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: 'êIf 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.'ê
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).
CPL accreditation would be required for all senior positions in paid-to-lie professions — including but not limited to accounting, advertising, trial law, expert witness, commissioned sales, appraisal, valuation, lobbying, investment banking, public relations, press spokespersons, and cable news.
The APLA would promulgate professional standards. CPL'ês would be required to:
- Never lie unless paid to lie. (Unpaid lies are the mark of an amateur.)
- When lying, adhere to the APLA'ês minimum fee schedule. (For years the Bar Association enforced a minimum fee schedule.)
- Never tell an unnecessary lie.
- Never believe another CPL.
- Never believe your own lies.
Had such standards been in place, bankers would not have believed their own lies and we would have avoided the subprime meltdown.
I suggest that a good way to get started is at our universities. By combining existing courses in law, business, statistics, and religion, all major universities could offer undergraduate and advanced degrees in lying. This will be a change for liberal arts institutions, which traditionally have trained students in the art of bullshit. Bullshit is different than lying. Lying is pointed and specific, bullshit is diffuse and panoramic.
As Harry G. Frankfurt, Professor of Philosophy Emeritus at Princeton University, explained in his book, On Bullshit: 'êThe essence of bullshit is not that it is false but it is phony. It is produced without any concern for the truth.'ê The bullshit artist 'êdoes not reject the authority of the truth, as the liar does, and oppose himself to it. He pays no attention to it at all.'ê
So let'ês cut the bullshit and start lying. But let'ês be professional about it.