The End of Normal: Is Trust for Suckers?

Another perspective in my series that considers life after the meltdown.

The other day, Dr. Abu Kambi showed up in my e-mail box.

It seems that for very complicated reasons, the only way the family he represents can get their rightful $40 million deposit from a Nigerian bank is to wire it to a U.S. account, and then have it wired back. If I would be the "legitimate transferee" of that $40 million, I get to keep 20 percent.

All I have to do is establish a $100,000 deposit in a branch of the Central Bank of Nigeria. I can wire it, or bring it myself.

As I adjusted my spam filter, I started thinking about my own bank.

... the one that recently informed me in small print at the bottom of the bill that they were moving up the payment-due date. If I miss that date, the very small print goes on to explain, there will be a penalty or an increase in the rate.

And it struck me. Who is the more dangerous fraud -- Dr. Abu Kambi and his comically brazen attempt to relieve me of $100,000, or the bank whose ads ask for my business and my trust?

It's a question the led me directly to the dismemberment of our financial system.

Nigerians bearing gifts are, after all, what they are. Anyone who wired and lost $100,000 in hopes of an $8 million payday is probably not all that concerned. They can always get it back the next time they catch a leprechaun.

But my bank?

Would those friendly people who know me by name and whose tellers put treats in the canister when I have my dogs at the drive through really try to squeeze me for a few extra bucks with a sleazy slight of small print?

Apparently so - and for the very same reason that a tiny group would-be financial wizards were able to roll the dice with the future of a country: It never occurred to us that they would. We never thought that Adam Smith's "unseen hand" - which the economist argued binds business interest to national interest - would end up giving us the finger.

And even if the wizards would act against our interest, we never imagined that they could. Our government and the rating agencies, after all, are the job. Oops.

Then again, it's not like we haven't been fooled before.

We've learned from pedophile priests that those we trust with our children could harm them. We learned from Katrina that that the person our government assigned to rescue us from natural disaster could be a whimpering idiot. We learned from Iraq that our leaders could lie to engineer a war in the name of a murky geo-political end game. We learned from Enron and MCI that that the letters CEO could stand for: cheat, evade and over-compensate.

But this is something new. Never have so few hurt so many.

This deception is terribly and broadly invasive. It has broken through to our lives, our future, and even our sense of who we are as a people. It is evicting families, shuttering local businesses, obliterating retirements and denying educations.

It may finally be the one where our abiding faith in good intentions invites wounds that leave permanent scars.

When trust is so massively abused in the largest arenas, what happens in the smallest ones? It looks like comedienne Lilly Tomlin was on to something when she said: "Just when you think you're too cynical, you realize you're not cynical enough."

The current truth of that statement points to a very a big problem. Even getting back on the road to normalcy - let alone restoring it - may take a level of cooperation and shared sacrifice that an entire post-war population has never experienced; even contemplated. It is going to demand trust in the very same financial managers and government overseers that caused this mess in the first place. Those who are being asked for their faith and sacrifice will rightly ask: "Why?"

In answering that question, we do have one thing going for us.

We elected a president who appears to be worthy of the trust he is going to need. He does not appear beholden to narrow social or financial interests that can warp a national agenda. He does not appear driven by any personal demons that will cloud his judgment. Nor does he appear to be a man who will run from the inevitable mistakes to come.

We should all hope - pray if works for you - that he proves worthy of a trust that we have never had less reason to give, or needed more.

Comments

[ReHoover51]

i believe this "domestic disaster" is a scam to rob the middle class even more ... where is all the big $$$ going?
how could greenspan just answer he didnt see it coming (you cant spend spend spend like bush did and not raise taxes - it causes depressions - remember high school economics?)
this is just like what happened prior to the depression - the fat cats cause a scare in the markets and everyone panics and the fat cats get new laws and $$$ in their favor ...
its been happening for 100s of years ...
this is to keep the middle class poor and the poor 1 inch short of suicide ...
speak out and stop these liars NOW
do not let the lies spread to the next admin ...

[sollosi]

Peggy, it's interesting that you should mention Nigerian scams, "Trust", and American governance in a span of a few paragraphs. Sadly, the governance by contractors and corporations that have taken hold of America in the past number of years is what exists in countries like Nigeria. Nigeria is totally capitalistic, corrupt, dysfunctional, and by all accounts, a failed state. A great book worth reading for anyone interested in what's really going on in the good ol' US of A is: "The Wrecking Crew - How Conservatives Rule" by Thomas Frank (also the author of "What's The Matter With Kansas?").

America's current dysfunction is deliberately being engineered, and by the time anyone may be able to pick up the pieces, it may be too late. Very soon, American's scams may be more blatant than Nigerians, and soon enough, Americans may need to emmigrate to Asia to secure decent jobs so they can send money home.

[peterg76]

Actually, Adam Smith was very clear on the need for a certain minimum government regulation to prevent abuse. Funny how people keep forgetting that part.

[HMDMSR]

Where's the new economy? I lost track of it back in the 90's. No more recessions. DJIA to break 100,000.

[Scarabus]

The moment our nation began basing the value of our currency on our national credit rather than precious metal, our entire financial system was, well, trusted to trust. Every time we use coins (except for pennies, the value of whose copper is worth considerably more than the coin's face value) or paper money, we affirm our trust. Move to credit cards? Then we, merchants, political campaigns, etc. geometrically increase our dependence on trust. Same with electronic transfer of funds and a gazillion other instruments.

Anyone who pays the bill for accessing the internet to read Huff-Po is doing so on the basis of trust. Unless the user's ISP and access provider are willing to barter services for, say, livestock or grain, that is. Why are people hesitant to shop this holiday season? They lack trust. Why are lenders reluctant to make loans for cars or houses? They lack trust. Why are investors skittish about buying securities? They lack trust.

Sorry. Too verbose. Huff-Po dissed me. The rest is posted on my own blog:

http://www.agrippinaminor.com/wp/

[RetireGreen]

As an ex-banker the practice has been around for a long time - it's called nickle and dime. Banks love it when you bounce checks, use other people's ATM's, are late paying bills etc.

[BaffledCanadian]

I want to see a "Most Wanted" list of those CEOs whose firms participated in this greed stampede. They get a choice: They can resign with no severance package and repay 5 years' salaries & bonuses OR They can face criminal fraud charges and civil charges related to abdicating their duties and responsibilities.
They have no shame, Merrill Lynch CEO today demanding a bonus.
There can be no trust, no reconciliation without truth and justice first.

[PATina]

Yes... Trust is for suckers.

[ReasonIsMyReligion]

"Trust by verify."
-- Ronald Reagan.

Gawd, I hate quoting Republicans with a straight face.

[SpaghettyIrish]

Republicans don't even believe in that level of oversight anymore, unless you actually work for a living. Oh wait, that's how it's always been. Free money for Contras and autocratic dictators and now bankers bloated beyond Gordon Gekko's greedy dreams, but if there's even lip-service about working people, never mind what's left of the manufacturing middle class, forget it. they should just go bankrupt and die.

[EngineerBill]

The logic of the so called "invisible hand" can e shown to be flawed by looking at transportation as an example. People, after all want themselves and their goods moved safely from point a to point b. Car manufacturers know that people would not drive unsafe vehicles. So according to the "invisible hand" theory, no vehicle safety or traffic safety laws would be required. We know this to be nonsense. Now ,when it comes to money, we have learned this the hard way.

[ReasonIsMyReligion]

Adam Smith is rolling in his grave.

-- a P.E.

[bayside]

I believe the people have awaken and will demand honesty and integrity back in our govt. media and corp. ..We will get it if we work to that end..This 1 per cent rich taking everything from 99 per cent is going to stop..Goes the same for our freedoms they have taken ,in guise to save us..

[miroslodki]

Peggy

is the failing of the Financial Engineers ( I hate the term) and the risk-sanitized greed they let loose on WallStreet any different from the short -termism that affects the market all these years?

I have ranted elsewhere that companies derive their value from customers, not from investors.
yet we have an executive suite that (still) seems to be preoccupied with meeting investor expectations

where have these investors been to add value or come to the aid of their investment? If they were smaller, fewer in number or at any other point in the economic cycle ---- they'ld be in chapter 11.

And why is it that companies - while downsizing to protect their profit margin - expect to count on the apprehensive consumer market place to sustain their profits. Offloading the problem onto someone else - doesn't solve the problem. I hope there is someone in leadership that draws public attention to this simple dynamic and brings an end to it. As consumers, we should rally around those companies that are supporting and not unloading their 'valued' employee/resource.

[tomas0808]

and now these Corporations are essentially asking for a bailout from the consumer as well in the form of buying more junk. I say no. I'm not buying anything except the bare necessities. But then, that's what I've been doing for years

[luziannagirl]

Free market. What a farce.

Market forces. What a load.

If taxpayers---the commonwealth in which Free Marketteers infamously don't believe---- are to bail out the vaunted "Free Market", then taxpayers should get something in return. How about... toothy regulations preventing some of the horrible consumer abuses we've all become sadly accustomed to, and which have gone a long way in sapping our trust in our communities, our leaders, our economy, and our country? How about that?

When "market forces" call for a "correction", but instead, We the People pick up the tab and enable the cheaters to keep cheating and swindlers to keep swindling, we have defeated the free market itself.

"Free to Fail" is the flip side of "Let the Buyer Beware".

[BBackSoon]

My favorite bank ploy is the fact that if I take money out of my bank as soon as they see the check the money is out of my account. But if I made a deposit it can take days or weeks for the money to show up. I think it is BS if I move a few thousand around and make a deposit with a Certified Check that the money will not be available for 5, 10 or 15 business days. We live in a time of instant information. Can"t they just verify with the issuing bank the amount and if it is good. Oh wait they do they just sit on my money for those days.

Now let us take a cash deposit. If I deposit say $100 in cash in my account the deposit is not available to my account until the next day? I have been on business trips and needed cash and my checking account is dry. So my wife at home puts money (Cash) into the account so I can access it hundreds or thousands of miles away but it won"t be there till the next day? But again, if I withdrawal that same cash, it is out of my account by the time the machine spits out the bills.

I realize this is just a minor part but it is a very visible part of the banking scam. It is no wonder many people don"t trust banks.

[tomas0808]

For some of us, trust died a long time ago. For some, we always knew. My dad always said debt equaled slavery. When I graduated high school in 1979, I realized what he was talking about. The house that I'd grown up in, and that he'd had to sell in 1966 for twenty grand, was two hundred grand. At that point I realized I could get a job and have a down payment for a house in five-ten years, but what was to stop the house I wanted from being three hundred grand, or four, or five by the time I would have the down payment. This is when I realized that banks couldn't be trusted. I simply refused to take out some thirty year mortgage for a 300,000 dollar house when that house should be (if it had been tied to the general inflation rate) 100,000. Of course that meant that the American Dream (or American Fantasy, is more like it) was not possible, but I had too much pride to be a slave to the banks.

And the scam continues. My mom has been getting mail from a company called Essence (some medical junk that wants her to switch from Secure Horizons) and their letters are disguised to look like IRS or Government documents. I reported them to my Rep.

This is the new reality. Check your bank acct online every two hours to make sure no one is ripping you off, etc etc. It's sick

[kellygrrrl]

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