August 5, 2012
from
WashingtonsBlog Website
Are The Inmates
Running the Asylum?
We’ve extensively documented that
sociopaths in D.C. and on Wall Street
caused the financial crisis.
But we didn’t realize how many people are sociopaths.
Psychologist
Martha Stout - who - clinical
instructor in psychiatry at Harvard Medical School for 25 years - estimates
in her book
The Sociopath Next Door that as many as
4% of the population are conscienceless sociopaths who have no empathy
or affectionate feelings for humans or animals.
4% might not sound like much. But - using the U.S. as an example, that means
that
12 million Americans are sociopaths.
Because sociopaths are ruthless and will squash their rivals and burn
institutions to the ground in order to reach their goals - but great at
pretending that they care about people - they are incredibly destructive.
Sociopaths would have been discovered very quickly in a small group. But in
huge societies like ours, they can rise to positions of power and influence.
Unless we learn to spot “wolves in sheep’s clothing”, we will continue to
fall prey to their scams.
Note: Other mental health
experts put the percentage of sociopaths at 1-3% of the population, which is
3-9 million Americans.
Why Don’t The Corrupt Players on Wall Street and in
D.C. Show Remorse for Their Destructive Actions…
And Why Don’t We Stop Them?
by WashingtonsBlog
July 14, 2012
from
WashingtonsBlog Website
Scandal After Scandal,
Lie Upon Lie… What’s Going On?
Many bankers, regulators and politicians have been caught in lie after lie
and scandal after scandal.
-
Why haven’t they been shamed by all of
the disclosures about their behavior, and chastised by the
destruction their actions are causing?
-
Why do we keep falling for the same
shenanigans over and over?
We’ll answer each of these questions one at a
time.
Many of the People Running
Wall Street and D.C. Are - LITERALLY - Psychopaths
According to psychologists and sociologists - many on Wall Street and D.C.
are not like you and me. They are literally psychopaths.
Reuters
reported Tuesday:
In a survey of 500 senior executives in the
United States and the UK, 26 percent of respondents said they had
observed or had firsthand knowledge of wrongdoing in the workplace,
while 24 percent said they believed financial services professionals may
need to engage in unethical or illegal conduct to be successful.
Sixteen percent of respondents said they would commit insider trading if
they could get away with it, according to Labaton Sucharow. And 30
percent said their compensation plans created pressure to compromise
ethical standards or violate the law.
A number of commentators think the numbers are
low, because of self-reporting.
For example, Richard Eskow
writes:
I discussed the survey with a few other
people familiar with the banking industry, and they had the same
reaction I did: If anything, those numbers sound low. That makes sense.
Admitting your criminal inclinations to a total stranger isn’t as easy
as telling a them your favorite color or what kind of music you like.
As we’ve repeatedly noted,
psychopaths caused the financial crisis…
and they will do it again and again unless they are removed from power.
The March/April issues of CFA Magazine
notes that the rates of psychopaths in Wall
Street is much higher than the general population, and reports:
These “financial psychopaths” generally lack
empathy and interest in what other people feel or think.
At the same time, they display an abundance
of charm, charisma, intelligence, credentials, an unparalleled capacity
for lying, fabrication, and manipulation, and a drive for thrill
seeking.
A financial psychopath can present as a perfect well-rounded job
candidate, CEO, manager, co-worker, and team member because their
destructive characteristics are practically invisible.
They flourish in fast-paced industries and
are experts in taking advantage of company systems and processes as well
as exploiting communication weaknesses and promoting interpersonal
conflicts.
Bloomberg
notes:
The “corporate psychopaths” at the helm of
our financial institutions are to blame [for the financial crisis].
Clive R. Boddy, most recently a professor at the Nottingham Business
School at Nottingham Trent University, says psychopaths are the 1
percent of “people who, perhaps due to physical factors to do with
abnormal brain connectivity and chemistry” lack a “conscience, have few
emotions and display an inability to have any feelings, sympathy or
empathy for other people.”
As a result, Boddy argues in a recent issue of the Journal of Business
Ethics, such people are “extraordinarily cold, much more calculating and
ruthless towards others than most people are and therefore a menace to
the companies they work for and to society.”
How do people with such obvious personality flaws make it to the top of
seemingly successful corporations? Boddy says psychopaths take advantage
of the “relative chaotic nature of the modern corporation,” including
“rapid change, constant renewal” and high turnover of “key personnel.”
Such circumstances allow them to ascend
through a combination of “charm” and “charisma,” which makes “their
behaviour invisible” and “makes them appear normal and even to be ideal
leaders.”
***
They “largely caused the crisis” because their “single- minded pursuit
of their own self-enrichment and self- aggrandizement to the exclusion
of all other considerations has led to an abandonment of the
old-fashioned concept of noblesse oblige, equality, fairness, or of any
real notion of corporate social responsibility.”
***
He says the unnamed “they” seem “to be unaffected” by the corporate
collapses they cause.
These psychopaths “present themselves as
glibly unbothered by the chaos around them, unconcerned about those who
have lost their jobs, savings and investments, and as lacking any
regrets about what they have done. They cheerfully lie about their
involvement in events, are very convincing in blaming others for what
has happened and have no doubts about their own worth and value.
They are happy to walk away from the
economic disaster that they have managed to bring about, with huge
payoffs and with new roles advising governments how to prevent such
economic disasters.”
The Independent
reports:
Mr Boddy is not alone.
In Jon Ronson’s widely acclaimed book The
Psychopath Test, Professor Robert Hare [the world's leading expert on
psychopathy] told the author:
“I should have spent some time inside
the Stock Exchange as well. Serial killer psychopaths ruin families.
Corporate and political and religious psychopaths ruin economies.
They ruin societies.”
***
A senior UK investment banker and I [were] discussing the most
successful banking types we know and what makes them tick. I argue that
they often conform to the characteristics displayed by social
psychopaths. To my surprise, my friend agrees.
He then makes an astonishing confession:
“At one major investment bank for which
I worked, we used psychometric testing to recruit social psychopaths
because their characteristics exactly suited them to senior
corporate finance roles.”
Here was one of the biggest investment banks
in the world seeking psychopaths as recruits.
***
A 2,200-page report by Anton Valukas, the Chicago-based lawyer hired by
a US court to investigate Lehman’s failure … revealed systemic chicanery
within the bank; he described management failures and a destructive,
internal culture of reckless risk-taking worthy of any psychopath.
So why wasn’t Mr Fuld spotted and stopped? I’ve concluded it’s the good
old question of nature and nurture but with a new interpretation.
As I see it, in its search for never-ending
growth, the financial services sector has actively sought out monsters
with natures like Mr Fuld and nurtured them with bonuses and praise.
***
Take Sir Fred Goodwin of RBS, for example. Before he racked up a
corporate loss of £24.1bn, the highest in UK history, he was idolised by
the City. In recognition of his work in ruthlessly cutting costs at
Clydesdale Bank he got the nickname “Fred the Shred”, and he played that
for all it was worth.
He was later described as “a corporate
Attila”, a title of which any psychopath would be proud.
We’ve previously
observed that researchers have found that
the brains of psychopaths have a dopamine abnormality which creates a drive
for rewards at any cost, and causes them to ignore risks.
As PhysOrg
writes:
Abnormalities in how the [brain] processes
dopamine have been found in individuals with psychopathic traits and may
be linked to violent, criminal behavior.
***
The brains of psychopaths appear to be wired to keep seeking a reward at
any cost, new research from Vanderbilt University finds. The research
uncovers the role of the brain’s reward system in psychopathy and opens
a new area of study for understanding what drives these individuals.
***
The results
were published March 14, 2010, in
Nature Neuroscience.
“Psychopaths are often thought of as
cold-blooded criminals who take what they want without thinking
about consequences,” Joshua Buckholtz, a graduate student in the
Department of Psychology and lead author of the new study, said.
“We found that a hyper-reactive dopamine
reward system may be the foundation for some of the most problematic
behaviors associated with psychopathy, such as violent crime,
recidivism and substance abuse.”
***
To examine the relationship between dopamine and psychopathy, the
researchers used positron emission tomography, or PET, imaging of the
brain to measure dopamine release, in concert with a functional magnetic
imaging, or fMRI, probe of the brain’s reward system.
***
The researchers found in those individuals with elevated psychopathic
traits the dopamine reward area of the brain … was much more active
while they were anticipating the monetary reward than in the other
volunteers.
Experts also tell us that many politicians also
share traits with serial killers.
Specifically, the Los Angeles Times
noted in 2009:
Using his law enforcement experience and
data drawn from the FBI’s behavioral analysis unit, Jim Kouri has
collected a series of personality traits common to a couple of
professions.
Kouri, who’s a vice president of the National Assn. of Chiefs of Police,
has assembled traits such as superficial charm, an exaggerated sense of
self-worth, glibness, lying, lack of remorse and manipulation of others.
These traits, Kouri
points out in his analysis, are common
to psychopathic serial killers.
But - and here’s the part that may spark some controversy and defensive
discussion - these traits are also common to American politicians.
(Maybe you already suspected.)
Yup. Violent homicide aside, our elected officials often show many of
the exact same character traits as criminal nut-jobs, who run from
police but not for office.
Kouri notes that these criminals are psychologically capable of
committing their dirty deeds free of any concern for social, moral or
legal consequences and with absolutely no remorse.
“This allows them to do what they want,
whenever they want,” he wrote. “Ironically, these same traits exist
in men and women who are drawn to high-profile and powerful
positions in society including political officeholders.”
***
”While many political leaders will deny
the assessment regarding their similarities with serial killers and
other career criminals, it is part of a psychopathic profile that
may be used in assessing the behaviors of many officials and
lawmakers at all levels of government.”
We will therefore remain disempowered if we
assume that the super-elites are “like us”.
Note: Indeed, contrary to
common American stereotypes - and while wealth does not necessarily indicate
whether someone is a good or a bad person - studies show that the
super-wealthy tend to be
less empathic and
more likely to cheat than those with more
modest wealth.
Unless we learn to spot “wolves in sheep’s clothing”, we will continue to
fall prey to their scams.
Unless We Remove the
Psychopaths from Power, They Will Cause More and More Destruction
The inmates are still running the asylum.
Anyone who knows Jamie Dimon, Lloyd Blankfein or the other
Wall Street “leaders” can tell you that they haven’t changed a bit since
2008.
They are not repentant for their role in the
financial crisis. They don’t feel bad that the taxpayers have had to bail
them out again and again… and that they have used that money to enrich
themselves and stick it to the little guy.
As the Independent
notes:
Mr Ronson reports:
“Justice departments and parole boards
all over the world have accepted Hare’s contention that psychopaths
are quite simply incurable and everyone should concentrate their
energies instead on learning how to root them out.”
But, far from being rooted out, they are
still in place and often in positions of even greater power.
As Mr Boddy warns:
“The very same corporate psychopaths,
who probably caused the crisis by their self-seeking greed and
avarice, are now advising governments on how to get out of the
crisis. Further, if the corporate psychopaths theory of the global
financial crisis is correct, then we are now far from the end of the
crisis. Indeed, it is only the end of the beginning.”
I’ve been
saying the same thing since 2008:
Ralph Waldo Emerson said:
“Who you are speaks so loudly I can’t
hear what you’re saying.”
Its like a thief who has been arrested 5
times for burglary. Even though he says all the right things to the
judge at sentencing, the judge is still going to throw the book at him.
If the thief is appointed to head a government commission on corruption,
do you think people will have confidence in the commission or its
proposed actions?
***
[Those in power] may be saying nice things about fixing the economy,
shoring up the financial system and helping American citizens, but
people don’t believe them anymore. They’ve been proven liars one too
many times.
***
The only thing that can restore confidence in the economy and the
financial system is to replace the whole lot of them (tar and feather
them) with honest leaders who will do what’s best for the people.
Forget the “toxic debt” that the talking heads keep referring to. The
only way to restore confidence is to get rid of the “toxic leaders” who
caused the mess.
I
noted in October:
The main demand of the Egyptian protesters
was that Hosni Mubarak and his cronies leave power.
Why should the demands of the American protesters be held to a higher
standard?
As former IMF chief economist Simon Johnson
notes, the American finance industry
has effectively captured our government in a “quiet coup”, a state of
affairs that is at the center of many emerging-market crises, and that
recovery will fail unless we break the financial oligarchy that is
blocking essential reform.
***
The U.S. has become a
kleptocracy, an
oligarchy, a
banana republic, a
socialist or fascist state… which acts
without the consent of the governed. There is a
malignant symbiotic relationship between the governmental leaders and
their cronies, which makes a handful rich at the public trough (in
the same way that
the Mubarak family raked in between U.S. $40 and $70 billion dollars
through bribes and cronyism).
Remember, Mubarak pretended that he was going to offer concessions or
negotiate several times. But the protesters would have none of it. They
demanded Mubarak leave.
The same government despots (Bernanke and the rest of the
knuckleheads
at the Fed, Geithner, and various other Goldman alums and
protégés of
Robert Rubin) and the same Wall Street manipulators (Blankfein, Dimon,
etc.) are still on their thrones causing mischief. Nothing will change
while these guys are still in charge.
Why can’t Americans - like the Egyptians - demand that the bums be
thrown out?
While America’s protesters don’t need to give any list of official
demands (see
this,
this and
this), breaking up the unholy alliance which
is destroying our country and removing vampires from both government and
Wall Street who are most responsible for blocking reform is a perfectly
good demand all by itself.
As Gordon Duff - senior editor at Veterans
Today - says, it’s “time for regime change” in the U.S.
Why Don’t We Stop
Them?
We’ve previously
noted:
Biologists and sociologists tell us that our
brains evolved in small groups or tribes.
As one example of how profoundly the small-group environment affected
our brains, Daily Galaxy
points out:
Research shows that one of the most powerful ways to stimulate more
buying is celebrity endorsement.
Neurologists at Erasmus University in
Rotterdam report that our ability to weigh desirability and value
doesn’t function normally if an item is endorsed by a well-known face.
This lights up the brain’s dorsal
claudate
nucleus, which is involved in trust and learning. Areas linked to
longer-term memory storage also fire up. Our minds overidentify with
celebrities because we evolved in small tribes. If you knew someone,
then they knew you. If you didn’t attack each other, you were probably
pals.
Our minds still work this way, giving us the idea that the celebs we
keep seeing are our acquaintances. And we want to be like them, because
we’ve evolved to hate being out of the in-crowd. Brain scans show that
social rejection activates brain areas that generate physical pain,
probably because in prehistory tribal exclusion was tantamount to a
death sentence.
And scans by the National Institute of
Mental Health show that when we feel socially inferior, two brain
regions become more active: the insula and the ventral striatum.
The insula is involved with the gut-sinking
sensation you get when you feel that small. The ventral striatum is
linked to motivation and reward.
In small groups, we knew everyone extremely well.
No one could really
fool us about what type of person they were, because we had grown up
interacting with them for our whole lives.
If a tribe member dressed up and pretended he was from another tribe, we
would see it in a heart-beat. It would be like seeing your father in a
costume: you would recognize him pretty quickly, wouldn’t you.
As the celebrity example shows, our brains can easily be fooled by
people in our large modern society when we incorrectly ascribe to them
the role of being someone we should trust.
The opposite is true as well. The parts of our brain that are hard-wired
to quickly recognize “outside enemies” can be fooled in our huge modern
society, when it is really people we know dressed up like the “other
team”.
***
Our brains assume that we can tell truth from fiction, because they
evolved in very small groups where we knew everyone extremely well, and
usually could see for ourselves what was true.
On the other side of the coin, a tribal leader who talked a good game
but constantly stole from and abused his group would immediately be
kicked out or killed. No matter how nicely he talked, the members of the
tribe would immediately see what he was doing.
But in a country of hundreds of millions of people, where the political
class is shielded from the rest of the country, people don’t really know
what our leaders are doing with most of the time. We only see them for a
couple of minutes when they are giving speeches, or appearing in photo
ops, or being interviewed. It is therefore much easier for a wolf in
sheep’s clothing to succeed than in a small group setting.
Indeed, sociopaths would have been discovered very quickly in a small
group. But in huge societies like ours, they can rise to positions of
power and influence.
As with the celebrity endorsement example, our brains are running
programs which were developed for an environment (a small group) we no
longer live in, and so lead us astray.
Like the blind spot in our rear view mirror, we have to learn to
compensate and adapt for our imperfections, or we may get clobbered.
Bloomberg
notes that this dynamic has played out
on Wall Street as well:
Until the last third of the 20th
century, he writes, companies were mostly stable and slow to change.
Lifetime employment was a reasonable expectation and people rose through
the ranks.
This stable environment meant corporate psychopaths “would be noticeable
and identifiable as undesirable managers because of their selfish
egotistical personalities and other ethical defects.”
For Wall Street - a rapidly changing and highly dynamic corporate
environment if there ever was one, especially when the firms transformed
themselves from private partnerships into public companies with
quarterly reporting requirements - the trouble started when these
charmers made their way to corner offices of important financial
institutions.
Then, according to Boddy’s “Corporate Psychopaths Theory of
The Global
Financial Crisis,” these men were “able to influence the moral climate
of the whole organization” to wield “considerable power.”
People are also
wired to believe our leaders’
big statements, even if they are ridiculous:
As Adolph Hitler wrote in
Mein Kampf:
All this was inspired by the principle -
which is quite true in itself - that in the big lie there is always
a certain force of credibility; because the broad masses of a nation
are always more easily corrupted in the deeper strata of their
emotional nature than consciously or voluntarily; and thus in the
primitive simplicity of their minds they more readily fall victims
to the big lie than the small lie, since they themselves often tell
small lies in little matters but would be ashamed to resort to
large-scale falsehoods.
It would never come into their heads to
fabricate colossal untruths, and they would not believe that others
could have the impudence to distort the truth so infamously.
Even though the facts which prove this
to be so may be brought clearly to their minds, they will still
doubt and waver and will continue to think that there may be some
other explanation. For the grossly impudent lie always leaves traces
behind it, even after it has been nailed down, a fact which is known
to all expert liars in this world and to all who conspire together
in the art of lying.
Similarly, Hitler’s propaganda minister,
Joseph Goebbels,
wrote:
The English follow the principle that
when one lies, one should lie big, and stick to it. They keep up
their lies, even at the risk of looking ridiculous.
Science has now helped to explain why the big lie is effective.
As I’ve previously
pointed out in another
context:
Psychologists and sociologists show us
that people will rationalize what their leaders are doing, even when
it makes no sense...
Sociologists from four major
research institutions investigated why so many Americans
believed that Saddam Hussein was behind 9/11, years after it
became obvious that
Iraq had nothing to do with 9/11.
The researchers
found, as described in
an article in the journal
Sociological Inquiry (and re-printed by Newsweek):
-
Many Americans felt an urgent
need to seek justification for a war already in progress
-
“We refer to this as ‘inferred
justification, because for these voters, the sheer fact that
we were engaged in war led to a post-hoc search for a
justification for that war.*
-
“People were basically making up
justifications for the fact that we were at war”
-
“They wanted to believe in the
link [between 9/11 and Iraq] because it helped them make
sense of a current reality. So voters’ ability to develop
elaborate rationalizations based on faulty information,
whether we think that is good or bad for democratic
practice, does at least demonstrate an impressive form of
creativity.
* The big lie appears to
be as effective in financial [matters] as in military warfare.
Psychiatrist Peter Zafirides, M.D sent me
an excellent article explaining why good people defend bad systems:
From the bust of the housing bubble and
mortgage meltdown to Bernie Madoff and Jerry Sandusky, to
political candidates and campaigns, it seems not a week goes by before
another story of corruption and scandal breaks.
And very predictably, the following
questions always seem to follow:
“How could they get away with this?”
- or -
“Why didn’t someone say or do anything about it?”
***
Why do we stick up for a system or institution we live in - a
government, company, or marriage - even when anyone else can see it is
failing miserably? Why do we resist change even when the system is
corrupt or unjust?
A new article in
Current Directions in
Psychological Science, reveals the conditions under which we’re
motivated to defend the status quo - a psychological process called
“system justification.”
***
People are motivated to defend the status quo [especially when there is
an external threat, people are dependent on the system, there is no
escape or people feel little control over their lives].
We Can Choose to
Reclaim Our Power
The good news is that we can grow up and evolve.
While our brains have many built-in hardwired ways of thinking and
processing information, they are also amazingly “plastic“. We can learn and
evolve and overcome our hardwiring - or at least compensate for our blind
spots.
We are not condemned to being led astray by Madison Avenue advertisers and
ruthless dictators and scientific frauds and fundamentalists.
We can choose to grow up as a species and reclaim our power to decide our
own future.
As Dr. Zafirides writes:
The research on our [default psychological
blind spots] should not be overwhelming or demoralizing.
If anything it can really help to enlighten
those who are frustrated when people don’t rise up in what would seem
their own best interests. The awareness of this psychological tendency
in all of us is the first step in trying to minimize its impact.
Awareness is critical if one hopes to meaningfully change systems.
According to Dr. Kay,
“If you want to understand how to get
social change to happen, you need to understand the conditions that
make people resist change and what makes them open to acknowledging
that change might be a necessity.”
This is true whether the change one desires
is individual or societal.
But do not despair! Whether on an individual or societal level, change
absolutely happen. Awareness and knowledge is the first part of the
process.
Never give up the fight.
Never doubt how truly powerful you are.