Honesty and the real economy

You can always tell when a college freshman has had WAY too much dope--he will start asking what he considers to be the deep mystical questions like "what is truth?"  Actually, this famous question is pretty old--it can be found in the Bible asked by one of history's sleazeballs named Pontius Pilate who was about to order the execution of an innocent man.  Asking "What is truth?" may seem profound to the freshman / doper but mostly it is just a huge warning sign that someone is about to tell a whopper and is justifying his dishonesty.

In the world of Producers, the reality is that truth can be rather easily determined.  If you claim that you have planted a field and have not, the evidence that you lied rather quickly emerges when plants fail to sprout.  If someone claims to have fixed the brakes on a school bus and has not, the result can be loud, dramatic, and very tragic.  ETC!  In the world of Producers, there is so MUCH truth that is beyond any reasonable debate, a person could spend their life collecting these truths and only gather a tiny fraction of them.

It is impossible to run the real economy well without a large percentage of the population totally dedicated to honesty in their dealings.  This means whenever there is a segment of a society whose prime operating scheme is force and fraud, their success will cause real and significant damage to the real economy.  That is why you can easily predict the success of a given society simply by measuring the general levels of either honesty or corruption.

Failing to Prosecute Wall Street Fraud Is Extending Our Economic Problems

Bill Gross, Nouriel Roubini, Laurence Kotlikoff, Steve Keen, Michel Chossudovsky and the Wall Street Journal all say that the U.S. economy is a giant Ponzi scheme.

Virtually all independent economists and financial experts say that rampant fraud was largely responsible for the financial crisis. See this and this.

But many on Wall Street and in D.C. - and many investors - believe that we should just "go with the flow". They hope that we can restart our economy and make some more money if we just let things continue the way they are.

But the assumption that a system built on fraud can continue without crashing is false.

In fact, top economists and financial experts agree that - unless fraud is prosecuted - the economy cannot recover

Fraud Leads to a Break Down in Trust and Instability in the Markets

As Alan Greenspan said recently:

Fraud creates very considerable instability in competitive markets. If you cannot trust your counterparties, it would not work. more