectations. If people expect too little, you’ll never gain their trust. If people expect too much, you’ll lose their trust when you inevitably fail.
We’re going to need to strike some balance between trusting everyone and trusting no one. As Mr. Dooley put it, trust everyone but cut the cards.
