Friday, June 19, 2009

We need to do a better job at lying

Standards for lying have declined deplorably. We need to professionalize it, and there's no better place to start than at our major universities.

Last week the Obama administration considered curbing compensation of banking executives. The New York Times reported that Scott E. Talbott, the chief lobbyist for the Financial Services Roundtable, responded to the suggestion this way: "If they [the controls on pay] are draconian, they could put the financial services industry at a distinct disadvantage in attracting and retaining top personnel. If they are just principles, they will be redundant because the industry has already moved to connect employee compensation with the long-term health of the company."

Mr. Talbott is lying. The New York Times knows Mr. Talbott is lying. All readers know Mr. Talbott is lying. Mr. Talbott knows that he is lying.

No one objects because we expect the chief lobbyist for the Financial Services Roundtable to lie. He is paid to lie. The New York Times understands that he is paid to lie. Mr. Talbott understands that that he is paid to lie.

Trouble arises when we are unaware that someone is paid to lie. We knew that mortgage brokers and investment bankers were paid to lie, but were unaware that rating agencies were also paid to lie. No one noticed that they received exorbitant fees for giving AAA ratings to worthless mortgage-backed securities.

Unfortunately, the banks that were paying the rating agencies to lie did not remember that the agencies were, in fact, lying. Thus, the banks held in their own portfolios these toxic securities with AAA ratings. This lapse caused the near implosion of our financial system.

As a result, everyone recognizes that the financial system must now be reformed. We should start by professionalizing lying. Lying must become a profession like law and medicine. Lying should be limited to trained, accredited, and licensed professionals. The American Professional Liars Association (APLA), like the American Bar Association (ABA) and the American Medical Association (AMA), would become the self-regulating governing body for all Certified Professional Liars (CPL).

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