TRUST US: Elite Lies, Self-Deception and American Failure


America is a failure for the 99%. Why, in the early 21st Century, are major institutions in this country prone to so many frequent, repeating, foreseeable, and avoidable failures? Americans respect authority far too much. Our elites are very good at self-deception, and they are leading us over a cliff.

Published in Foreign Policy on March 30th, economist Mark Blyth's article, "The U.S. Economy is Uniquely Vulnerable to the Coronavirus: Why America’s Growth Model Suggests It Has Few Good Options", concisely describes one of the major sources of a self-evident truth - the American way of doing things is a failure for the 99%:

The United States typically opts to protect capital and to simply let labor adjust through unemployment. But this instinct—to protect the big players and let workers take the hit—is also a key reason why the coronavirus pandemic is a disaster amplifier for the U.S. growth model in a way that is not true for Germany or even the United Kingdom.

Indeed, America showed in the months that followed the outbreak that it is virtually unique among western countries in its failure to contain the spread of Covid-19 virus. NBA stars and the West Wing get tested every day, but it can take two weeks for the rest of us. Most are simply denied tests because they are unavailable unless you already show symptoms of infection. As a result, the pandemic has triggered a major, prolonged economic crisis with nearly half of small businesses shut down and tens of millions continue to be out of work. Nobody has the slightest idea of when that will end, if ever.

Even before the pandemic, America already had the most expensive and unequal access to health care, which goes along with the highest income inequality in the developed world. As it is practiced in this country, Capitalist medicine kills, and that failure is now undeniably clear.

America is now on the brink of a collapse of consumer spending as huge numbers of jobless face a loss of most unemployment compensation, evictions, and hunger. Confronted with a steep cut in benefits with the end of the $600 weekly CARES unemployment payment, millions have a choice: pay the rent, default on the car payment, or buy groceries in the coming weeks. In mid-May, the New York Times reported that twenty percent of American children were already going hungry, while the temporary federal unemployment benefit had prevented many more working families from slipping into poverty:

New research shows a rise in food insecurity without modern precedent. Among mothers with young children, nearly one-fifth say their children are not getting enough to eat, according to a survey by the Brookings Institution, a rate three times as high as in 2008, during the worst of the Great Recession.

The reality of so many Americans running out of food is an alarming reminder of the economic hardship the pandemic has inflicted. But despite their support for spending trillions on other programs to mitigate those hardships, Republicans have balked at a long-term expansion of food stamps — a core feature of the safety net that once enjoyed broad support but is now a source of a highly partisan divide.

The Stock Market and banking sector, now on life support, has been teetering on the brink for nearly a year. America is in its second major financial crisis in a dozen years.

America's health care and economic systems have failed because they are based in naked inequality and elite benefit from the premature death, suffering and deprivation of the large part of the population that cannot afford both a decent place to live and comprehensive private medical coverage. As a result, they get neither.

The federal response to the COVID-19 crisis has been to pump trillions of dollars into the financial sector, equities markets, and major corporations, primarily through injections into the Repo Market and Quantitative Easing (QE) by the Federal Reserve. Essentially, QE allows big banks to swap junk corporate assets in their portfolios for federal Treasury debt, which is in turn loaned out at below zero rates of real interest to corporations, which buyback their own stocks, driving up equities prices and market indexes. Nonetheless, the head of the St. Louis Federal Reserve has warned that despite trillions in stimulus, "we could get a wave of substantial bankruptcies [that] could feed into a financial crisis."

Not surprisingly, it is the most capitalized companies that have benefited most from this response, allowing them to further consolidate control over the sectors they already dominated as near-monopolies. This fattening at the top means that the S&P 500 is really the S&P Five. The increasing imbalance between a small number of extremely enriched corporate giants -- most in the Digital Economy -- and a much broader commercial decline and the poverty of ordinary Americans is creating a huge potential for political and economic crisis to come. This increasingly uneven outcome makes the current "recovery" the narrowest and most unstable in history. A lead article in The New York Times for July 28, states:

An economic downturn almost always favors giants like Microsoft, Apple and Amazon, the country’s three most valuable companies. But the demand for their shares has only been amplified by a crisis that seems almost tailor-made for their future success.

Even as analysts have trimmed expectations for all three companies’ quarterly earnings, which they’ll report this week, their stocks are climbing. Their combined value rose more than three-quarters of a trillion dollars since the recent market low — more than the cumulative gain of the bottom half of all stocks in the S&P 500.

Investors are betting, in part, that the Covid-19 crisis accelerates the already growing power of America’s corporate colossuses.

Meanwhile, The Times warns that smaller companies are facing a mass die-off in an economic extinction event:

But the depth of the current economic decline makes it reasonable to expect that such large companies will emerge in an even more dominant position this time around, said Mr. Philippon, who last year published a book, “The Great Reversal,” that examines the competitiveness of the American economy.

“This one is likely to be much worse because the death rates of small businesses is likely to be even higher,” said Mr. Philippon.

The difference in investor expectations for large and small companies is stark: The Nasdaq 100, an index of the largest technology companies — which also happen to be the largest companies in the country — is down 0.6 percent this year. The Russell 2000 index, which tracks small public companies, is down 22 percent — roughly double the 11 percent in losses for the S&P 500.

Organizational Narcissism: As an organization, America has failed on several key indicators as it shows all the signs of delusional clinical illness and denial of some very disturbing realities. It exhibits all nine characteristics of Narcissistic Personality Disorder. An Individual or organization that displays five of the following may be clinically diagnosed as a Narcissist according to the American Psychiatric Association DSM-5.

These nine characteristics of a Narcissistic organization are:

{1) A grandiose sense of self-importance—excessive attention to PR and corporate image.
(2) Preoccupation with fantasies of organizational power and success at the expense of attention to employees and daily operations.
(3) Management’s belief that the organization is “special,” habitually associating with and playing up to celebrities and high status people.
(4) The organization requires excessive admiration, loyalty, and 24/7 devotion from workers, denying them balance in their personal lives.
(5) The organization acts with a sense of entitlement, expecting unquestioning employee obedience and compliance with corporate demands.
(6) The organization is exploitative, takes advantage of employees using guilt, threats, or admonitions about “the common good.”
(7) The organization lacks empathy. Its policies and procedure are inflexible when dealing with employee needs. It treats workers like replaceable parts.
(8) The organization is overly envious of other organizations, driven by underlying fear of competition and financial anxiety, resulting in stagnant wages and major cuts in operating budgets and benefits while maintaining high levels of pay for upper management.
(9) The organization demonstrates arrogant attitudes toward employees, becoming harsh and vindictive when workers propose alternative approaches or question the status quo.

All nine of these characteristics accurately capture the national identity and self-descriptive propaganda of the United States during the past century. During the last few decades, aspects of that identity -- particularly those that exult American Exceptionalism -- has become increasingly divorced from reality.

Government can also be said to have failed in the sense that it does not arguably function to successfully mediate interest groups in a way that serves and satisfies the majority. By this key measure, the United States is a failed democracy. It is now an oligarchy. As the famous 2014 study by political scientists Mark Gillens and Benjamin Page found:

“Our analyses suggest that majorities of the American public actually have little influence over the policies our government adopts,”

[ . . . ]

Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association, and a widespread (if still contested) franchise. But we believe that if policymaking is dominated by powerful business organizations and a small number of affluent Americans, then America’s claims to being a democratic society are seriously threatened.

America's decline into oligarchy and political and economic chaos isn't the result of the evils or incompetence of one man or one party. It isn't due to the particular incompetence, moral failings or lack of education of the American people, as a whole. It has happened because we have allowed ourselves to be entranced by impressive emblems of prestige inscribed with seemingly ancient mottos: Lux et Veritas; The Work of a Nation; In God We Trust.

They are there to remind us of the ancient taboo against challenging the power and privilege of our social betters. But, let's now admit the truth, because we have been left no choice: our leaders, with few exceptions, have all failed in leadership roles or failed to speak honestly to institutional failure in America that has been laid bare by this crisis. That is true almost across the board in America today. In business, finance, government, and media, the country's elites have failed to confront dangerous failures, and they must now, collectively, be held accountable for their own failings. The elites have failed, they can't be trusted to correct or replace themselves.

The fault, if fault must be found, for the mess we're in lies is in the collective failings and self-deceptions of those at the top, as well as those who are supposed to be punishing corruption and correcting incompetence. Don't blame germs, Russians, or space aliens. The potential for failure and delusion of greatness is endemic to elites, and their inevitable failure in America is no longer deniable. Denial of elite failure is no longer socially acceptable. This observation is nothing new. In 2012, Chris Hayes opened the First Chapter of his book, Twilight of the Elites, with these eloquent, prophetic words:

AMERICA FEELS BROKEN.

Over the last decade, a nation accustomed to greatness and progress has had to reconcile itself to an economy that seems to be lurching backward. From 1999 to 2010, median household income in real dollars fell by 7 percent. More Americans are downwardly mobile than at any time in recent memory. In poll after poll, overwhelming majorities of Americans say the country is “on the wrong track.” And optimism that today’s young people will have a better life than their parents is at the lowest level since pollsters started asking that question in the early 1980s.

It is possible that by the time this book is in your hands, these trends will have reversed themselves. But given the arc of the past decade and the institutional dysfunction that underlies our current extended crisis, even a welcome bout of economic growth won’t undo the deep unease that now grips the nation.

Indeed, those trends have not reversed, we are now simply eight years further into the twilight forever crisis of the elites. The only thing that has changed is that its now harder than ever to deny that the crisis is fatal if we continue to do nothing about it.

America's failings are systemic. But, even the wise Mr. Hayes didn't quite put his finger on it. The failure of several primary institutions at the same time is primarily the result of an elite political and corporate culture of narcissistic self-deception and lack of transparency and accountability for those in power. Lies, Self-deception and Malignant Narcissism. These three elements go together to create disaster.

The essential role of narcissism in understanding the dysfunctions of the elites hasn't been much discussed until recently, outside the fields of social psychology and cognitive research. But, as this review of the literature demonstrates, it's central to the way that institutions are run as it is to the personalities of some who run them. This is the inevitable conclusion that can be drawn from numerous peer reviewed professional journals by tenured professors in several academic fields.

The literature and journals of elite institutions have begun to acknowledge the obvious. The elites are telling each other that the system is in deep trouble. More astonishing, they assess that a substantial proportion of the elites who run powerful institutions are themselves dysfunctional, and some are clinically psychotic. Let that sink in.

What the literature tells us is society can't get rid of bad leaders, despite their proven failures and incompetence, because the system is set up to deceive the public, promote and protect the collective tenure of self-aggrandizing power elites, and to pass on power to those most like themselves. That isn't just the common-sense ravings of Internet radicals, as this review of the literature demonstrates, it's the conclusion drawn in numerous peer reviewed professional journals by tenured professors in several academic fields of advanced study. The elites are telling each other that the primary social institutions they designed and maintain are failing. Let that sink in, as well.

A major factor behind institutional failure, a growing body of research shows, is that a higher than normal percentage of those who most actively seek and occupy positions of power and social prestige are incompetent narcissists driven by self-deception about their own actual abilities. [1] While adept at deceiving others, narcissists commonly have an impaired ability to detect deception by others, and are more likely to be deceived by those they do not know well. [Ibid.] While not all powerful people are clinical narcissists, America's elites collectively exhibit narcissistic behaviors, including an inflated sense of their own importance, a deep need for excessive attention and admiration, troubled relationships, and a lack of empathy for others.

American elites are also increasingly incompetent because at the highest levels -- despite lip service to diversity, inclusion and meritocratic recruitment -- narcissistic institutions are primarily self-selected by incompetent, overcompensating narcissists, and this has a cumulative impact on institutional functioning. See, ftns. [1][2][3A][7][9]

Peer reviewed studies establish that the narcissistic personality type is irresistibly drawn to leadership positions in fields such as politics, technology, finance, and intelligence where recruitment and rapid advancement to power is possible for the relatively inexperienced, extreme risk-taking behavior is rewarded, and mechanisms of public accountability are lacking or deficient. [2][5][7][8][15]

While "toxic leadership" is also well documented within the the military services, [13] contemporary military culture is highly hierarchical and strictly disciplined, and holds many constraints on individual action. Advancement for junior officers through the many grades is normally slow and methodical with frequent assessments according to set doctrine, and strict accountability for performance, particularly in peacetime, all institutional aspects that may be unattractive to many narcissists. A recent study shows that West Point graduates from economically advantaged backgrounds who display narcissistic character traits do not, in fact, perform well in U.S. Army leadership assessments, and as a result are not promoted rapidly.[14]

These findings may challenge the continued validity of aspects of C. Wright Mills "Iron Triangle" theory about the Power Elite. Specifically, Mills observed that in the early post-War era, the same narrow cadre of high-status white males dominated the upper ranks of politics, business and the military of the day.

The 20th Century institutions the New Economy corporations replace tended to operate according to bureaucratization, technological rationality, and the centralization of power described by C. Wright Mills in his seminal study, The Power Elite. (1956), New York: Oxford University Press. But, because of their homogenous, socially interlocked leadership, so criticized by Mills, elite figures of the Cold War era were often more accountable to each other.

Today, the corporate culture can hardly be characterized as run according to consensus and accountability, except to stockholders. Many organizations, particularly start-ups held by private equity, operate in virtual secrecy. Internal processes are opaque or unregulated, and compartmentalization of information, both internally and publicly, is the norm. Research has also found, significantly, that these organizations operate with a high degree of "strategic deception", with elaborate protocols of calculatedly misleading information directed at competitors, regulators, and their own employees, alike. [8][9]

During the last several decades, the explosion of Venture Capital and its demand for unprecedented high rates of Return on Investment has driven the growth of start-ups and the disruption of existing industry practices. Along with deregulation and laxer oversight by lenders, business practices have become increasingly deceptive and secretive. Traditional standards of business ethics have dissolved, and strategic deception of competitors, regulators and workers, alike, is a norm as management attempts to meet heightened demands for returns. [8][9]

Deregulation, disruption and consolidation has transformed the most socially impactful industries, spawning predatory dominant firms in technology, new media and government services, including privatized intelligence. These have rapidly displaced preexisting entities that were generally more regulated and publicly accountable.

Lack of broad life experience and empathy also plays a role in a changing business culture. Some of the most successful digital era companies are founded by young, ambitious, recent graduates from elite universities. Otherwise, many have little previous experience. As "The Social Network" showed, the culture of Facebook's founders was youthful collective narcissism, ruthless extermination of rivals, exploitation of underlings, anything but the altruistic, benign and progressive culture of IT industry PR. Even the supposed liberalism of Tech sector may be a conceit. As a recent academic study confirms, the politics of Silicon Valley elites are less “liberal” than “elite”, and they are in fact further to the right on economic issues than Republican funders and their peers in other industries. [12]

Today's elites lack the unifying, communal and nationalistic experience of wartime service of their parents' and grandparents' generation. At first in the Tech industry during the 1980s, but now in virtually all sectors, start-ups operate according to a business model of disruption of existing industries and displacement of competitors. After their incubation, these companies go public, and tend to gain market share through consolidation, buying up competitors. In just a few years, this has led to creation of a clique of newly-minted Wall Street and Silicon Valley billionaires who identify and associate with other wealthy global elites. The global IT sector has spawned oligarchs running enormous, dominant entities such as Amazon, Microsoft, and Facebook, near monopolies that have driven competitors and entire sectors such as retail to the brink of extinction. Artificial Intelligence (AI) developed by these same predatory giants now threatens to further bankrupt industries, do away with dozens of occupations, eliminating many millions of jobs.

In addition to monopolies again dominating the economy as in the Gilded Era, private government contractors have increasingly taken over roles once reserved for agencies of nation-states, like space flight, intelligence gathering and analysis, and even armed counter-insurgency. With privatization of state functions, traditional legal boundaries have disappeared, constitutional safeguards and public accountability no longer exist as they did previously. As a result, we have lost civilian control of the military-intelligence complex, warrantless mass surveillance and personal data acquisition and profiling is now taken for granted, and covert agencies and privatized intelligence operators interfere in domestic political campaigns and elections with near impunity, while major news media have shown themselves to be complicit with this and have become a tool of deceptive anonymous sources.

Low Emotional Intelligence Combines with The Dunning-Kruger Effect: How does one explain elite incompetence among highly qualified people? One answer is that they are more self-confident than truly competent, and deceive themselves because they believe the hype and propaganda of elite institutions that produced them. Research has shown that these high status but low emotional intelligence individuals are highly resistant to criticism, constraint and challenge to their authority, and are least likely to seek improvement in the four areas measured: perceiving emotions in the self and others, using emotions to facilitate thought, understanding emotions, and managing their own and others’ emotions. The low EI individual, furthermore, tends to surround himself with others with similar characteristics, building organizations. As leaders with responsibility for themselves and others, and limited supervision, they are simply disasters waiting to happen. A study at Columbia and Rutgers business schools confirms that low Emotional Intelligence (EI) combines with the Dunning-Kruger effect to negatively impact business managers' ability to accurately assess their own abilities and those of others: [10]

[T]hose who lack emotional intelligence may be limited in their ability to gauge what effective emotionally intelligent responses look like.

Researchers found that those who are least skilled emotionally may lack the logical resources to recognize their own limitations, and are the most resistant to implementing changes that might improve their performance:

We examine whether potentially mistaken managerial self assessments might be rooted in a phenomenon known as the Dunning-Kruger effect (Dunning, 2011, in press; Dunning, Johnson, Ehrlinger, & Kruger, 2003; Ehrlinger, Johnson, Banner, Dunning, & Kruger, 2008; Kruger & Dunning, 1999; Williams, Dunning, & Kruger, 2013). According to the logic of this effect, the expertise necessary to judge a person’s performance in many domains is exactly the same expertise needed to produce competent performance in the first place. For example, knowledge about the nuances of logic is necessary both to produce a logically sound argument and to judge whether another person’s (or one’s own) logic is sound (Kruger & Dunning, 1999). In domains like this, people who are poor performers often suffer a double curse. First, limitations in their expertise cause them to make many mistakes. Second, those exact same limitations prevent them from accurately recognizing just how mistaken their own choices are and how superior the choices of others might be.

With only a little experience, and limited ethical concern for anything but shareholder equity, the self-important CEO free of a set of group norms quickly becomes truly dangerous. [8][9] Subversion from Above by emerging elites is a manifestation of the Dunning-Kruger Effect,[10] a dysfunction displayed by institutions as well as individuals.

In the last decades, we have witnessed Subversion from Above -- massive disruption of the economy and privatization of government by giant, newly established, relatively unregulated and unaccountable digital and government services corporations. This is proving, atop the longer term takeover of government policy by corporate elites,[18] to be fatal to notions of pluralistic American democracy and once dominant assumptions about a broadly shared affluence of the middle-class economy.

How the Dunning-Kruger Effect Operates

Tragically, society allows enormous latitude to the very wealthy, and is entranced by novelty, risk-taking and youthful energy, particularly when there is a plausible claim to being one of the Best and Brightest. One of the advantages of birth into wealth and privilege is the deception of superiority, which commonly leads to the self-deception of overconfidence.

A 2019 transnational study in The Journal of Personality and Social Psychology conducted a panel of studies of more than 150,000 individuals in the United States and Mexico. The authors found: [16]

[C]ompared with individuals with relatively low social class, individuals with relatively high social class are more overconfident. Then, drawing on research suggesting that overconfidence can confer social advantages, we further hypothesize that the overconfidence of higher class individuals can help perpetuate the existing class hierarchy.

The authors of "The Social Advantage of Miscalibrated Individuals: The Relationship Between Social Class and Overconfidence and Its Implications for Class-Based Inequality" cite a number of studies for the finding that admission to elite institutions is less a function of merit and mobility than of family income. [Ibid.]

Advantages beget advantages. Those who are born in the upper-class echelons are likely to remain in the upper class (Wilkinson &Pickett, 2009). The majority of individuals who work at elite and prestigious firms tend to come from elite educational institutions(Rivera, 2016). And high-earning entrepreneurs disproportionately originate from highly educated and well-to-do families (Levine &Rubinstein, 2013). These are some examples of how advantage tends to be self-perpetuating, belying the American ideal of social mobility (e.g., Hochschild, 1996).

This sometimes facilitates the sudden emergence of figures of seemingly high confidence and credentials from elite institutions. Research also shows that a higher than average percentage of individuals bearing elite educations are not merely overconfident, some are narcissists driven by ambitions to quickly achieve positions of grandeur. In certain fields, such persons can achieve speedy access to the top tiers of power and access without a long track record of substantial peer-reviewed accomplishment, particularly when they arrive with substantial financial resources or deep pocket backers. In other cases, persons can advance internally or be be appointed to positions of great power being subjected to only minimal public scrutiny or accountability. Not surprisingly, this is most frequently the case in business and politics, but it can also occur in other elite institutions, such as the intelligence services, where there is only the most limited public knowledge of internal operations. In American politics, the recent examples of the seemingly out of nowhere candidacies of one-term Senator Barack Obama and Mayor Pete Buttigieg come readily to mind. Donald Trump previously had virtually no track record whatsoever in a prior elected position. Little is known publicly about the record of some CIA Directors and high officials beyond the information they or the institution releases. [15]

Graduation from elite schools can mask emotional deficiencies. It is often displayed as a badge of merit which masks deficiencies in emotional intelligence.[10] Even Donald Trump [7] has attempted not unsuccessfully to leverage family privilege into an illusion of academic meritocracy and its implied "smartness". While creating a mythology of diversity, however, admission to Ivy League Plus universities is still most often based on family income. More than two-thirds of students at elite schools are from the top income bracket households and fewer than 4% are from the poorest households. [11]

Undergraduate admission to Princeton, according to 2016 IRS data, is 71% from the richest households and a mere 2.2% come from the bottom bracket. Those who graduate from Ivy-plus colleges (the Ivy League plus Stanford, MIT, Duke, and the University of Chicago) have a 1-in-5 chance of making it into the top 1% by their mid-30s, earning more than $630,000. Graduates from less elite institutions, the odds against more than double to 1-in-11. Meanwhile, a degree from a community college gives one chance-in-300 of making it into the One Percent. [Ibid.] https://www.nytimes.com/interactive/projects/college-mobility/; https://www.nytimes.com/interactive/2017/01/18/upshot/some-colleges-have...

Rise of the Jester Kings: Believing themselves to have advanced merely by merit, ambitious Ivy Plus grads, particularly those with unusual aptitude for deceit and self-deception, aggressively seek out and are given quick entree to leadership positions within powerful institutions. And, to compound this problem for society, the self-deceptive narcissist is exceptionally good at deceiving others and at manipulating feelings of inferiority among followers. This makes narcissists, while they lack genuine empathy and other traits of emotional intelligence -- such as awareness of their own limitations and patience with others -- are exceptionally adept at building vast cults of personality. [3A][3B]

In a small percentage of people, those who are most effective at deception when tested show a neuropsychological tendency toward forgetting they are telling lies as they tell them. Able to suppress conscience and the tell-tale external signs of deception, they are often mistaken by others as having a trustworthy demeanor. [2] While this outward self-assuredness can provide an advantage in business or politics, these highly trusted figures are actually psychopaths who are likely compensating for past trauma or enduring feelings of inferiority. [1][2] Shakespeare expressed the rise of the Jester King this way:

Meanwhile, not surprisingly, American society that is often led by powerful narcissists has become increasingly unstable and less democratic as wealth inequality has risen. The decline of democratic institutions -- the decline of labor unions, the takeover of major political parties by the funding class,[17] the corporate consolidation of news media -- has created a power vacuum that in recent decades has been filled by oligarchic figures with deep pockets and ambitious agendas. With clarity of purpose and without shame, oligarchs patronize and cultivate Jester Kings. From Reagan to Bush, Jr. to Trump to Biden, politicians with outsized egos, diminished attention spans, and convenient memory lapses [2] have been pushed to the very top of the Wheel of Fortune.

Columnist George Monbiot has observed about the rise of what he calls "killer clowns" -- right-wing populists, such as Trump and Boris Johnson, propped up by oligarchs:

What the oligarchs want is not the same as what the old corporations wanted. In the words of their favoured theorist, Steve Bannon, they seek the “deconstruction of the administrative state”. Chaos is the profit multiplier for the disaster capitalism on which the new billionaires thrive. Every rupture is used to seize more of the assets on which our lives depend. The chaos of an undeliverable Brexit, the repeated meltdowns and shutdowns of government under Trump: these are the kind of deconstructions Bannon foresaw. As institutions, rules and democratic oversight implode, the oligarchs extend their wealth and power at our expense.

Money applied to Deceit, personal aggrandizement and self-deception have overwhelmed feeble institutional checks and balances on executive power and financial manipulation - failing institutions cascade, and American society is now in collapse. Things will likely get much worse very quickly. Unrealistic expectations of continued Fed life-support to the stock market, over-leverage, and predatory inflation of markets guarantee a truly Great Crash when it comes, and makes hopes for broad, systemic reform increasingly unrealistic.

Rewards for Deception and Excessive Risk Taking: Moreover, overconfident individuals are more likely to be rewarded for extreme risk-taking behaviors by institutions that value windfall returns over stability. Studies show that deceptive personalities come to dominate institutions such as political parties, financial brokerages and banks and intelligence agencies that reward and promote risk -- risks and failings that are easily hidden by institutional secrecy, hierarchy, and internal compartmentalization. This makes these critical institutions increasingly vulnerable to repeated, avoidable catastrophic failures, even as some attempt is made to hire for diversity. But, being "too big to fail", these institutions are rarely if ever dissolved or successfully reformed.

As the various disastrous failures and high crimes by national leaders in recent times show, in the United States, leadership cadres are practically never held fully accountable for lying to Congressional committees, misbehaviors in office, gross incompetence, institutional failures, and individual errors in judgment. With the exception of junior officers, "designated fall guys" and outside scapegoats, even when there are prosecutions, practically no one ever goes to jail for official misconduct or corporate crime. Once a made man, you are protected - that is the rule of the Omerta, the Brotherhood, which is real, while the rule of law is for the others. Many once disgraced figures are "rehabilitated" and return to positions of public trust, where they again transgress with disastrous results of massive loss of lives or economic ruin for millions.

Often, we have seen that after major scandals and failures during the past forty years -- ranging from Iran-Contra, 9/11, the 2003 WMD fraud and resulting wars, the 2008 Wall Street meltdown, the 2016 Presidential election scandals, and now the initial COVID-19 response -- no real institutional reforms result from scandal and official imvestigations. We are now offered a new generation of misery and war that are a constant companion of narcissistic power seekers. Each new catastrophic "intelligence failure", disastrous optional war, and resulting financial crash only makes intelligence agencies and investment banks more powerful and necessary -- no wonder they openly flaunt their current intervention in domestic politics and society. They know that we never do anything to about it because we respect authority far too much.

Failure of accountability: Instead of being prosecuted after repeated disastrous crimes of state that take thousands of lives or enormous frauds that regularly plunge the country into financial crisis, former officials of elite institutions usually leverage network connections to transfer into other public office or lucrative private sector positions as part of a revolving door process. Ranking leaders and the organizations they leave normally retain prestige, and avoid accountability, reform and oversight even after major public scandals and disasters.

True to form, the individuals most responsible for failures often continue to utilize deception to maintain positions of power and prestige, sometimes achieving even greater position and harm than before.

George H.W. Bush, Sr. embodied the Culture of the Unaccountable in American politics. As the guiding hand behind Iran-Contra, Poppy went on to the Presidency despite his central role in the previous Administration as chief coordinator of arming the Nicaraguan Contras in defiance of the Boland Amendment with Saudi money skimmed from illegal Israeli arms sales to Iran. He continued to organize many of the same parties and personalities in the First Gulf War, relationships that he had cultivated previously as Vice President and Director of Central Intelligence. An error-prone Special Prosecutor an Blue Ribbon panel of Congressional investigators basically gave him a pass on nothing more than his word, and little surprise, the major media went along with it. Such was the institutional power and allegiances that he had commanded.

Of the eight cabinet officers and heads of agency or deputies and military and intelligence officers actually indicted by the Special Prosecutor Walsh, all but one were pardoned or sentences commuted by President Ronald Reagan or by President George H.W. Bush, or given immunity or conviction overturned on technicality. That institutional failure of accountability in American government set the pattern for later intelligence crimes of state and crimes of gross negligence, and many of the same figures reappeared over and over again in subsequent wars and national catastrophes.

Just as the Bush Family is synonymous with unaccountable intelligence crimes, so too does it embody Financial Crime and the Economics of Deception, bank looting, land grabs, commodities price fixing, regulatory failure, and assets bubbles that created the S&L crisis of the 1980s that stretched like a series of rolling market brownouts through the 1997 Asia Crisis, the 2002 Dotcom Bubble and into the 2008 Wall Street meltdown and the NASDAQ Ponzi Scheme and a thousand lesser frauds, oversights, and deceptions that created them. Yet, the number of powerful people jailed for large-scale crimes of state and financial looting can be counted on one hand.

That brings us to the current crisis of Repo Market money laundering of corporate junk into trillions of dollars of fresh Federal T-Bills that predates and accompanies the Covid-19 crisis. But, none of this is new. Secret policemen and their agents provocateur operate behind walls of secrecy and layers of compartmentalization have been joined at the hip with insider traders in a vast imperial circle of front-running markets. This has been going on as long as there have been intelligence agencies and international stock exchanges that manipulate and make vast fortunes from the misfortunes and wars and resulting public debts of states.

Social science provides additional explanations for the continuing failure of democratic control, oversight and accountability. As C. Wright Mills observed in the 1950s, powerful, secretive organizations are run by persons of similar class and educational backgrounds with overlapping institutional affiliations, a group he termed the "power elite".

So too, is the phenomenon of "self-selection" at work behind the organizational failure of accountability. From the Warren Commission forward, Commissions of inquiry after major failures tend to be selected from the same small cliques of trusted cronies with common, vested interests who have held revolving door positions in politics, finance, and intelligence. Investigations are controlled and staffed by the same offending parties, and are turned into spectacles of cover-up that have historically been shown to obscure responsibility, omit key documented facts inconsistent with consensus conclusions, and disseminate disinformation.

Members and chief investigators are often selected to head future inquiries, as was Rep. Lee Hamilton (D-Ind.), head of the Congressional Iran-Contra panel, who was later chosen as Vice Chairman of the 9/11 Commission. Jamie Gorelick, a Commissioner, was previously the Deputy Attorney General at the Justice Department who had authored a March,1995 legal memoranda that erected the so-called Wall that prevented FBI field agents from accessing CIA information about several of the al Qaeda operatives known to be inside the U.S. The Gorelick memo also led to the withholding of FISA warrant requests that FBI field agents had requested to surveil several of the al-Qaeda hijackers during the final months before 9/11. Yet, again, nobody of any consequence considered this obvious conflict of interest and apparent lapse in legal judgment to be disqualify her appointment to the Commission.

Gorelick (Ratcliff B.A., Harvard Law J.D.), has made a career of key appointments to positions that have accompanied major institutional disasters and scandals. Even though she had no previous training nor experience in finance, Gorelick was appointed Vice Chairman of Federal National Mortgage Association (Fannie Mae) from 1997 to 2003. During that period, Fannie Mae developed a $10 billion accounting scandal. She was compensated $26 million for her services there. Ms. Gorelick went on to serve as head lawyer for BP Corporation after the 2010 Deepwater Horizon oil spill. Later, she was appointed a member of the boards of Amazon.com, United Technologies Corporation, the John D. and Catherine T. MacArthur Foundation, the Carnegie Endowment for International Peace.

Organizations run in common by this type of power and prestige seekers tend to self-select for the same flawed qualities, and perpetuate the same types of misbehaviors and mistakes. Those who rise to the top of organizations often realize their own incompetence once at the pinnacle of their careers, but are nonetheless subsequently promoted, in spite of or because of their questionable judgement. Unless major systematic reform succeeds to replace and punish existing ruling elites, repeated crises reinforce self-deceptive practices and institutional failures. Failure, as well as success, eventually dominate the cultures of institutions, making them increasingly prone to group think and elevated in-groups who repeat failed strategies rendering the institution predictably dysfunctional and self-destructive. Disasters become regarded as routine opportunities for advancement and profit. Left to run to its eventual course, the culture of disaster within prestigious institutions in politics, finance, media and intelligence often exhibit collective serial failures, and they will eventually destroy the society they have come to dominate.

Failing Institutions Self-select and Reward Deceit: Narcissism, overconfidence, shamelessness, guile, deceit, delusion of grandeur, ruthlessness, denial of failure, and self-deception - does this bring to mind anyone in particular? According to recent social science and cognitive research, these are all traits of leadership and success often rewarded by a society in decline, and revered by cult followers whose deficient sense of self worth is fed by the self-aggrandizing behaviors of predatory narcissists. It isn't just Trump, it's how electoral politics and the corporate world operate in times of crisis.

As the condition of life declines for the cult followers, their misguided yearnings for a messiah figure only strengthens the manipulator's hold over them. Those elites who don't recognize this institutional dynamic and these narcissistic qualities in themselves are in self-denial, which make them a danger to themselves and the rest of society. Yet, key institutions are still dominated by those whose compensatory power seeking have proven them to be utterly unsuited to leadership. This cycle of delusion and eventual failure is understood by those who clearly anticipate and time the eventual failure of all systems founded in deceit and self-deception. In time, the hand that turns the wheel crushes them all.

_____________________________
Adapted from previous diary.

CITATIONS AND SOURCES

[1] Shakti Lamba and Vivek Nityananda, . Judith Korb, Editor, "Self-Deceived Individuals Are Better at Deceiving Others", National center for Biomedical Information, NIH, Published online 2014 Aug 27. doi: 10.1371/journal.pone.0104562, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4146531/, finds:

" ... self-deception evolved to facilitate the deception of others. We test this hypothesis in the real world and find support for it: Overconfident individuals are overrated by observers and underconfident individuals are judged by observers to be worse than they actually are. Our findings suggest that people may not always reward the more accomplished individual but rather the more self-deceived. Moreover, if overconfident individuals are more likely to be risk-prone then by promoting them we may be creating institutions, including banks and armies, which are more vulnerable to risk."

[ ...] Self-deception - individuals' false beliefs about their abilities – is widespread in humans. People consistently overrate their capabilities [1], [2], suffer from positive illusions [3] and deny their disabilities [4]. We are remarkably prone to both overconfidence - reflecting inflated beliefs about our abilities - and underconfidence arising from a negative self-image [5]–[7]. These biased beliefs can lead to costly errors with disastrous consequences including airplane crashes, financial meltdowns and war [5], [6], [8], [9]. Why is this potentially harmful trait so common? A controversial theory proposes that self-deception has evolved to facilitate the deception of others [5], [6], [8], [10]. Self-deceived individuals may be less likely to produce cues, such as stress, that reveal deception [5]. [See, internal citations]

[2] Zengdan Jian, Wenjie Zhang, Ling Tian, Wei Fan, and Yiping Zhong, "Self-Deception Reduces Cognitive Load: The Role of Involuntary Conscious Memory Impairment", National center for Biomedical Information, NIH, Front Psychol. 2019; 10: 1718.
Published online 2019 Jul 30. doi: 10.3389/fpsyg.2019.01718 ,

This is a fascinating and multi-faceted study that showed several highly significant aspects about how deception and self-deception related to perceived social status. The authors at Wuhan Normal University, China found support for earlier studies that had shown that conscious deception involves cognitive load on the part of the liar, so human beings have adapted by developing unconscious mechanisms of involuntary self-deception to relieve the psychic strain associated with deception. What is particularly important about this study, however, is that it demonstrates that test subject were more likely to self-deceive (submerge or falsify memory through Involuntary Conscious Memory (ICM)) when they attempt to deceive persons of high social status (instructors) than when deceiving persons of low status (other students). The authors follow previous theory that ICM operates to lessen the uncomfortable cognitive load associated with falsification of Voluntary Conscious Memory (VCM) experienced by most people when they intentionally lie, particularly to persons perceived as socially superior authority figures.

While the authors do not explicitly draw this conclusion, one may infer that there are a number of socio-psychological and political implications to this. The first is that persons who have a high propensity for self-deception when deceiving others are less likely to display stress when lying, and will be perceived by many as more candid or as having a truthful demeanor. Therefore, this research can be viewed as confirming the conclusion drawn by others that self-deception that deceives others can be an evolutionary adaptive trait.

The ability to convincingly deceive through self-manipulation of ICM is likely to be a social advantage to some in certain circumstances -- such as a gambler bluffing while playing cards (or in making some business deals), or to a politician giving a speech that contains misleading promises, or an intelligence operative who hopes to deceive a polygraph operator (or an interrogator attempting to develop rapport and trust of a prisoner). The ability to deceive with a natural ease through self-deception may have learned rewards for some persons, particularly in occupations where deception is common and held to be necessary. Indeed, those who can effectively manage ICM will be naturally drawn to fields and organizations where this advantage is rewarded.

An additional inference that can be drawn from this line of research is that the propensity to self-deceive to avoid displaying stress may also develop as a psychological coping or defense mechanism following psychologically traumatic experience, such as humiliation by an abusive or over-demanding parent or as a result of adult PTSD. The learned ability to temporarily block feelings of guilt or regret may be common result of traumatic experience such as combat veterans, and it would explain the resulting lack of compassion and empathy associated with several psychiatric conditions, including malignant narcissism.

Indeed, ICM can have serious and far-ranging psychiatric and functional implications in other contexts. Such a tendency to self-deceptive submerge memory through ICM would be very disadvantageous, for instance, during academic test-taking or other stressful situations where accurate recall of information is necessary, and it could be a disastrous trait for the individual and others if it affects a military officer or high official at critical moments of extreme danger. Furthermore, while this study does not address it, there is the very real danger that the memory alteration associated with VCM over time becomes increasingly less temporary, and a habitual self-deceiver could come to take over the cognitive processes and interpersonal relations of the individual, resulting in clinical personality disorder or dementia. I conjecture that this is what has apparently occurred with Donald Trump.

Another unstated implication of these findings about ICM vs. VCM and status is that a genuinely highly honest individual who disregards status considerations and is calm and self-confident in social dealings will be less prone to involuntary memory loss or falsification and its attendant complications. Nonetheless, traumatic experience

Abstract:

"The current research used three experiments to examine the impact of social status and cognitive load on self-deception, and further to explore the inner connection about cognitive load and self-deception. The results found that deceiving individuals of high social status can play a role through the intrinsic mechanism of involuntary conscious memory (ICM)."
[...]

"Self-deception is a personality trait and an independent mental state, it involves a combination of a conscious motivational false belief and a contradictory unconscious real belief (von Hippel and Trivers, 2011). The forward-looking paradigm is widely used in self-deception research field to examine how self-deception influences predictions of the future (Chance et al., 2011; Yang, 2017; Ren et al., 2018; Liu et al., 2019). Participants take tests that assess their general knowledge and IQ. The paradigm includes three phases. In the first phase, participants are given the opportunity to view an answer key while taking an initial test; in the second phase, participants are asked to predict their future performance on a similar second test that lacks an answer key; in the third phase, participants take the second test, and the actual test score is recorded (Chance et al., 2011). Chance’s study found that compared with the control group, the self-deception group predicted significantly higher scores on the second test that were much higher than their actual test scores (the self-deception group had the opportunity to view an answer key while taking the initial test, whereas those in the control group did not have this opportunity). And a new study that used the forward-looking paradigm found that this paradigm can effectively indicate the existence of deception and that individuals of high social status are better able to control themselves and reduce self-deception (Ren et al., 2018).
"With regard to the theoretical difference between deception and self-deception, previous studies have provided some explanations. Lu (2012) suggested that self-deception functions as a strategy in interpersonal communication to deceive others from the perspective of evolutionary theory. Because it is possible to deceive others directly, individuals can deceive themselves and then “honestly” send an incorrect message to the other party, such as withholding fitness-enhancing information from both oneself and others. Self-deception as an adaptation must cease to operate in most instances once the goal of deception has been achieved. Truthful information that has been kept from both oneself and others will then be retrieved to benefit the self. It is likely that this information manipulation co-opts memory to execute self-deception.
"In human deception, cognitive load is an important indicator in recognizing deception (Trivers, 2011). Previous studies have shown that cognitive load reveals deception, but there are additional costs: the requirements of working memory reduce performance in challenging areas (Schmader and Johns, 2003) and damage social function (Hippel and Gonsalkorale, 2010). According to the theory of limited cognitive resources (Sweller, 1988), individual cognitive resources are generally limited. If too many cognitive resources are consumed, the cognitive load will be larger (Barrett et al., 2007; Van Dillen and Koole, 2007). While most people need to distinguish fact and lie, the deceiver needs to make sure that fact can be hidden and that lie can be supported. Two conflicting messages must exist at the same time, so a high cognitive burden is required. Based on the related research on self-deception and cognitive load, the current study proposed that, while self-deception provides a way to avoid this cognitive load, deceivers can convince themselves that their deception is indeed true, and they no longer need to maintain the truth of the event while highlighting the lie. On the contrary, by believing the lies they tell others, they can relax and focus on other things. Based on the theory of limited cognitive resources, can people reduce their cognitive load by deceiving themselves to avoid the cognitive cost of deceiving?

[3A] Stephen A. Diamond, Psychology Today, "Lies, Self-Deception, and Malignant Narcissism: Who is most susceptible to being manipulated by narcissists?" (Oct 11, 2017), https://www.psychologytoday.com/us/blog/evil-deeds/201710/lies-self-dece...
Diamond lists several social psychoses associated with malignant narcissism character type. Among the most interesting are cult phenomena and co-dependency condition,
"Folie a deux is an idiomatic French expression meaning "craziness of two." This syndrome was formerly referred to diagnostically in the American Psychiatric Association's DSM-IV-TR as Shared Psychotic Disorder, one of the several types of psychosis. (It is no longer considered a distinct psychiatric disorder by DSM 5, being instead subsumed under Other Psychotic Disorder.) It is essentially a delusional disorder.
[...]
A concrete illustration of this [codependent] dynamic can be seen in cults of various kinds, in which passive followers fanatically internalize the charismatic leader's grandiose and paranoid delusions. If and when susceptible followers leave the cult, these symptoms tend to diminish over time. Often gifted with the ability to influence and motivate the masses through the power of oration, manipulation, and apocalyptic vision, such leaders, as psychologist Henry Murray observes, become the "incarnation of the crowd's unspoken needs and cravings." Such inflated individuals see themselves as prophets, saviors, messiahs. But they are false prophets. At the same time, much like the mythic figures of the Antichrist in Christianity, Armilus in Judaism, and Masih ad-Dajjal in Islam, they are in fact not merely false prophets, but, even more perniciously and fatefully, they become the very embodiment of evil and perpetrators of grotesquely evil deeds. Think Charles Manson, Jim Jones, David Koresh, Adolf Hitler, Osama bin Laden, Abu Bakr Al-Baghdadi, North Korean dictator Kim Jong-Un, and others. The denial or refusal to recognize this insidious form of evil, a self-deceptive state of mind existential psychologist Rollo May referred to as pseudoinnocence, renders one highly susceptible to manipulation."

[3B] Diamond, S. (2017B), Psychology Today, "Lies, Self-Deception, and Malignant Narcissism : Who is most susceptible to being manipulated by narcissists? " (Oct 11, 2017), https://www.psychologytoday.com/us/blog/evil-deeds/201710/lies-self-dece.... Diamond cites a study that fully half of the 37 U.S. Presidents studied showed some diagnostically significant mental illness. Davidson, Connors & Schwartz (2006), https://www.researchgate.net/publication/7310931_Mental_illness_in_US_Pr...
Diamond observes about the symbiotic relationship between narcissistic leaders and their most loyal followers: "fanatic followers suffer from a profound sense of inferiority, frustration, emptiness, meaninglessness, and powerlessness. They feel small and insignificant. In the success, celebrity, and grandiosity of the narcissistic personality, they perceive someone who expresses and embodies the exact opposite of these negative feelings about themselves. They need desperately to lionize, admire, and worship the narcissist, which is precisely what makes them so willing to permit themselves to be deceived and manipulated by the narcissist. These individuals live vicariously through the narcissist, reveling in his or her celebrity as if it was their own. These people need the narcissist in order to feel better about themselves and their own seemingly insignificant existence. For them, the narcissist fulfills the psychological (sometimes spiritual) role of a savior or messiah.

[4] James Hearn, ”Interpersonal Deception Theory: Ten Lessons for Negotiators", posted
September 2006, https://www.mediate.com/articles/hearnJ1.cfm
Hearn is an attorney expert on mediation and negotiations applied to Bioethics. He writes about Interpersonal Deception Theory (IDT) from the perspective of understanding the sources and indicators of deception in negotiations. He cites some valuable sources from the parallel field of Communications Theory that indicate that deceptive communication is very common in interpersonal relations as well as commercial messaging and political speech, and that the average person is not as good at detecting deception as they believe:
" It has been estimated that “deception and suspected deception arise in at least one quarter of all conversations.” [1]
"Interpersonal Deception Theory: Interpersonal Deception Theory (“IDT”) attempts to explain the manner in which individuals while engaged in face-to-face communication deal with, on the conscious and subconscious levels, actual or perceived deception. IDT proposes that the majority of individuals overestimate their ability to detect deception.
"The genesis of IDT is the paper by the same name published by two communications professors, David B. Buller and Judee K. Burgoon, in 1996. [2] Prior to this study deception had not been fully considered as a communication activity. Rather, the work had focused upon the formulation of principles of deception. These principles were derived by evaluating the lie detection ability of individuals observing unidirectional communication. These early studies found initially that “although humans are far from infallible in their efforts to diagnose lies, they are substantially better at the task than would result merely by chance.” [3]However, this assertion should be contrasted with subsequent statements made by the same researchers. For instance, DePaulo has estimated the human ability to detect deception at 53%, which she states is “not much better than flipping a coin.” [4] She has also stated that “human accuracy is really just better than chance.” [5]
"Buller and Burgoon posit that in most cases people find themselves not merely observing, but actually interacting with persons who are less than honest."
We take from Hearn and his sources that deception is transactional and interpretative. In order to succeed (in the sense of not being disregarded), some degree of credibility must be established on the part of the deceptor ("sender") that is interpreted as credible and significant, if not well intended, on the part of the receiver. Usually, deception exhibits strained or unnatural effort (IDT terms it "non-strategic display"), as the sender must try harder to reconcile complex, conflicting messages, and attempts (usually unsuccessfully) to camouflage them. The momentary cognitive lapses (overload) that accompany the process of camouflage in verbal communication is termed "leakage", which the authors postulate to be an indicator or tell of deception. This observation lines up with the neurocognitive and psychosocial research cited in other footnotes.

[5] Jonathan R. T. Davidson, MD, Kathryn M. Connor, MD, and Marvin Swartz, MD "Mental illness in U.S. Presidents between 1776 and 1974: A review of biographical sources", The Journal of Nervous and Mental Disease • Volume 194, Number 1, January 2006. Authors present the findings of a panel of experienced psychiatrists who independently reviewed for the correspondence of behaviors, symptoms, and medical information in source material to DSM-IV criteria for Axis I disorders. Levels of confidence were given for each diagnosis. Eighteen (49%) Presidents met criteria suggesting psychiatric disorder: depression (24%), anxiety (8%), bipolar disorder (8%), and alcohol abuse/dependence (8%) were the most common. In 10 instances (27%), a disorder was evident during presidential office, which in most cases probably impaired job performance.

[6] Kim B. Serota, Timothy R. Levine, & Franklin J. Boster, Human Communication Research 36 (2010) 2–25 (2010) "The Prevalence of Lying in America: Three Studies of Self-Reported Lies", This study asks, who lies most in society, and how often? It is notable that the authors noted a "dearth of deception prevalence research" into this basic question. What they did find is that a small percentage of people tell the vast majority of lies, and they are highly adept at it, speculating these individuals are particularly well disguised by a truthful demeanor:

"The current findings suggest substantial individual differences for truth telling (or lying) with an honest majority and a few prolific liars. Bond and DePaulo (2008) report substantial variation in both people’s demeanor and people’s ability to lie. People’s ability to lie successfully likely impacts how often they lie (Kashy & DePaulo, 1996). We speculate that the prolific liars are likely those people with especially honest demeanor and that unusually transparent liars avoid lying. If most lies outside the laboratory are told by people who are usually believed, lie detection rates would be lower than those observed in randomized experiments.

[7] Jack Holmes, Esquire, "So, Does George Conway Have a Point About President Trump and Narcissistic Personality Disorder?" Mar 22, 2019,
https://www.esquire.com/news-politics/a26908483/george-conway-president-... Cites book of essays written by 37 psychiatrists and mental health experts acting with a "duty to warn," where a counselor or therapist must tell a third party if they think a patient poses a threat to themselves or others. https://books.google.com/books/about/The_Dangerous_Case_of_Donald_Trump..... Among the book authors quoted, include:
“A President or anyone else having a mental health disorder does not, in and of itself, rise to a level of concern that would cause me to make a public statement on that topic as a mental health professional. It is the combination of a disorder and the propensity for dangerousness that causes me to speak out in the public interest. In answer to your question, while a provisional diagnosis of Narcissistic Personality Disorder is so likely that most laypersons offer that description, I believe Antisocial Personality Disorder is much more important as a rule out…Additionally, I believe a neurocognitive disorder, such as the onset of dementia, is very important to rule out, especially as it is in his immediate family history.” —Diane Jhueck, LMHC

[8] Keiko Krahnke and Isaac Wanasika, "Minimizing strategic deception through individual values", Journal of Academic and Business Ethics, www.aabri.com/manuscripts/10718.pdf
The authors find that CEOS and, to some extent, academics in the field of Business Ethics are responsible for the perpetuation of "strategic deception", and identify societal lags in legal definition of criminal business behavior (frauds) and tortious wrongs. Deceptions that would be found unethical in other contexts are accepted in business. Without stating as much, this points out a major problem of corporate leaders elected to public office on the basis of "running government like a business", and then governing accordingly. They cite sources, as follows:
”Within the corporate environment, it is widely held that strategic deception is a legitimate part of the strategic process. Scholars have hypothesized on different dimensions of deception such as feints, gambits and curveballs (McGrath, Chen & McMillan, 1998; Hendricks & McAfee, 2006; Stalk, 2006). Deception is not new in strategy and goes back to early writings by Sun Tzu, Machiavelli and Aristotle, among others. Strategic deception refers to strategic actions aimed at misleading rivals from the true strategic intent. Unlike outright unethical practices, strategic deception often falls in the grey area of ethics though it is legally acceptable and, for many firms, normal business practice. CEOs are constantly in an arms race to execute the most effective deceptive strategies, more so in current conditions of globalization, environmental turbulence and intense competitive rivalry. Deception involves creative strategic actions that, in many cases, cannot be identified as unethical or illegal because the actions by their innovative nature do not fall within existing laws and regulation. The corporate competitive environment is full of such strategies. For example, puffery, green-washing, signaling to competitors with misinformation that diverts their attention and increases their costs, structuring complex credit default swaps without specifying underlying risks or narcissistically deploying planned- obsolescence are a few recent acts of strategic deception.

"In most firms, CEOs are responsible for strategic decisions within their firms, including strategic deception. These executives have significant influence over firm strategies and organizations and the strategies they adapt are a reflection of those executives (Hambrick & Mason, 1984; Boal & Hooijberg, 2000; Finkelstein & Hambrick, 1996). It is these senior corporate executives that make strategic choices, deceptive or otherwise and to a large extent, are accountable for resultant firm outcomes. From this perspective, it seems logical to assume that CEOs cause or minimize the amount of deceptive strategies within their organizations.
"Deception has far-reaching consequences. Many organizations take a value-neutral, rational position while implementing competitive strategies and rarely pause to identify by- standing societal stakeholders who could be victims of deception. ... On the contrary, many in executive leadership positions have created a veil of ignorance between their personal ethical values and the values that are practiced within their firms. This may lead some CEOs to operate at multiple ethical levels, resulting to ambiguity and rationalization. Beyond strategic deception, there are ethical concerns regarding the conduct of corporations when interacting with employees and other stakeholders, misuse and waste of the commons, as well as overt pushback against regulations and norms that would create some moral responsibility. While this problem has persisted over the decades, with corporate ethics consistently falling short of expectations, business scholars seem to be disconnected from their ethics counterparts and have shunned from embedding values in business models and decision processes."

[9] Social Anthropologist Karen Ho took a sabbatical from her academic position at Princeton to do field work and produced several monumental studies after taking a job on Wall Street investment firm. The book she produced, Liquidated, is a rare critical inside look at how the culture of deception, and institutional self-selection for traits of greed and dishonesty created the 2008 Meltdown and the wholesale dissolution of industry in America. Liquidated: An Ethnology of Wall Street, Duke University Press, (Durham and London, 2009) Available as PDF free on-line (requires registration): https://www.academia.edu/31109873/Liquidated._An_Ethnography_of_Wall_Str... also see, related, by the same author: 'Disciplining Investment Bankers" AMERICAN ANTHROPOLOGIST, Vol. 111, Issue 2, pp. 177–189, ISSN 0002-7294 online ISSN 1548-1433. C _ 2009 by the American Anthropological Association. (available free on-line as reprint) https://www.academia.edu/15237684/Disciplining_Investment_Bankers_Discip...

[10[ While the Dunning-Kruger Effect is most commonly applied to inexperience people who are insufficiently aware of their intellectual and experiential limitations, the definition has been expanded to include indices of emotional intelligence that include awareness of impact of one's actions on others. This study many people drawn to management and leadership positions are actually emotionally challenged and socially unskilled, and not only unaware if it, by resistant to being made aware of their own emotional and ethical deficiencies. Sheldon, Dunning and Ames, "Emotionally Unskilled, Unaware, and Uninterested in Learning More: Reactions to Feedback About Deficits in Emotional Intelligence", Journal of Applied Psychology 2014, Vol. 99, No. 1, 125–137, http://www.columbia.edu/~da358/publications/Emotionally_unskilled.pdf

[11] See, https://www.nytimes.com/interactive/projects/college-mobility/; https://www.nytimes.com/interactive/2017/01/18/upshot/some-colleges-have...

[12] Mack DeGeurin, "New Study Indicates Silicon Valley’s Elite Are Not As Liberal As They Think", New York Magazine, https://nymag.com/intelligencer/2018/11/study-shows-tech-elites-are-less...

"... a new academic study provides strong evidence that the politics of Silicon Valley elites are less “liberal” than “elite.”
“Predispositions and the Political Behavior of American Economic Elites: Evidence From Technology Entrepreneurs,” a new paper by Stanford researchers David E. Broockman and Neil Malhotra and independent scholar Gregory Ferenstein -- https://doi.org/10.1111/ajps.12408,
https://onlinelibrary.wiley.com/doi/10.1111/ajps.12408 (paywall) -- suggests that tech elites share many of the same political beliefs and presuppositions among themselves — but that those beliefs don’t fall neatly into “liberal” or “conservative” categories as considered by most people. The paper, released in the American Journal of Political Science, suggests that while tech elites by and large associate themselves with Democrats on cultural and social issues, when it comes to government regulations, they are more conservative than the average Republican donor. What’s more, researchers found tech elites hated the thought of regulation more even than non-tech millionaires.

"Broockman and his fellow researchers surveyed nearly 700 wealthy tech leaders in what amounts to the most extensive academic survey of this group to date. The researchers used Crunchbase, an open database run by TechCrunch, to find influential tech players — most of whom were themselves millionaires — and individually emailed each and asked them to fill out a survey.

"The survey asked the tech entrepreneurs questions about their general political policy preferences as well as their predispositions — the underlying and enduring beliefs that shape how these people see the world. On social and cultural issues, tech elites overwhelming aligned themselves with liberal positions: Ninety-six percent surveyed supported gay marriage, 82 percent favored increased gun control, and 67 percent opposed the death penalty. When asked about government regulation and unions, however, the tech elites could not be further from the left. The research found nearly all tech entrepreneurs surveyed think that “It is too difficult to fire workers,” while 74 percent of them said they support weakening labor unions.

"Research found that the tech elites responded with the same anti-regulatory zeal when questioned about other industries as well, as in a question about whether florists should be able to raise prices on flowers during holiday seasons. “It’s not just when you say, ‘should tech be regulated,’ that they don’t like regulation,” Broockman, the paper’s lead author, said in a phone call with Intelligencer. “I don’t think the average technology entrepreneur sees themselves in the same category as a florist, but they still side with them.” On the other hand, the entrepreneurs overwhelmingly favored increased taxes on the rich — that is, themselves — and further redistribution of wealth to poor communities.

"According to Broockman, the Silicon Valley titans may be their own political entity, wielding certain political predispositions that don’t easily map onto U.S. party politics. To support this point, the researchers ran a second experiment, this time on Stanford students. College-age tech students poised to enter the Silicon Valley ranks overwhelmingly responded like their millionaire idols: liberal on social issues, staunchly conservative on regulation."

[13] Maj. John Bayse, "Toxic leadership: the way ahead", U.S. Army War College, Master's Dissertation, http://cgsc.contentdm.oclc.org/cdm/singleitem/collection/p4013coll2/id/3...

[14] Martin, S. R., Côté, S., & Woodruff, T. (2016). Echoes of our upbringing: How growing up wealthy or poor relates to narcissism, leader behavior, and leader effectiveness. Academy of Management Journal, 59(6), 2157–2177. https://doi.org/10.5465/amj.2015.0680 , https://psycnet.apa.org/record/2017-46375-012. This study finds that the U.S. military, because of its culture of accountability, is not a receptive environment for West Point graduates who are assessed to demonstrate narcissistic personality traits that negatively impact indices of leadership that are part of their frequent performance reviews.

Abstract: We investigate how parental income during an individual’s upbringing relates to his or her effectiveness as a leader after entering an organization. Drawing on research on the psychological effects of income, social learning theory, and the integrative trait-behavioral model of leadership effectiveness, we propose a negative, serially mediated association between higher parental income and lower future leader effectiveness via high levels of narcissism and, in turn, reduced engagement in behaviors that are viewed as central to the leadership role. We test our model using multisource data collected from active soldiers in the United States Army. Results reveal that parental income exerts indirect effects on leadership effectiveness criteria because (a) parental income is positively related to narcissism as an adult, (b) narcissism relates negatively to engaging in task-, relational-, and change-oriented leadership behaviors, and (c) reduced engagement in these behaviors relates to lower leader effectiveness.

A review of this study found: https://fisher.osu.edu/blogs/leadreadtoday/growing-rich-can-make-you-a-c...

"Their studies [1] hypothesized that high-income parents are highly capable and independent in terms of financially supporting their children. Therefore, they feel little need to ask for others’ help or to socialize with others. This independence gradually evolves into a reluctance to care about others and, thus, a habitual prioritization of self-interests over others.

"High-income parents model and transmit self-centered behaviors to their children at home. These children mimic and internalize these values and carry them into adulthood.

"A wealthy family can become a narcissistic incubator.

"To prove the researchers’ hypotheses, 229 alumni of the United States Military Academy at West Point were recruited to examine the hypotheses. Results indicated that participants growing up in richer families:

had a higher propensity to view themselves as unique and superior to others
were less empathetic and more impulsive
believed themselves to be deserving of special treatment
dominated in group settings

"In short, the rich kids became narcissists.

"Moreover, when individuals who exhibited narcissistic traits became leaders, they engaged less in “constructive” leadership behaviors, such as information sharing, intellectual stimulation and acknowledging the contributions of subordinates. As the result, leaders with high levels of narcissism were rated as being less effective than low-narcissism leaders."

[15] Professor Vian Bakir, Bangor University, "How to Hold Intelligence Elites Publicly to Account: A Scoping Document for Civil Society" (cites V. Bakir, Intelligence Elites and Public Accountability, Routledge (2018)), available at http://intel-elites.bangor.ac.uk/resources.php The author finds:

"Rather than focusing attention solely on intelligence agencies, it is
more productive to examine ‘intelligence elites’. This comprises the
small number of leaders in interlocking political, economic and
military domains that make fundamental decisions on intelligence
with far-reaching consequences for all citizens. For instance, everyone
is affected by decisions to use torture for interrogations, which can
initiate norm regress concerning hard won, international human rights
as politicians argue that torture works and is a useful policy option in
ticking time-bomb situations; or through bulk data collection of digital
communications, which generates chilling effects on populations
(Bakir 2018).
"The term ‘intelligence elites’ should not imply an omnipotent monolith
steeped in conspiracy. Rather, it evinces the normally close relationship
between top politicians and intelligence agencies (Johnson 2009); the
deferential relationship to intelligence agencies from wider politicians
(Cormac 2016); and secret involvement of private companies that
makes parliamentary scrutiny difficult (Hillebrand 2014).
…periodic failures of internal oversight place an onus on
civil society to publicly and critically interrogate intelligence
elites. Greater public accountability should also increase
transparency and build public trust in intelligence agencies.
5 How to Hold Intelligence Elites Publically to Account Funded by The Bangor University ESRC Impact Acceleration Account
"The term ‘intelligence elites’ further highlights the exclusion of civil society in
oversight of intelligence agencies, which is largely limited to internal intelligence
agency mechanisms, or to secret elements of the legislature and judiciary."

[16] Peter Belmi University of Virginia, Margaret A. Neale, Stanford University, David Reiff and Rosemary Ulfe Lenddo, EFL, Singapore, "The Social Advantage of Miscalibrated Individuals: The Relationship Between Social Class and Overconfidence and Its Implications for Class-Based Inequality", Journal of Personality and Social Psychology:Interpersonal Relations and Group Processes© 2019 American Psychological Association (2019), Vol. 1, No. 999, 0000022-3514/19/$12.00 http://dx.doi.org/10.1037/pspi000018, available free download: https://www.apa.org/pubs/journals/releases/psp-pspi0000187.pdfat:

[17] The Washington Post, Oct. 26, 2018, "Eleven donors have plowed $1 billion into super PACs since they were created", https://www.washingtonpost.com/politics/eleven-donors-plowed-1-billion-i... :

"The largest super-PAC contributors are casino mogul Sheldon Adelson and physician Miriam Adelson, the married couple who have given $287 million to conservative super PACs, records show.

"In the 2016 elections, the Adelsons gave nearly $78 million, including $20 million to bolster then-GOP nominee Donald Trump, who as president backed an action the couple had long sought — moving the U.S. Embassy in Israel from Tel Aviv to Jerusalem.

"This cycle, the Adelsons have given $112 million to super PACs, largely to groups working to help the GOP retain control in Congress.

"A representative for the Adelsons did not respond to a request for comment.

"In second place behind the Adelsons is Steyer, who has given $213.8 million. He is followed by Bloomberg ($123.4 million), Democratic media executive Fred Eychaner ($68 million), Democratic hedge-fund executive Donald Sussman ($62.9 million), Republican shipping-supplies magnate Richard Uihlein ($59.9 million), Democratic hedge-fund founder James Simons and his wife, Marilyn ($57.9 million), Republican hedge-fund executive Paul Singer ($41.9 million), Republican hedge-fund executive Robert Mercer ($40.9 million), Soros ($39.4 million) and Republican backer and TD Ameritrade founder J. Joe Ricketts ($38.4 million).

"Their total giving could be substantially more. While donors to super PACs are disclosed, public filings do not reflect contributions to politically active nonprofit groups that are not required to reveal their donors."

[18] Gilens, M., & Page, B. (2014). Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens. Perspectives on Politics, 12(3), 564-581. doi:10.1017/S1537592714001595,

This is the famous America is an oligarchy study that found that politics is essentially controlled by well-organized elites clustered around a small cadre of extraordinarily wealthy families. Analysis of issues outcomes shows that America does not actually operate as a functional democracy in the sense that majoritarian institutions and policies are not controlled by voters. Abstract:

"Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism."

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OzoneTom's picture

Thank-you very much. I haven't had much time to read here and somehow missed the earlier version you posted.

I will be bookmarking, sharing, re-reading and pondering. There is a lot to assimilate here and it all rings true to my own observation.

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@OzoneTom @OzoneTom I wanted to chase down some sources to back up my gut reaction to events, and am happy to have a place to pull them together and share them. Thanks for reading!

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snoopydawg's picture

I will have to read it more than once to fully take in what’s here.

Tweeted so others can read it. I love this:

Organizational Narcissism
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"It is remarkable that a sitting president would express less than complete confidence in the American democracy’s electoral process."

Hillary: "I'd be president today if Comey, Bernie, Bros and Putin hadn't stolen it from me."

@snoopydawg sources. I didn't make it up:

Duchon, Dennis and Burns, Michael, "Organizational Narcissism" (2008). Management Department Faculty Publications. 91. https://digitalcommons.unl.edu/managementfacpub/91

"We are accustomed to thinking of narcissism
as a human personality trait, but collectivities,
too, can behave ‘narcissistically’. Manfred Kets de
Vries, European Management Journal, 2004, 22, 183–
200; and Kets de Vries and Danny Miller, The Neurotic
Organization (Jossey–Bass Publishers, 1984)
articulate many provocative insights, but the foundation
for the present paper comes from the work
of Andrew D. Brown in Academyof Management
Review, 1997, 22, 643–686. Mark Stein wrote an
interesting paper about organizational narcissism
at Long Term Capital Management in Human Relations
2003, 56, 523–538."

Also, see,
International Journal of Economics, Business and Finance
Investigating the impact of narcissism on ethical climate in organizations
Vol. 1, No. 6, July 2013, PP: 142 -153, ISSN: 2327-8188 (Online)
Available online at http://ijebf.com/
152
[2] Blair, C. A., Hoffman, B. J., & Helland, K. R. (2008). Narcissism in organizations: A multisource appraisal reflects different perspectives. Human Performance, 21(3), 254-276.

Thanks for reading!

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Cassiodorus's picture

in which the benefits said to accrue through words such as "progress" and "development" are said to accrue to the capital-minded individual through the harvesting of "cheap nature" and the application of "subjective reason." The fact that we are no longer progressing, and that we are not developing much besides new gadgets to be poor with, does not, however, stop the imagined forward march of "subjective reason," nor does it impede the harvesting of "cheap nature." This, then, is what constitutes the twilight of the Age of Utopian Dreaming.

Oh, sure, capitalist organization is garbage, full of reinforced self-deceptions and versions of "subjective reason" that are neither subjective nor rational, glued together like a sort of organizational particleboard through the bandwagon effect. And the people who most fervently subscribe to this garbage are the ones who rise to the top of the corporate hierarchies. Your diary here illustrates that beautifully. Has it ever been different? Back in the Sixties and early Seventies there was this attempt to popularize the "Peter Principle." Do you remember that? The big difference as I see it is that we are no longer progressing. There used to be a sort of utopian surplus which drove things forward, a spirit of "hey things could be different." Now it's all been revealed as a series of cheap attempts to make a buck, fortified with rather little in the way of imagination, thus my series on the failure of imagination. We could have a society based on the gift economy, but it all has to be filtered through the cash nexus, with gatekeepers and fees and such.

Some of the articles you cite, by the way, are restricted behind paywalls. It's ridiculous that we should have to pay to understand each other.

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"Scab of a nation, driven insane" -- Frank Zappa

@Cassiodorus Actually, I didn't pay for any of the articles I cited above. Some of them, such as those from Researchgate, require registration at the site, but no money. If there's anything specifically cited that you can't download without payment, I probably have it saved, and will send a copy to you. Just PM me.

Anyway, what you said about "subjective reasoning" and the inexactness of much of the bleak thinking that informs many important decisions these days reminds me of a long article, "Cognitive Biases Potentially Affecting Judgment of Global Risks," https://intelligence.org/files/CognitiveBiases.pdf

Written by Eliezer Yudkowsky, it's about the mistakes of heuristic estimation that certified smart people are most prone to make. He also has an interesting blog, https://www.lesswrong.com/

Enjoy.

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money drives politics
human issues are secondary
greed driven capitalism is the
only form of democracy in this
glorious empire

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