French political philosopher Alexis de Tocqueville said that in a democracy, we get the government we deserve. When we choose to believe what they tell us, we shouldn’t blame them when we get snookered.
We get simple analysis, easy answers that we choose to believe will be our salvation. Despite mountains of evidence that they don’t work. Journalist H.L. Mencken is said to have summed it up this way: “There is always an easy solution to every human problem—neat, plausible and wrong.”
It’s that plausible part that concerns me. Why are we so willing to believe what is so clearly wrong? Why did a majority of Americans believe in “trickle down” economics…even as they got trickled on? Why do we believe that we can pay less in taxes and get more services? Try walking into a car dealership and asking if you can pay 1/2 price and get 2 cars.
Corporate America is not immune to this willingness to believe the unbelievable. The most clear-cut case from recent events is the Enron debacle. The documentary film, “Enron: The Smartest Guys In The Room”details how willing Wall Street, banks, accountants, lawyers, investors and employees were will to buy in to the fantastic tales spun by Ken Lay and Jeff Skilling. They all wanted to believe…even though those outlandish claims now are clearly bogus.
It might have been the world’s largest instance of collective magical thinking, but more likely it was good old-fashioned greed. All you had to do was buy into Enron, and voilá! Instant riches! You didn’t have to provide a service, produce a product, or even work that hard. A couple of keystrokes was all it took to enjoy untold profits. Well, plus a healthy dose of denial and some ethical blinders.
That’s all it took to have Fortune magazine anoint Enron as “America’s Most Innovative Company” for six consecutive years. Of course, the next year saw the company fold up like a card table, taking 22,000 employees, a respected accounting firm and thousands of investors down with it.
Sadly, Enron is just one—albeit dramatic—example of this affliction of people’s willingness to believe the unbelievable. Charles Mackay chronicled several examples in “Extraordinary Popular Delusions and the Madness of Crowds”…first published in 1841. From the Dutch Tulip Mania of 1634 to the Salem Witch Trials of 1692 right down to the dot-com bubble of the 1990’s and the subprime mortgage crisis of last year…the list of circumstances where we were willing to believe the most outrageous, crazy and implausible things marches arm in arm with human progress. We’ve put a man on the moon and harnessed the power of the atom, but we are still willing to believe that a simple device can melt the pounds away while we continue to eat whatever we want.
Though rampant, this willing suspension of disbelief doesn’t have to be. We can all do a better job of due diligence with the political, financial and even everyday choices that face us. There are no easy answers, friends. And when someone pitches one our way, we would be wise to follow the words of Ronald Reagan (something I rarely advise, by the way):