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.