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By Julian Delasantellis
Former top gun Fidelity Investments stock picker Peter Lynch used to advise investors to "invest in what you know" as the key to picking potentially profitable equities. Thus, instead of analyzing endless investment arcana such as price/earnings ratios or momentum oscillators, he said that the amateur stock picker could do just as well by finding good products, be they laundry detergents or instant coffee, and just buy the stocks of these companies.
One of Lynch's best picks, that of Reebok far before it got hot, was not the result of diligent, MBA-level financial analysis; it came into mind when he saw all the teenagers at what he had been told were the cool local hangouts wearing Reeboks.
But what if it were the other way around? What if, instead of providing a nice snug fit, a person who put on a new pair of Reeboks had their foot lacerated by ground glass purposely sewn into the innersole, and still the stock rose? What if a hot new instant coffee seeing its stock rally every day had on its jar a warning to "consult your physician before using if overly sensitive to arsenic?"
What if the proprietor of Monty Python's famed Whizzo Chocolate Company saw his company's shares skyrocketing, even though prominent among the firm's product line were confections such as "ram's bladder cup", "garnished with lark's vomit", "cockroach cluster", "anthrax ripple", "crunchy frog", made with "only the finest baby frogs, dew picked and flown from Iraq, cleansed in finest quality spring water, lightly killed, and then sealed in a succulent Swiss quintuple smooth treble cream milk chocolate envelope and lovingly frosted with glucose ," and "Spring Surprise", the surprise in that treat being that it features, after you put in your mouth, "steel bolts spring out and plunge straight through both cheeks".
If you think that investors would never reward corporate performance such as this, you haven't seen what's been going on in the share prices of some big US banks and financial institutions lately.
A common moniker used to describe government infrastructure spending projects ready to be funded is that the projects are affirmed to be "shovel ready", but no project is more ready and eagerly awaited than to have the world's stockmarkets dig and climb out of the deep ditches they threw themselves into last September.
Much has been accomplished since most world markets bottomed out in early March; the Dow Jones Industrial Average is up by more than 3,000 points, or over 50%, but for most of August the rescuers seem to have taken a break, with the benchmark index only rising 4% up to August 28, as opposed to an over 8.5% rise in July. The rescuers probably needed a break; there's just so much more further to go.
But like all the serious denizens of Bacchus know, that there's always a party going on somewhere, so it was with stocks in August. That revelry was quite surprising, for it happened to be located at what many informed observers quite correctly assume to be American finance's most fulsome foundation of feculence, the stocks of its major financial institutions.
Yes, you would have done a lot better than the general averages in August with the BIX, the nationwide banking stock index that purposely excludes the shares of the big New York "money center" banks - it was up about 20% for the month. The banking index that dares to take a bite of the big apple, and its big stocks, the KBW, struggled by with only about a 3% rise in share value.
So was that the moneymaking secret for August, banks and financial stocks, just not very big ones? Was the market still punishing the big money-center banks for their wanton and callous profligacy in tranching, bundling and selling all those worthless mortgage-backed collateralized debt obligations? In pushing capital towards smaller, even small town, American finance, was the market finally offering up a belated mea culpa for being so disastrously wrong in following the siren songs of those glittering metropolis lotharios into worldwide catastrophe?
Not on your life. In the same way that St Augustine once pleaded to the Lord to "make me good, but not just yet", American capital, reaching again for the brass ring, is apparently out for another spin with Mr Danger.
Almost all August US stock averages, especially the ones that deal in finance, are grossly distorted by the performance of just five singular names, Citigroup, which was up almost 65% for the month to August 28, Bank of America, up 21.5%, Fannie Mae, up 251%, Freddie Mac, up 287%.
In much the same way that the Yiddish word chutzpah is defined as a man who kills his parents and then begs the court for leniency because he is an orphan, investors in the stock of American International Group, the company whose over-enthusiastic embrace of credit default swaps torpedoed the economy of the entire planet when the company failed, actually had the chutzpah to enjoy its now ward-of-the-state's 282% rise in August. (For an account of credit default swaps see Jaws close in on Bernanke, Asia Times Online, July 16, 2008.)
For the sake of comparison, Goldman Sachs, a bank now making so much money that no one really knows or understands how, had to settle for a paltry, puny August rise in its stock of under 1%.
Not only are these five delinquents August's best show in town, it's almost that they were the only show in town. According to Matt Phillips in the Wall Street Journal, for most of the month, trading in just these five stocks alone has represented just under a third of the total volume on the New York Stock Exchange. Last Monday, August 24, it was over 43% of total; NYSE volume being accounted for by just these stocks.
Phillips has rounded up a now usual suspect for the extraordinary price and volume moves - the "high frequency" flash trading I discussed last month in relation to Goldman Sachs. (See Goldman Sachs - the lords of time, Asia Times Online, August 5, 2009.)
I have my doubts as to whether these rallies result from flash/high-frequency trading; for one thing, most of the exchanges banned flash trading following its existence becoming public knowledge. I'm not sure that Goldman, or anyone for that matter, would want to be rubbing the regulators' noses in the dirt so soon after essentially promising to be forever more on their best behavior.
Also, high-frequency trading does not usually influence the trend, or direction, of stock prices in the manner that something is doing with these shares - unless Goldman Sachs is pulling a new rabbit through a very new hat, high-frequency trading seems to be a stretch here.
Finally, if it is high-frequency/flash trading, it's not rewarding, as judged by the becalmed stock price of the acknowledged sensei in the practice, Goldman Sachs. There's not much fun in being a master of the universe like Goldman if little peons can blow your ears off while leaving you behind the dust.
On CNBC, Charles Gasparino suggests that this is all just small-time shorts finally throwing in the towel with purchases to close out their positions; if enough do that in a short period of time, it can have dramatic effects on a company's stock price. Still, since most of these stocks had already bottomed in the spring, the Gasparino hypothesis seems to imply that the shorts had held onto these positions long after they had reached their maximum profitability and were content to sit there and lose money with them from March until August.
So what was it that lit the fires under, in an American universe of about 6,000 traded stocks, these particular five stocks? What lit the new guns of August?
In the files that police agencies keep on criminals are detailed listings of who or what are the other criminals or gangs the socially undesirables hang out with; an analysis of the associations of the five here goes a long way to crack the case.
Fannie Mae, Freddie Mac, American International Group, Citigroup and Bank of America - these were all Paulson's Plunderers, the trigger men for the caper that brought the world economy down to its knees starting in the summer of 2008, when Henry Paulson was still Treasury secretary.
After Bear Stearns fell in March last year, there were a few brief months of peace that allowed laissez faire sycophants the opportunity to bleat on that the entire financial crisis was a lion with more roar than bite. Now we know that the actual economy had by then already entered the worst economic pullback since the Great Depression, even as promises were made that the skies were to be forever bright as long as the upper incomes were further fattened with tax cuts from out of re-elected conservative administrations.
Then, in July, Fannie Mae and Freddie Mac began to stumble under the crushing weight of the collapsing US housing market. At first, Paulson's US Treasury thought that all these two government-sponsored enterprises needed was just making the implicit guarantees of the pair a little bit more explicit, but this tourniquet did very little to staunch the bleeding. On September 7, it was announced that the two were being placed under "receivership", defined in this circumstance as what professed free-market conservatives call nationalizing a company when their ideology prevents them from admitting that they're nationalizing it.
Lehman fell early on the following Monday, AIG the following day. By October, the barbarians were well past the gate and were assaulting the throne, causing an electronic "run" at Citigroup, then the world's largest private financial institution. Citigroup necessitated a few successive US government rescue packages before the stock stabilized early this year. Bank of America, this August's stock-price laggard among the fabulous five, never seems to have been in much of the imminent danger of collapse that the other four went through, but it still walked away with US$45 billion of US government financial system support/TARP money.
Adding that to the estimated $400 billion both the US government and Federal Reserve spent to refloat the GSEs, the $150 billion bailout of AIG, Citigroup's pocketing of $45 billion in TARP as well as its receipt of a government guarantee of up to $272 billion of its potentially diciest mortgage derivative debt, and you come to the conclusion that, in under one year, the US government has either pledged or proffered about $900 billion just to these five companies alone - roughly the low end of the range for the 10-year total cost of President Barack Obama's health plan.
All these emergency system rescues and developments were the bastardized orphans of the braying hounds of crisis; nobody, least of all former Goldman Sachs Golden God Paulson, would have in calmer times adopted a plan to react to a financial crisis in these peripatetic fashions. Indeed, just prior to the Lehman catastrophe, there was speculation that Paulson was going to turn away the next supplicant pleading for more government porridge, and, in doing so, reaffirm to the markets that, indeed, no one was too big to fail.
Late last August, three weeks before the failure of Lehman and AIG, I expounded on some of this thinking in that last, glorious summer of faux prosperity. (See, Tough love's fatal attraction, Asia Times Online, August 27, 2008).
The question then becomes, have all these factors, particularly the diverse, sometimes inchoate opposition to the manner in which the government financial elite has recruited from the private sector is reaching back to save their buddies (and their future jobs) in the private sector sufficient to stop any further rescues of the financial sector? Is the next supplicant, maybe Lehman Brothers, maybe once again Fannie and Freddie, to knock on the door of Paulson, [Federal Reserve chairman Ben] Bernanke and [Securities and Exchange Commission chairman Christopher] Cox saying that they're too big to fail going to be told that, in actuality, they're not?
It's not hard to imagine the consequences of such a denial. However soothing such a stand on free-market principle would undoubtedly sound to those seduced down the Pied Piper's road by ideology, for the rest of us the results would be catastrophic.
Then Lehman and AIG fell, then the deluge - it was catastrophic. In the three weeks following, the Dow Jones Industrial Average lost 3,700 points, about a third of its value.
Paulson's sentiments changed very quickly, as I described they would in that August 27 article. As in John Lennon's 1969 song of the misery of drug withdrawal, Cold Turkey, Paulson desperately wanted to once again start feeding the financial system's addiction to the government needle - "Oh, I'll be a good boy, please, make me well. I promise you anything, get me out of this hell."
How Paulson, followed by Obama Treasury Secretary Timothy Geithner, got out of his hell was to affirm, in statement and in very expensive deed, that most major American financial institutions were, indeed, too big too fail. The establishment of what blogger Barry Ritholtz calls "Bailout Nation" has sent the US federal budget deficit and debt numbers spinning to record highs like Las Vegas slot machines, and provided the seed for the gaseous inchoate populism of the teabag movement currently savaging Democratic solons at their town halls - but, as of yet, it has kept the US and much of the rest of the world's financial system intact, something that was thought to be not at all that certain back on Lehman weekend last year.
And a year later, on the stock market, the first are last and the last first. Why?
For the answer to that, you can look to your own behavior. What prevents you from doing really, really stupid things? If your $5,000 mortgage payment is due, what prevents you from using that money to instead cover the two hectares of the town's football pitch with 50 centimeters of cotton candy? What prevents you, should you see your surgeon in the cafeteria prior to your scheduled surgery, from slipping him some Scotch in his coffee when he's not looking? If you're on an airplane that you see is passing over your neighborhood, what stops you from opening the door, jumping out, and thus bypassing the terrible luggage carrel lines?
The answer is that there would be substantial negative costs, in terms of your health and wealth, to all that behavior. You would lose your home with the candy stunt, an internal organ or worse with your surgeon's mickey, probably your life leaving the airplane.
But what if this was not true, what if you were protected from the consequences of your worst decisions? You blow $5,000, but someone is there to give you another big check; you've got another surgeon to operate on you, or a parachute to put on as you leave the plane.
In other words, if you were continually bailed out of your worst, most risky decisions, wouldn't you do a lot more of them?
What is "too big to fail" but a government promise to bail out the banks come what may? As investors come to realize the influence and motivations of this now huge new market-influencing player, relationships and previously established market practices are changing, and that's what we are seeing in the outsized performances of Paulson's plunderers this month.
If "too big to fail" is no longer seen as a policy result to be avoided, but as a free ticket for a bank or other financial institution to receive nearly lifetime government protection, then it's not all that surprising that banks that now see themselves as too skinny to receive the government protection are trying to fatten up a bit.
Just in 2008, Wells Fargo's combined assets grew by 43% after swallowing up Wachovia; JP Morgan Chase's increased by 53%, after it assumed control of Bear Stearns and Washington Mutual. The Washington Post recently reported an unintended consequence of the rush from the huge to the gargantuan; the bigger banks, operating under the presumed guarantee of the government, are borrowing cheaper than smaller banks in the money markets - lenders apparently, with very good reason, feel that their loans to institutions that the government will be forced to stand behind are a safer bet than loans to smaller banks and financial institutions that the government might let fail.
As a result, local competition for customers among banks in America's small towns and communities is becoming a thing of the past; America's vaunted small-bank centered financial system, significant in the dynamism of the country's small-business-based economy, may soon, in a manner reminiscent of local retailers being put out of business and replaced by such national competitors as Wal-Mart and Target, be signified by, from sea to shining sea, just having a Chase or JP Morgan on one corner, and a Bank of America or Wells Fargo on the opposite.
If both the banks and their investors feel that the negative consequences of excessive risk, loan default and insolvency, are being handled by the government, it can't be all that surprising that both the banks and their investors are hungry to whet their palette with more of it. Some reports have it that the big banks are wading back into the market for highly leveraged mortgage-backed securities, the same type of instrument that sunk them the first time.
But at that time they didn't have the implied government guarantee. That frees the banks to make relatively risk-free decisions to take on more risk, and it frees the bank investors to engage in the mad bidding for big bank shares we are now seeing.
Mind you, this is in no way a prediction for endlessly sunny skies in the financial sector as a whole; on the other side of the banks being protected by the government camp's barbed-wire fence things are pretty lousy. Twenty percent of US banks lost money in the first quarter, and these days not a Friday goes by without the Federal Deposit Insurance Corporation's commissioner, Sheila Barr's bank closure team being dispatched into the heartland to put more financial institutions out of their misery - last week three banks, in California, Maryland and Minnesota, met their fate as their doors closed for the last time.
Already, 84 US banks have been seized by the FDIC this year, and its list of "problem banks" has swollen to 416. Since it is highly doubtful to more likely absolutely impossible that Obama will be sending out Geithner's cavalry to save this bunch, as one wag put it recently in the Huffington Post, perhaps the best operating investment philosophy for these curious times might be to "sell the FDIC [small banks] and buy the TARP" (big banks).
It's not as if the Obama administration does not see the inherent dangers of allowing the big financial institutions to plunder the countryside with too big to fail, but, during the current moment, Obama can ill-afford the poll-busting consequences of another Lehman shock, just as George W Bush and Paulson couldn't.
The Obama financial reform plan, released in June, did not call on the big banks to be broken or split up into more of a regulation-friendly size (the now trademark Obama/Geithner caution in dealing with the financial system was once again on obvious display there), but it did call for extra auditing, extra "stress tests" for the biggies, presumably to steer them in the right direction before they sail right off over another precipice.
Still, the entire financial reform effort has degenerated into one big semi-public sniping match between Geithner and Barr; besides, one wonders just how many more fights Obama will have the stomach for once he emerges bloodied, battered and bruised - whether he wins or loses - with healthcare.
All these things are undoubtedly seen by the players bidding up the big banks' stocks. Why not? This is probably as close to a sure thing as you're ever going to get in investing. Heads, the extra risk pays off, tails it doesn't, but you still get bailed out by the government.
As for Peter Lynch's dictum to "invest in what you know", well I know that this system, one that rewards the corpulent incompetents of the banking system over those who display innovation and entrepreneurialism, is just about the most dysfunctional thing I've ever seen; it's a virtual plea for foreign scavengers to come in and buy up the system's assets on the cheap.
Perhaps a future economics teacher, after lecturing on the previous historical epochs of agricultural capitalism, feudal capitalism, industrial capitalism and finance capitalism, will look down into his textbook to see the chapter heading that covers our current era - "moron capitalism".
Julian Delasantellis is a management consultant, private investor and educator in international business in the US state of Washington. He can be reached at juliandelasantellis@yahoo.com.
“Blessed is the nation that doesn’t need heroes" Goethe. “Hero-worship is strongest where there is least regard for human freedom.” Herbert Spencer
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Friday 4 September 2009
Om's best cricket season so far as a bowler
Bowling Statistics - Granta Under 11a/ 2009 summer
| Name | Overs | Maidens | Runs | Wkts | Best Bowling | 5WH | Econ | S-R | Ave | Bowled (%) | Caught (%) | LBW (%) | Stumped (%) | %Team Wkts |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Om Menon | 23 | 3 | 81 | 16 | 4/3 | 0 | 3.52 | 8.63 | 5.06 | 6 (37.5) | 5 (31.25) | 1 (6.25) | 4 (25) | 31.37 |
| Mihir Chandraker | 23 | 4 | 72 | 7 | 3/13 | 0 | 3.13 | 19.71 | 10.29 | 4 (57.14) | 0 | 0 | 3 (42.86) | 20.59 |
| Jonah Omitowoju | 11 | 1 | 44 | 4 | 2/6 | 0 | 4 | 16.5 | 11 | 2 (50) | 2 (50) | 0 | 0 | 18.18 |
| Thomas Cox | 24 | 7 | 51 | 4 | 2/10 | 0 | 2.13 | 36 | 12.75 | 2 (50) | 1 (25) | 1 (25) | 0 | 7.84 |
| Ben Taylor | 13 | 3 | 37 | 4 | 2/10 | 0 | 2.85 | 19.5 | 9.25 | 2 (50) | 2 (50) | 0 | 0 | 7.84 |
| Hugh Barker | 3 | 0 | 14 | 3 | 2/13 | 0 | 4.67 | 6 | 4.67 | 3 (100) | 0 | 0 | 0 | 17.65 |
| Michael Cowdrey | 5 | 0 | 16 | 2 | 2/12 | 0 | 3.2 | 15 | 8 | 0 | 1 (50) | 0 | 1 (50) | 11.11 |
| Blaise Mann | 25 | 4 | 95 | 2 | 1/3 | 0 | 3.8 | 75 | 47.5 | 2 (100) | 0 | 0 | 0 | 3.77 |
| Charlie Lewis | 7 | 1 | 13 | 2 | 2/3 | 0 | 1.86 | 21 | 6.5 | 1 (50) | 1 (50) | 0 | 0 | 8 |
| Robert Marmion | 9.5 | 0 | 44 | 2 | 1/2 | 0 | 4.49 | 29.4 | 22 | 1 (50) | 0 | 1 (50) | 0 | 16.67 |
| Lewis Evans | 10 | 0 | 34 | 1 | 1/11 | 0 | 3.4 | 60 | 34 | 0 | 1 (100) | 0 | 0 | 2.78 |
| Blaise Mann | 2 | 1 | 2 | 1 | 1/2 | 0 | 1 | 12 | 2 | 1 (100) | 0 | 0 | 0 | 12.5 |
| Robbie Sewell | 2 | 0 | 13 | 0 | 0/13 | 0 | 6.5 | 0 () | 0 () | 0 () | 0 () | 0 | ||
| Edward Hyde | 2 | 0 | 7 | 0 | 0/7 | 0 | 3.5 | 0 () | 0 () | 0 () | 0 () | 0 | ||
| Theo Pow | 9 | 5 | 16 | 0 | 0/0 | 0 | 1.78 | 0 () | 0 () | 0 () | 0 () | 0 |
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Bowling Statistics 2009 for entire Granta
Name Overs Maidens Runs Wkts Best Bowling 5WH Econ S-R Ave Bowled (%) Caught (%) LBW (%) Stumped (%) %Team Wkts
Om Menon 23 3 81 16 4/3 0 3.52 8.63 5.06 6 (37.5) 5 (31.25) 1 (6.25) 4 (25) 31.37
Matthew Cooksey 31.3 5 103 16 6/17 2 3.27 11.81 6.44 3 (18.75) 10 (62.5) 2 (12.5) 1 (6.25) 48.48
Sam Inglis 99.4 23 243 28 4/15 0 2.44 21.36 8.68 13 (46.43) 12 (42.86) 1 (3.57) 0 23.93
James Brooklyn 133.1 55 422 41 7/15 3 3.17 19.48 10.29 21 (51.22) 15 (36.59) 2 (4.88) 2 (4.88) 29.71
Hussain Biplob 35 2 105 10 3/22 0 3 21 10.5 5 (50) 5 (50) 0 0 24.39
Duncan Howells 112 27 369 28 5/14 1 3.29 24 13.18 7 (25) 18 (64.29) 3 (10.71) 0 22.76
John Naylor 46.5 5 136 10 3/14 0 2.91 28.08 13.6 5 (50) 2 (20) 2 (20) 0 17.24
Neil Mckeown 51 9 222 15 5/41 1 4.35 20.4 14.8 8 (53.33) 5 (33.33) 2 (13.33) 0 26.32
Mark Coteman 58.4 4 223 15 3/32 0 3.8 23.48 14.87 6 (40) 4 (26.67) 3 (20) 0 15.96
Matthew Winter 67.5 13 205 13 3/25 0 3.02 31.29 15.77 5 (38.46) 7 (53.85) 1 (7.69) 0 15.66
Joe Heather 75.2 17 259 16 5/55 1 3.44 28.24 16.19 6 (37.5) 6 (37.5) 4 (25) 0 30.77
Lewys Hill 248.5 41 747 46 5/40 1 3 32.45 16.24 12 (26.09) 21 (45.65) 9 (19.57) 4 (8.7) 24.08
Jack Upton 50.4 8 195 12 4/33 0 3.85 25.35 16.25 3 (25) 8 (66.67) 1 (8.33) 0 15.79
Jamie Jones 53.2 14 163 10 5/27 1 3.06 31.98 16.3 6 (60) 4 (40) 0 0 15.15
Tom Elmslie 72.2 4 349 21 5/23 1 4.82 20.69 16.62 5 (23.81) 5 (23.81) 1 (4.76) 3 (14.29) 22.58
Paul Scott 66 7 204 12 3/29 0 3.09 33 17 8 (66.67) 3 (25) 0 1 (8.33) 16.9
Joseph White 118.3 25 364 20 4/35 0 3.07 35.55 18.2 7 (35) 9 (45) 3 (15) 1 (5) 17.24
Thomas Faulkener 54 8 225 12 3/25 0 4.17 27 18.75 3 (25) 7 (58.33) 1 (8.33) 1 (8.33) 17.65
Sean Park 117.2 14 444 22 5/19 2 3.79 31.99 20.18 0 16 (72.73) 5 (22.73) 1 (4.55) 18.49
Jason Coleman 277.4 54 853 42 5/17 1 3.07 39.67 20.31 10 (23.81) 20 (47.62) 12 (28.57) 0 19.35
Jonathan carpenter 113 26 355 16 4/49 0 3.14 42.38 22.19 7 (43.75) 8 (50) 1 (6.25) 0 13.22
Mark Nunn 83.2 10 282 12 4/19 0 3.39 41.65 23.5 6 (50) 6 (50) 0 0 13.19
Alex Fullarton 79.1 6 329 14 4/17 0 4.15 33.94 23.5 0 11 (78.57) 1 (7.14) 2 (14.29) 14.29
Freddie Clamp 79.3 8 307 13 5/61 1 3.86 36.69 23.62 4 (30.77) 5 (38.46) 3 (23.08) 1 (7.69) 26.53
Rajan Singh 149.3 24 636 26 4/32 0 4.25 34.5 24.46 16 (61.54) 10 (38.46) 0 0 15.2
Craig Park 166 26 566 23 3/22 0 3.41 43.3 24.61 6 (26.09) 11 (47.83) 6 (26.09) 0 11.5
Matthew Friedlander 83 13 326 13 4/43 0 3.93 38.31 25.08 3 (23.08) 10 (76.92) 0 0 14.29
Jonathan Atkinson 66 2 345 13 4/46 0 5.23 30.46 26.54 1 (7.69) 9 (69.23) 0 3 (23.08) 14.13
Tim O'Connell 111.5 19 425 15 4/25 0 3.8 44.72 28.33 1 (6.67) 11 (73.33) 2 (13.33) 1 (6.67) 13.51
John Kay 80 7 410 11 4/73 0 5.13 43.64 37.27 5 (45.45) 3 (27.27) 2 (18.18) 1 (9.09) 13.58
Thursday 3 September 2009
Prada to Pravda
Prada to Pravda
By Chan Akya
"Do we have to suffer through this transparently manipulative pseudo-reality again?" - Dr Sheldon Cooper, Big Bang Theory, Series 2. [1]
Yes Dr Cooper, apparently we do.
As we approach the 20th anniversary of the fall of the Berlin Wall, the decline of the Soviet Union is being mirrored by a parallel decline of the United States. What passes as reality on the pages and screens of the financial media today is so far removed from ground realities as to suggest a renewed version of the Pravda economy that the Soviet Union tried to build and failed. A "then and now" comparison isn't just stark but also quite scary for anyone with common sense (that excludes today's stock market investors right away).
Then (or, a long time ago in the Soviet Union):
The Soviet Union controlled a vast array of vassal states using far-flung military bases that were all steadily declining.
The army was mired in Afghanistan, 10 years after the beginning of a "just" liberation that proved anything but.
The government owned car companies that made sub-standard products no one really wanted.
There were long queues for bread and vodka across the nation.
A deep recession was in place, caused by the decline in demand from poorer countries and falling oil prices.
The actions of president Mikhail Gorbachev, a political reformer, were characteristic of those of a person who wanted change to ensure his place in history.
The fall of the Berlin Wall fatally weakened Soviet authority across the satellites.
Poor distribution led to massive food waste.
The rouble became worthless after the pseudo-reality holding it up (namely parity with the US dollar) was exposed as a cruel hoax.
Now (or, as things stand in the new Soviet Union):
America's allies are in dangerous decline - be it Turkey, Egypt or worst of all, Pakistan.
The military is mired in Afghanistan - almost eight years of incessant activity haven't yielded the simple result of finding Osama Bin Laden or Taliban leader Mullah Omar. (For good measure, America is also mired in another Islamic country, Iraq ... just in case the challenge of getting one's behind spanked in one country wasn't enough).
The American government is the proud owner of General Motors, a car company that apparently doesn't know how to make cars and, even less, profitable cars; Citibank, a bank that apparently doesn't know how to make loans and, even less, profitable loans; Fannie Mae ... okay, you get the picture.
The US economy is in recession, and will permanently remain in this state.
There are long queues for dole payments, food stamps and the like. Prescription drugs, mainly antidepressants, are the new normal for the country.
President Barack Obama is increasingly being seen as a politician who would do pretty much anything - ranging from limitless economic intervention to throwing Israel to the Arab wolves - to ensure his place in history.
Mainly thanks to the continued American fascination with burgers and other fast food - that deliver calories without the nutrients - the level of food waste in the US today exceeds the total food production of many European countries.
The US dollar is, well, worth less (that's two words - for now at least) with respect to its purchasing power; and is being held up by the pseudo-reality of a consumer economy.
Creating the pseudo-reality: Ignore the important and the obvious
Ignoring abject reality is the key process of governance. In the Soviet Union, this was achieved through the simple medium of a complete news blackout for citizens, other than state-sponsored propaganda through various channels. In the case of the US, much the same has been achieved, but by using the opposite tactic of selective reinterpretation of news that helps cast it in much better light.
For example, consider what is going on in Afghanistan. The Soviet Union denied to its citizens that the occupation was going badly, and indeed did not publish any figures for personnel losses. Right up to the day that Soviet troops pulled out of the country, bled dry by the insurgents who had been sponsored by the Americans, citizens of the USSR did not even know how bad the situation was.
When the then-Afghan president Mohammad Najibullah was stripped and hanged in public by the Taliban in 1996, the news media finally should have taken cognizance of the monster that had been unleashed in the form of militants whose answer to a "higher calling" was to do some pretty awful things in their temporal existence. Instead, the American and European media extolled the "freedom fighters" while quietly praying that the chaps would turn in their unused Stinger missiles. Well, we all know how that went.
Fast forward to now, and the steady erosion of North Atlantic Treaty Organization (NATO) authority across Afghanistan isn't fully understood by viewers of American television, nor perhaps by the average newspaper reader. To wit, the rapid increase in the deaths of British soldiers that could well spiral into their complete withdrawal from the country at the drop of a terrorist hat (the British will only be following the course of the Spanish, who left Iraq in response to the terrorist bombing of trains in Madrid in 2004), a course of action that will soon be adopted by all other components of NATO in Afghanistan.
Where that will leave the US, I do not know. However, the trend is quite clear and Obama's addition of a few thousand troops will prove about as significant as throwing a water balloon at a California wildfire.
Now, most readers of this publication will already be familiar with all of this. The point to note is that the Afghan situation hasn't been seriously discussed on US networks because of fear of where the conversation will lead. The point isn't so much whether the country is Obama's Vietnam (technically speaking, it will have to be characterized as that of president George W Bush), but what the actual end game is that's being played out here.
Does the US think that staying in the country for the next 20 years is feasible? Would Americans expect a reduction or an increase in the production of opium? Is there an ethnic allocation plan in place (think Iraq, but with real bloodthirst and guns) - because the notion of a single country is quite laughable? How are the terrorists and the Taliban to be dealt with - through education and modernization as per the NATO dream or through continued bombings as per the current plan?
Most of all, what is the actual definition of success in Afghanistan for NATO and the US?
For the Soviet Union, there were no real answers to the questions I pose above. It actually wouldn't really have known even if victory had passed it on the high road to Kabul a couple of times, mainly because there was no actual definition of victory. It was basically occupation for its own sake.
You might ask why any of this is relevant to the broader issues raised at the beginning of the article. From my viewpoint, Afghanistan is an important issue because understanding the end game may well offer a vignette of the thinking on all other radical measures being planned and executed by the US government - ranging from the Keynesian economy of zombie companies and individuals to the next steps on medical services reform.
Drugs and reality
In the Soviet Union, there was an appropriate saying, "The government pretends to pay the workers, and workers pretend to work." The downside of that trade-off was that Russians (and other nationalities contained within the Soviet Union) did not believe in the possibility of any improvements in their life quality and behaved with the nihilism appropriate to that observation.
This seemingly harsh statement has within it the notion of truth wrought by the idea of what separated a successful Russia from an unsuccessful one in that era: getting ahead in the ration queue, or getting to drive the plush version of the Lada. Gee, what an improvement over being a few places behind in the same queue for stale bread and spoilt meat; or driving a smaller Lada.
No surprise then that Russians took to vodka. As a society, Russians looked at the queues as unfairness of the system towards them as individuals (because some people were able to leapfrog the system), rather than recognize that they were victims of an unsustainable economic system.
Being unable to distinguish between secular and cyclical decline is the actual problem for developed nations today - Americans and Europeans think of equity market declines and the house-price falls of 2006-08 as the key issue, rather than as a necessary correction after years of excess. So now traditions and social mores are sacrificed at the altar of recovering wealth lost over the past two years.
How intelligent people reconcile the obvious areas of cognitive dissonance - many people you know are not only bankrupt but also unemployed and unlikely to rebound any time soon, yet you are asked to believe that the "economy is growing again" - is a matter not so much of anthropological interest but one that determines the course of global developments.
It's interesting to me then that pretty much no one appears bothered that the rising scourge of prescription drugs, particularly antidepressants, could well prove to be the key problem for these societies down the road; if anything, some in the media appear to believe that drugs are helping to "contain" social problems. Much like alcoholism cured Russian violence, I'm sure.
History may choose not to repeat itself. But if it does, watch for results that aren't vastly dissimilar to the declines that we saw in the case of the Soviet Union. In the interim, the number of people who do not want to hear the truth will likely rise, as denial becomes one of the cornerstones of happiness.
Eat a burger, drink some beer and pop some pills, dude. Then switch on the telly and have the cable news ladies tell you how good things are going to be.
Have more than one Hotmail account? Link them together to easily access both.
By Chan Akya
"Do we have to suffer through this transparently manipulative pseudo-reality again?" - Dr Sheldon Cooper, Big Bang Theory, Series 2. [1]
Yes Dr Cooper, apparently we do.
As we approach the 20th anniversary of the fall of the Berlin Wall, the decline of the Soviet Union is being mirrored by a parallel decline of the United States. What passes as reality on the pages and screens of the financial media today is so far removed from ground realities as to suggest a renewed version of the Pravda economy that the Soviet Union tried to build and failed. A "then and now" comparison isn't just stark but also quite scary for anyone with common sense (that excludes today's stock market investors right away).
Then (or, a long time ago in the Soviet Union):
Now (or, as things stand in the new Soviet Union):
Creating the pseudo-reality: Ignore the important and the obvious
Ignoring abject reality is the key process of governance. In the Soviet Union, this was achieved through the simple medium of a complete news blackout for citizens, other than state-sponsored propaganda through various channels. In the case of the US, much the same has been achieved, but by using the opposite tactic of selective reinterpretation of news that helps cast it in much better light.
For example, consider what is going on in Afghanistan. The Soviet Union denied to its citizens that the occupation was going badly, and indeed did not publish any figures for personnel losses. Right up to the day that Soviet troops pulled out of the country, bled dry by the insurgents who had been sponsored by the Americans, citizens of the USSR did not even know how bad the situation was.
When the then-Afghan president Mohammad Najibullah was stripped and hanged in public by the Taliban in 1996, the news media finally should have taken cognizance of the monster that had been unleashed in the form of militants whose answer to a "higher calling" was to do some pretty awful things in their temporal existence. Instead, the American and European media extolled the "freedom fighters" while quietly praying that the chaps would turn in their unused Stinger missiles. Well, we all know how that went.
Fast forward to now, and the steady erosion of North Atlantic Treaty Organization (NATO) authority across Afghanistan isn't fully understood by viewers of American television, nor perhaps by the average newspaper reader. To wit, the rapid increase in the deaths of British soldiers that could well spiral into their complete withdrawal from the country at the drop of a terrorist hat (the British will only be following the course of the Spanish, who left Iraq in response to the terrorist bombing of trains in Madrid in 2004), a course of action that will soon be adopted by all other components of NATO in Afghanistan.
Where that will leave the US, I do not know. However, the trend is quite clear and Obama's addition of a few thousand troops will prove about as significant as throwing a water balloon at a California wildfire.
Now, most readers of this publication will already be familiar with all of this. The point to note is that the Afghan situation hasn't been seriously discussed on US networks because of fear of where the conversation will lead. The point isn't so much whether the country is Obama's Vietnam (technically speaking, it will have to be characterized as that of president George W Bush), but what the actual end game is that's being played out here.
Does the US think that staying in the country for the next 20 years is feasible? Would Americans expect a reduction or an increase in the production of opium? Is there an ethnic allocation plan in place (think Iraq, but with real bloodthirst and guns) - because the notion of a single country is quite laughable? How are the terrorists and the Taliban to be dealt with - through education and modernization as per the NATO dream or through continued bombings as per the current plan?
Most of all, what is the actual definition of success in Afghanistan for NATO and the US?
For the Soviet Union, there were no real answers to the questions I pose above. It actually wouldn't really have known even if victory had passed it on the high road to Kabul a couple of times, mainly because there was no actual definition of victory. It was basically occupation for its own sake.
You might ask why any of this is relevant to the broader issues raised at the beginning of the article. From my viewpoint, Afghanistan is an important issue because understanding the end game may well offer a vignette of the thinking on all other radical measures being planned and executed by the US government - ranging from the Keynesian economy of zombie companies and individuals to the next steps on medical services reform.
Drugs and reality
In the Soviet Union, there was an appropriate saying, "The government pretends to pay the workers, and workers pretend to work." The downside of that trade-off was that Russians (and other nationalities contained within the Soviet Union) did not believe in the possibility of any improvements in their life quality and behaved with the nihilism appropriate to that observation.
This seemingly harsh statement has within it the notion of truth wrought by the idea of what separated a successful Russia from an unsuccessful one in that era: getting ahead in the ration queue, or getting to drive the plush version of the Lada. Gee, what an improvement over being a few places behind in the same queue for stale bread and spoilt meat; or driving a smaller Lada.
No surprise then that Russians took to vodka. As a society, Russians looked at the queues as unfairness of the system towards them as individuals (because some people were able to leapfrog the system), rather than recognize that they were victims of an unsustainable economic system.
Being unable to distinguish between secular and cyclical decline is the actual problem for developed nations today - Americans and Europeans think of equity market declines and the house-price falls of 2006-08 as the key issue, rather than as a necessary correction after years of excess. So now traditions and social mores are sacrificed at the altar of recovering wealth lost over the past two years.
How intelligent people reconcile the obvious areas of cognitive dissonance - many people you know are not only bankrupt but also unemployed and unlikely to rebound any time soon, yet you are asked to believe that the "economy is growing again" - is a matter not so much of anthropological interest but one that determines the course of global developments.
It's interesting to me then that pretty much no one appears bothered that the rising scourge of prescription drugs, particularly antidepressants, could well prove to be the key problem for these societies down the road; if anything, some in the media appear to believe that drugs are helping to "contain" social problems. Much like alcoholism cured Russian violence, I'm sure.
History may choose not to repeat itself. But if it does, watch for results that aren't vastly dissimilar to the declines that we saw in the case of the Soviet Union. In the interim, the number of people who do not want to hear the truth will likely rise, as denial becomes one of the cornerstones of happiness.
Eat a burger, drink some beer and pop some pills, dude. Then switch on the telly and have the cable news ladies tell you how good things are going to be.
Have more than one Hotmail account? Link them together to easily access both.
Tuesday 1 September 2009
Jihadis luring Kerala college girls for love
Ananthakrishnan G, TNN 1 September 2009, 08:05am IST
THIRUVANANTHAPURAM: Kerala police has constituted a special team to probe charges that jihadis are running an organized racket in the state's colleges to lure gullible girls in the name of love and then convert them for subsequent use in anti-national activities.
"We are investigating if there is any such design,'' DGP Jacob Punnoose told TOI. What jolted the sleuths into action was a habeus corpus petition in the Kerala high court from the parents of two MBA students. The students were staying in the same hostel at St John's College in Pathanamthitta district when they met a senior and grew fond of him.
But the boy proved to be a nuisance to the authorities and was expelled from the college some years ago. "He still managed to retain contact with four junior students, including the two MBA students and feigned love for them. The boy wanted them to get converted to Islam. But one of them suspected his intentions and withdrew while another developed psychiatric problems. The other two fell for him and eloped,'' college principal Sreekumaran Nair said.
When there was no news of their wards, the parents approached the high court with habeus corpus petitions. The girls were subsequently produced in court which allowed the parents the custody of their children for a week. When they appeared in court next, the girls stated they had been trapped and did not want to go back with the boy. In the period they were with him, one of them had already married the boy and the other was "forced to marry'' his friend, a bus conductor. In their statements given to police, the students claimed that they were shown jihadi videos and literature by the boy. Expressing concern over the development, the high court asked the police to probe deeper.
"When we searched the hostel, we found provocative literature given by the boy from the rooms of the two girls,'' the principal said. This was seized by the police who have now extended the probe to other campuses as well they feel this was not an isolated incident. Similar reports have been emerging for quite some time now but were mostly ignored for political reasons, police sources added.
THIRUVANANTHAPURAM: Kerala police has constituted a special team to probe charges that jihadis are running an organized racket in the state's colleges to lure gullible girls in the name of love and then convert them for subsequent use in anti-national activities.
"We are investigating if there is any such design,'' DGP Jacob Punnoose told TOI. What jolted the sleuths into action was a habeus corpus petition in the Kerala high court from the parents of two MBA students. The students were staying in the same hostel at St John's College in Pathanamthitta district when they met a senior and grew fond of him.
But the boy proved to be a nuisance to the authorities and was expelled from the college some years ago. "He still managed to retain contact with four junior students, including the two MBA students and feigned love for them. The boy wanted them to get converted to Islam. But one of them suspected his intentions and withdrew while another developed psychiatric problems. The other two fell for him and eloped,'' college principal Sreekumaran Nair said.
When there was no news of their wards, the parents approached the high court with habeus corpus petitions. The girls were subsequently produced in court which allowed the parents the custody of their children for a week. When they appeared in court next, the girls stated they had been trapped and did not want to go back with the boy. In the period they were with him, one of them had already married the boy and the other was "forced to marry'' his friend, a bus conductor. In their statements given to police, the students claimed that they were shown jihadi videos and literature by the boy. Expressing concern over the development, the high court asked the police to probe deeper.
"When we searched the hostel, we found provocative literature given by the boy from the rooms of the two girls,'' the principal said. This was seized by the police who have now extended the probe to other campuses as well they feel this was not an isolated incident. Similar reports have been emerging for quite some time now but were mostly ignored for political reasons, police sources added.
Saturday 8 August 2009
England fail intelligence test
Angus Fraser:
Fast bowlers have the somewhat unfair reputation of being big, thick, dopey so and sos, incapable of thinking for themselves.
The stigma is historical, arising from the fact that previous generations of batsmen tended to be privately educated chaps that had picked up a degree at some flash university. The roots of a fast bowler tend to be far more working-class, as England's northern-based bowling attack highlights.
Australia's fast bowlers made a mockery of the generalisation yesterday morning as they intelligently adapted their game to capitalise on helpful bowling conditions to dismantle England's batting line-up for a paltry 102. With the stock of fast bowlers at a high England's bowlers then let the fraternity down with a thoughtless display during the afternoon. Only when Australia had passed England's total did Andrew Strauss's attack begin to follow the example set by their opponents.
The modern game is obsessed by pace, with many selectors and pundits believing that 85mph is the minimum speed a bowler needs to reach to be effective on the International stage. It is absolute tosh, as many of cricket's greatest bowlers have and continue to prove.
Yes, pace is important, but the one proviso is that the ball is pitched on the correct spot – a length that makes life for a batsman uncomfortable and difficult for him to complete the task he is paid to do – score runs. If the ball is released at speed but comes out like the spray from an aerosol can, it only disappears to the boundary quicker. Much of the blame for the obsession can be laid at the feet of the speed gun at grounds and the egos of He-man bowlers.
James Anderson, Stephen Harmison, Graeme Onions and Stuart Broad could not blame their shortcomings on the fact they needed time to acclimatise – Australia's bowlers had already shown them how to bowl at Headingley earlier in the day. With the ball swinging Australia's bowlers largely pitched the ball up, drawing England's top order in to apprehensive prods and pushes that fed the hands of an expectant slip cordon. On watching this England's bowlers then opted to test the middle of the pitch, a transgression that kept the crowd rather than the slips busy.
The early dismissal of Simon Katich, who gloved a lifter from Stephen Harmison to leg gully, may have encouraged England's attack to bang the ball in. But with Australia's score rattling along at six runs an over it should not have taken long to work out this was not the correct tactic. The three lbws that followed highlighted the error.
Peter Siddle will grab the headlines for his second five-wicket haul in Test cricket, but it was Stuart Clark who set the tone for Australia with three pre-lunch wickets in a beautiful seven-over spell of bowling that conceded only seven runs. Clark is a bowler from the old school, a seamer who takes great pride in bowling a consistent line and length.
Clark is not fast, bowling generally between 78 and 82mph, and like many traditional seamers he struggles to comprehend the trends and attitudes of modern bowlers. Half-volleys and long hops are not part of his game plan, not at any cost. In Clark's world batsmen have to work for their runs.
In Glenn McGrath, Clark had a great tutor, possibly the best line and length bowler the game has seen. Like Clark, McGrath cannot understand why so many young bowlers continually press the gamble button as they desperately search for wickets. In many ways their attitude mirrors that of the world outside. Instant gratification rather than patient reward is what they want.
"Work on the ego of the batsman," was one of McGrath's mottos. Basically he was saying that batsmen want to be in control and score freely when they bat, and when they are not they are likely to make mistakes attempting to gain it.
It therefore makes sense for bowlers to follow the logic of McGrath and the example set by Clark, especially at a venue like Headingley. Batsmen will make mistakes so be patient, wait for the errors to come along and grasp the chance when it arises. Bowlers may have the reputation of being a bit thick but it is batsmen who are really the dopey, impatient so and sos.
Spicy pitch makes life more fun
England may have been second best yesterday but the play highlighted how much more enjoyable Test cricket is when wickets are falling regularly.
A pitch used to be described as good if it was nice to bat on. If Test cricket is to remain attractive that must change, and groundsmen need to be encouraged to produce pitches that offer bowlers assistance.
Test cricket should not be played on minefields that offer inconsistent bounce and generous lateral movement, but scores of 450-plus should be a rarity not the norm.
Fast bowlers have the somewhat unfair reputation of being big, thick, dopey so and sos, incapable of thinking for themselves.
The stigma is historical, arising from the fact that previous generations of batsmen tended to be privately educated chaps that had picked up a degree at some flash university. The roots of a fast bowler tend to be far more working-class, as England's northern-based bowling attack highlights.
Australia's fast bowlers made a mockery of the generalisation yesterday morning as they intelligently adapted their game to capitalise on helpful bowling conditions to dismantle England's batting line-up for a paltry 102. With the stock of fast bowlers at a high England's bowlers then let the fraternity down with a thoughtless display during the afternoon. Only when Australia had passed England's total did Andrew Strauss's attack begin to follow the example set by their opponents.
The modern game is obsessed by pace, with many selectors and pundits believing that 85mph is the minimum speed a bowler needs to reach to be effective on the International stage. It is absolute tosh, as many of cricket's greatest bowlers have and continue to prove.
Yes, pace is important, but the one proviso is that the ball is pitched on the correct spot – a length that makes life for a batsman uncomfortable and difficult for him to complete the task he is paid to do – score runs. If the ball is released at speed but comes out like the spray from an aerosol can, it only disappears to the boundary quicker. Much of the blame for the obsession can be laid at the feet of the speed gun at grounds and the egos of He-man bowlers.
James Anderson, Stephen Harmison, Graeme Onions and Stuart Broad could not blame their shortcomings on the fact they needed time to acclimatise – Australia's bowlers had already shown them how to bowl at Headingley earlier in the day. With the ball swinging Australia's bowlers largely pitched the ball up, drawing England's top order in to apprehensive prods and pushes that fed the hands of an expectant slip cordon. On watching this England's bowlers then opted to test the middle of the pitch, a transgression that kept the crowd rather than the slips busy.
The early dismissal of Simon Katich, who gloved a lifter from Stephen Harmison to leg gully, may have encouraged England's attack to bang the ball in. But with Australia's score rattling along at six runs an over it should not have taken long to work out this was not the correct tactic. The three lbws that followed highlighted the error.
Peter Siddle will grab the headlines for his second five-wicket haul in Test cricket, but it was Stuart Clark who set the tone for Australia with three pre-lunch wickets in a beautiful seven-over spell of bowling that conceded only seven runs. Clark is a bowler from the old school, a seamer who takes great pride in bowling a consistent line and length.
Clark is not fast, bowling generally between 78 and 82mph, and like many traditional seamers he struggles to comprehend the trends and attitudes of modern bowlers. Half-volleys and long hops are not part of his game plan, not at any cost. In Clark's world batsmen have to work for their runs.
In Glenn McGrath, Clark had a great tutor, possibly the best line and length bowler the game has seen. Like Clark, McGrath cannot understand why so many young bowlers continually press the gamble button as they desperately search for wickets. In many ways their attitude mirrors that of the world outside. Instant gratification rather than patient reward is what they want.
"Work on the ego of the batsman," was one of McGrath's mottos. Basically he was saying that batsmen want to be in control and score freely when they bat, and when they are not they are likely to make mistakes attempting to gain it.
It therefore makes sense for bowlers to follow the logic of McGrath and the example set by Clark, especially at a venue like Headingley. Batsmen will make mistakes so be patient, wait for the errors to come along and grasp the chance when it arises. Bowlers may have the reputation of being a bit thick but it is batsmen who are really the dopey, impatient so and sos.
Spicy pitch makes life more fun
England may have been second best yesterday but the play highlighted how much more enjoyable Test cricket is when wickets are falling regularly.
A pitch used to be described as good if it was nice to bat on. If Test cricket is to remain attractive that must change, and groundsmen need to be encouraged to produce pitches that offer bowlers assistance.
Test cricket should not be played on minefields that offer inconsistent bounce and generous lateral movement, but scores of 450-plus should be a rarity not the norm.
Little has changed since the secretive days of the Suez crisis
Robert Fisk's World:
It seems we really are going to have an Iraq inquiry. But I'm not holding my breath
Saturday, 8 August 2009
If I were an examiner – a secret Fisk-wish ever since my schooldays – I would award a double-A to Professor Peter Beck of Kingston University. "Given your interest in the present-day resonance of history, including the Iraq inquiry," he writes to me, "you might be interested in the enclosed article..." Oh indeed, Professor Beck, I said to myself.
For his recent paper is a time capsule of the High Tory need to avoid – ever – a public inquiry into the Suez scandal. Yes, the predecessors of Mr Cameron's very own party were doing everything they could to prevent the shameful story of Britain's collusion with France and Israel to invade Egypt. No 10, it turns out, was busy destroying the secret documents of the agreement at Sèvres where the three powers concocted their outrageous act of aggression. Thanks only to the Israelis, we still have the Sèvres papers, the British copies of which Prime Minister Anthony Eden may well have personally burned.
Of course, it was Labour that was then demanding a public inquiry, not the Tories, although the parallels with the whimsical inquiry with which Sir John Chilcot threatens us – including the public appearance of Lord Blair of Kut al-Amara himself – are so ironic and fatuous that they will need no reference from me. Read Suez. Think Iraq.
It was Hugh Gaitskill who first noted that "if there was collusion, the motives of the men who practised it were so various that, sooner or later, they are bound to start giving one another away". Eden tried to bluff it out. "Certainly the documents are there, and will remain there," he told Gaitskill in the Commons. "Anybody who wishes to dive into them, in due course, can dive into them!" "In due course", indeed. Eden had already burned some of them. Eden's successor, Harold Macmillan – who had his own dark role in Suez – tried the same insouciance. "I believe history will justify what we did," he blithely announced. A few weeks later, he was bellyaching about how "our best interests will be served if we concentrate on the future and do not revive controversy".
That, I suppose was the 1950s version of "closure" and "moving on". Macmillan thought that the desire to turn up the facts on Suez had more to do with party politics than a desire for real history. In any event, as Beck rightly points out, "the politics of affluence superseded the politics of Suez". Yet Macmillan was so frightened of the truth that he insisted that even the Ministry of Defence could not publish a dispatch by British General Sir Charles Keightley about the military campaign without his personal authorisation. The published version, he decided, must give rise to no "public difficulties", "political controversy" or "friction in foreign relations". The Foreign Office observed that publication must be accompanied by "no flourish of trumpets".
Labour's Michael Stewart, as foreign secretary less than a decade later, commented that the only way to gain "a true history of events" would be to hold – whoops – a public inquiry. But Macmillan had already forestalled that, even disapproving of a proposed study by the Joint Services Staff College on the grounds that it would have "obvious political implications". It was only in 1986 that the government of Margaret Thatcher concluded that the British copy of the Sèvres meeting had been "destroyed by Sir Anthony Eden himself or by a No 10 Private Secretary".
There were precedents for a public inquiry. There had been inquiries into the disasters at Gallipoli and in First World War Mesopotamia (ie Iraq!). Yet there was Alec Douglas-Home in 1964 – most of these characters had a role in Suez – telling the Commons that "no grounds" existed for an inquiry.
By the time Harold Wilson became prime minister, Labour's demands melted in the light of power. He didn't want to look back at a period when his own party was accused of pursuing an unpatriotic course – Gaitskill opposed the whole Suez adventure – which could divide the nation. "I do not believe that an official history would be the way to deal with the situation," he told Michael Foot. Yet this was the same Wilson who told the Commons that "there is now strong prima facie evidence of the whole thing being a put-up job in advance of the fighting we were supposed to intervene to stop".
Wilson did subsequently float the idea of an inquiry – partly, it seems, to distract attention from the 1966 sterling crisis. But one of Macmillan's former private secretaries announced that even a parliamentary debate on Suez would serve no purpose "from the national point of view". The Tory high command deemed it was "still too early to have full disclosure of this episode [sic]". Then it was the Zionist Richard Crossman who decided "to prevent the setting up of an inquiry and to minimise public discussion of this issue for both domestic and foreign policy reasons". Foreign Secretary George Brown now concluded that "the harmful effects of such an inquiry would, I am convinced, be worldwide".
By November 1966, it was our old pal Tam Dalyell who was waffling along the same lines, warning Crossman that "to establish a select committee in order to rake over the ashes might make us liable to the charge of diverting attention from the modern scene to ancient history". This wonderful stuff goes on and on. First, Suez is too recent to discuss. Then it's too far in the past to bother about. It was left to Wilson again to utter the truly Blair-like assertion that it would be unwise for the government to launch an inquiry "when all our efforts should be directed toward reducing the tensions in the Middle East".
The French didn't care much about their own Suez secrets – they had just suffered defeat in the Algerian war – but the British fear of Middle East inquiries never seemed to fade. "This is not the time for such (inquiry) decisions," Blair said of Iraq in 2006, while Lord Malloch-Brown (Foreign Office minister of state) came out with the old canard about the need for distance and perspective.
Well, it seems we really are going to have an inquiry this time round. But I'm not holding my breath for any revelations from the safe pairs of hands whom Gordon Brown has manoeuvred into position for Sir John Chilcot. Crossman on Suez is the best cure for optimism. "It means keeping out of the Middle East," he wrote, "and treating Arabs like adult Latin Americans, who don't want to be improved or democratised and who must be allowed to have what regimes they like."
And that's OUCH! from me.
Windows Live Messenger: Celebrate 10 amazing years with free winks and emoticons. Get Them Now
The truth about lying: who does it, and why Are human beings by nature duplicitous?
Psychologist Robert Feldman reports on what his research reveals about fibbing. Plus Pete Docherty, Katie Price and more come clean about their biggest porkies
Hillary Clinton, while campaigning for the US Democratic presidential nomination last spring, described a memorable trip she made to war-torn Bosnia more than a decade earlier. "I remember landing under sniper fire," she said. "There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base." News footage, however, showed Clinton strolling calmly with her daughter, Chelsea, upon arrival. During that same election cycle, Mitt Romney, a candidate for the Republican nomination, claimed his father, George Romney, a former Michigan governor, had "marched with Martin Luther King". It was soon revealed that the elder Romney had never actually done so.
It would be easy to conclude, particularly in the wake of the MPs' expenses scandal, that politicians are simply by nature duplicitous, and people who seek power are the kind of people who lie. But what if their dishonest behaviour actually makes them resemble us more than it sets them apart?
To attempt to find out just how common lying is, I conducted a study of more than 100 people in ordinary social situations. Two at a time, I had participants meet and spend 10 minutes getting to know each other. I didn't tell them I was conducting a study of lying. Instead, I said I was interested in investigating how people interact when they meet someone new. Most studies of lying involve a fairly artificial setup, but I wanted to reproduce a typical, everyday experience.
I did, though, introduce one other twist. I wanted to know if the frequency of lying might change with the specifics of the conversation. Perhaps some social interactions were more prone to deception than others. To try to find out, I told some of the participants to attempt to come across as very likable, as they might at a party, for example. In other cases, I told one of the participants to convince the other that he or she was very competent, as they might in a job interview. Everyone else I instructed simply to get to know the other person. I reasoned that while assigning goals to certain people did introduce a slightly greater degree of artificiality into the experiment, social situations in which one person is trying to demonstrate his or her charm to another are very common. As far as the pairs of strangers were concerned, deception had no relevance to the study. Something I didn't mention was that each pair's entire conversation would be secretly videotaped.
After the conversation finished, I revealed the secret surveillance to the participants and asked each one to watch the video, identifying, moment by moment, any instances in which he or she said something that was "inaccurate". (I didn't ask participants to report "lies", wanting to avoid their becoming defensive or embarrassed and, consequently, not admitting to deception.)
One conversation, between a man and a woman I'll call Tim and Allison, was fairly typical. Tim was a laid-back college student. Once they were a little bit acquainted, he told her about his band.
Tim: We just signed to a record company, actually.
Allison: Really?
Tim: Yeah, Epitaph.
Allison: Do you sing or...
Tim: Yeah, I'm the lead singer.
Allison: Wow!
Another participant, Natasha, also discussed her musical background, telling her partner how she entered competitions as a pianist and toured the country with a chamber group. It was all more or less what you would expect from two strangers making small talk – one person, directly or unconsciously, trying to impress another with his or her achievements, or just passing the time by discussing his or her life.
What makes this remarkable is that they are all lies. Natasha never toured the country. Tim's band didn't sign with Epitaph. In fact, there's no band at all. And these are only a few examples of what I found to be an extraordinary pattern. Participants in my study confessed to lies that were big and small, rooted in truth and fantastic, relatively defensible and simply baffling. Further, the lying was not limited to those to whom I had given a directive to appear likable or competent. These people lied with greater frequency, but even those with no specific agenda lied regularly.
All told, I found that most people lied three times in the course of a 10-minute conversation. Some lied as many as 12 times, and those are just the lies participants admitted to. It's possible the frequency was even higher. Of course, it would be easy to conclude that the randomly selected participants in my study just happened to be unusually duplicitous, or that some factor in my study induced people to lie far more than they normally would. But my subsequent research on conversations between unacquainted strangers has shown, fairly consistently, that they lie to each other about three times every 10 minutes, both inside and outside the lab.
Indeed, diary research studies, in which participants are asked to record their daily social interactions and indicate which contained lies, show that lying occurs regularly even in the most intimate relationships. Although deception occurs at lower levels, and is often meant to put another person at ease ("Of course you're not putting on weight"), lying is still a routine part of the rapport between spouses, lovers, close friends and family members.
But why, when they meet strangers, do people feel compelled to make up bands they don't belong to or competitions they never entered? We probably don't spend much time wondering why a tobacco executive would lie about the dangers of cigarettes. Nor does it baffle us when a mechanic tells us a replacement part costs three times more than it actually does. Profit, the avoidance of punishment: these are the sorts of motivations we often associate with deception. We might also include mental imbalance as another motive for lies, yet conditions such as mythomania, or pathological lying, are very rare.
Tellingly, those instructed to impress their partner with their likability tended to tell lies about their feelings. They distorted their true opinions and emotions, often in order to mirror those expressed by their partners. Meanwhile, those instructed to come off as competent tended to invent achievements and plans that would enhance the way they were perceived. But when Tim told Allison about his nonexistent band and nonexistent record contract, he did so without any larger agenda of fooling her. For all he knew, he'd never see Allison again. Tim's lies seemed to involve her only secondarily, and his primary goal to be fostering his own persona or addressing his own insecurities when meeting a new person. To put it simply, Tim's lies were about Tim.
Sometimes, too, lying can be used to benefit the conversation itself. There are times in any interaction when a strict adherence to the truth would only interrupt its natural flow. When a friend wants to tell you about the great time he had at Sam's house over the weekend, and asks, "You know where Sam's house is, right?" the conversation goes much more smoothly if you nod and say, "Oh, yes, Sam's house." I call such deception "lies of social convenience". Indeed, psychologists have found an association between socially successful people and skill at deception. Popular people tend to be good liars.
But why lie to appear competent or likable? Why not just be yourself? In fact, "just being yourself", if we examine it closely, takes creative effort. Our expression of who we are involves choices that reflect social and interpersonal context, our mood, our personality, our need to maintain our self-image and so on. If we consider self-presentation as a creative process, we can see how it can easily slide into deception. Every interaction involves decisions about which attributes to emphasise and which to minimise, which impulses to follow and which to ignore. At some point, we may not be choosing among our actual traits and our sincere reactions. We may simply fabricate the traits and reactions the social situation calls for, or that we think it calls for. In other words, we might lie.
Alexi Santana's application to Princeton University must have stood out right away. Rather than include an essay about a backpacking trip or his private school education, Santana discussed his life as a parentless ranch hand: sleeping outdoors, teaching himself the great works of world literature, and running for miles in the Nevada wilderness. An admission officer's dream, Santana was accepted into the class of 1993. He became a sporting standout and earned mostly As.
Then, at a sporting event, a Yale student recognised Santana as James Hogue, an ex-convict in his 30s who had posed as a high school student years earlier. Hogue was eventually jailed for defrauding the Princeton student-aid office of financial assistance.
You could write volumes about the pathology of people like Hogue – what compels them to deceive, how they live with their fabrications. The causes underlying impostorism remain a topic both fascinating and elusive. Many psychologists would argue that even the perpetrators don't really know why they've carried out their deceit. Yet perhaps the most incredible part of Hogue's unlikely story is that for so long, he got away with it. He was far from the polished, unflappable charlatan we expect from movie and television portrayals of con men, yet he fooled some of the brightest, most educated people in America. Hogue's success illustrates an essential truth about deception, one we rarely recognise: lying is easy.
Study after study has shown that most people have a great deal of faith in their ability to catch a lie. Few of us think of ourselves as pushovers, easily susceptible to cons and dishonesty. But in 2006, psychologists Charles Bond and Bella DePaulo analysed tens of thousands of individual performances and found that people can differentiate truth from lies only 47% of the time. In other words, we are actually a little worse at figuring out when someone is deceiving us than we would be if we just guessed randomly.
Why is that? First, let's assume lie detection is a skill like any other. The way you acquire and improve upon a skill is through practice. How, though, does one practise lie detection in ordinary life? Identifying a lie is difficult to master. We think that when someone tells a lie, there are red flags: a person lying will avert his gaze. He'll shuffle his feet or drum his fingers. If it's a particularly big lie, he might even start to sweat. When we don't see these red flags, we often decide the person is telling the truth.
Yet experts on deception have concluded that there are no physical tics that universally signal that a person is lying. Individual differences in how people lie are strong. One person might blink rapidly when she lies; another might stare at you, taking elongated pauses between blinks. Further, practised liars learn their own giveaways (or the conventionally assumed giveaways, such as gaze aversion) and teach themselves to avoid them.
Even polygraph machines are unreliable. The polygraph is predicated on the idea that when people lie, they experience anxiety, but the fact is that some people don't get anxious when they lie. Some even experience pleasure. Paul Ekman of the University of California is one of the leading researchers in the area of nonverbal behaviour and deception. He has identified a feeling among liars he calls "duping delight". Just as people will jump out of aeroplanes and climb mountains precisely because of the physical and mental challenges, so, too, do people find an almost recreational thrill in deception.
Once we recognise that it is possible to enjoy a lie with intent, this form of deceit becomes more understandable and more complex. It is not just the function of the lie that matters. It is the form, too. The act of telling the lie brings a kind of profit: an adrenaline rush, a feeling of superiority or accomplishment. Just like a lie that defends self-esteem, one with intent can make a liar feel good.
Meanwhile most of us, in fact, don't spend a lot of time in our daily lives wondering, "Am I being lied to?" This psychological phenomenon, in which we assume we aren't being deceived, is known as the truth bias: our default belief is that other people are telling the truth. Someone needs to give us a compelling reason to think they're lying; otherwise the idea never occurs to us. Recent thinking in the psychological community suggests the truth bias operates as a judgment heuristic, or cognitive rule of thumb. Rather than assess every situation based on all the available information, we use subconscious mental rules to make quick determinations about things. To scrutinise a statement for the truth takes up mental energy – and we like to save that when we can. But this allows liars to float beneath our cognitive radar.
Other times, we simply don't want to uncover a lie. It's not only less strenuous cognitively, it's also more flattering and comforting to accept certain statements at face value. But, like the truth bias, what I call the "willing accomplice principle" may operate more powerfully than we might expect.
Imagine that an estate agent is showing you a house. Not surprisingly, she is falling over herself to praise it. You know enough to be sceptical of someone with an obvious financial motive but you love the house, too. If you are like most people, your initially sceptical assessment of what the estate agent says probably begins to change: instead of being on guard against deceit, you will start to want to believe her. In this way, we enter into a kind of unstated conspiracy with liars.
In many cases, a liar and the target of the lie both benefit from the lie's success. If a liar can hit upon deception that we'd like to believe, too, we're both hoping on some level that the lie won't be revealed for what it is.
Consider the collapse of the American sub-prime market in 2008. Lenders extended loans to those with terrible track records of repayment. There was mutually convenient deception on both sides: borrowers with miserable credit ratings assured lenders that this time they would repay their loans; lenders assured borrowers that astronomical interest rates wouldn't lead them to financial ruin and eventual default. Both sides had a financial stake in allowing the deception to continue. Economic forces, though, rarely tolerate such arrangements. The (now seemingly inevitable) collapse of the market triggered global repercussions that are still being felt.
Although it seems clear in retrospect that vigilance in seeking the truth would have been appropriate, the problem is that the cognitive rules we play by – the truth bias, our trust in flatterers, our need for cognitive efficiency – are not, as the Princeton professors discovered, ones we can easily alter.
• This is an edited extract from The Liar In Your Life: How Lies Work And What They Tell Us About Ourselves, by Robert Feldman, published by Virgin Books on 13 August at £18.99. To order a copy for £16.99, with free UK p&p, go to guardian.co.uk/bookshop or call 0330 333 6846.
Famous fibbers
"The last lie I told was 'not guilty'."
Pete Doherty, musician
"Earlier I said, 'I'm ready, I'll be down in a minute.' But I was only getting in the shower. Half an hour later…"
Katie Price, businesswoman
"I've never lied in all my life."
Arthur Smith, comedian
"My last lie was, 'I am absolutely fine.' If you ask anyone over 70 how they are and they say, I am absolutely fine' they are lying."
Jilly Cooper, author
"I often lie about my name. If you were called Lewycka, wouldn't you? I say Mary Lewis, or occasionally I branch out into something more exotic like Lucinda Firestorm."
Marina Lewycka, author
"The most recent outright lie I told was to my publisher, about how fantastically well I was getting on with writing my current book."
John Simpson, journalist
"I'm like everybody else: if somebody says, 'Do you like my new dress?' then I'm going to say yes."
Ann Widdecombe, MP
"I declined work by claiming that I was busy doing something else. And I didn't have to do it, my agent did it very politely on my behalf, so the lie was once removed. But it was me lying."
Reece Shearsmith, comedian
"The only lie I ever tell is in answer to the question: 'Can you come to my wedding/birthday party/baby's christening?' 'Oh, when is it?... Oh, damn, I can't.' This has gone wrong only once (and we put it in The Office) when someone where I used to work invited me to their party and I said: 'Oh, I can't… When is it?' The biggest ever white lie I had ready was when my mum was dying. If she asked me if I thought there was a God, I planned to say, 'Yes. Definitely.' She never asked. I wish she had."
Ricky Gervais, comedian.
Hillary Clinton, while campaigning for the US Democratic presidential nomination last spring, described a memorable trip she made to war-torn Bosnia more than a decade earlier. "I remember landing under sniper fire," she said. "There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base." News footage, however, showed Clinton strolling calmly with her daughter, Chelsea, upon arrival. During that same election cycle, Mitt Romney, a candidate for the Republican nomination, claimed his father, George Romney, a former Michigan governor, had "marched with Martin Luther King". It was soon revealed that the elder Romney had never actually done so.
It would be easy to conclude, particularly in the wake of the MPs' expenses scandal, that politicians are simply by nature duplicitous, and people who seek power are the kind of people who lie. But what if their dishonest behaviour actually makes them resemble us more than it sets them apart?
To attempt to find out just how common lying is, I conducted a study of more than 100 people in ordinary social situations. Two at a time, I had participants meet and spend 10 minutes getting to know each other. I didn't tell them I was conducting a study of lying. Instead, I said I was interested in investigating how people interact when they meet someone new. Most studies of lying involve a fairly artificial setup, but I wanted to reproduce a typical, everyday experience.
I did, though, introduce one other twist. I wanted to know if the frequency of lying might change with the specifics of the conversation. Perhaps some social interactions were more prone to deception than others. To try to find out, I told some of the participants to attempt to come across as very likable, as they might at a party, for example. In other cases, I told one of the participants to convince the other that he or she was very competent, as they might in a job interview. Everyone else I instructed simply to get to know the other person. I reasoned that while assigning goals to certain people did introduce a slightly greater degree of artificiality into the experiment, social situations in which one person is trying to demonstrate his or her charm to another are very common. As far as the pairs of strangers were concerned, deception had no relevance to the study. Something I didn't mention was that each pair's entire conversation would be secretly videotaped.
After the conversation finished, I revealed the secret surveillance to the participants and asked each one to watch the video, identifying, moment by moment, any instances in which he or she said something that was "inaccurate". (I didn't ask participants to report "lies", wanting to avoid their becoming defensive or embarrassed and, consequently, not admitting to deception.)
One conversation, between a man and a woman I'll call Tim and Allison, was fairly typical. Tim was a laid-back college student. Once they were a little bit acquainted, he told her about his band.
Tim: We just signed to a record company, actually.
Allison: Really?
Tim: Yeah, Epitaph.
Allison: Do you sing or...
Tim: Yeah, I'm the lead singer.
Allison: Wow!
Another participant, Natasha, also discussed her musical background, telling her partner how she entered competitions as a pianist and toured the country with a chamber group. It was all more or less what you would expect from two strangers making small talk – one person, directly or unconsciously, trying to impress another with his or her achievements, or just passing the time by discussing his or her life.
What makes this remarkable is that they are all lies. Natasha never toured the country. Tim's band didn't sign with Epitaph. In fact, there's no band at all. And these are only a few examples of what I found to be an extraordinary pattern. Participants in my study confessed to lies that were big and small, rooted in truth and fantastic, relatively defensible and simply baffling. Further, the lying was not limited to those to whom I had given a directive to appear likable or competent. These people lied with greater frequency, but even those with no specific agenda lied regularly.
All told, I found that most people lied three times in the course of a 10-minute conversation. Some lied as many as 12 times, and those are just the lies participants admitted to. It's possible the frequency was even higher. Of course, it would be easy to conclude that the randomly selected participants in my study just happened to be unusually duplicitous, or that some factor in my study induced people to lie far more than they normally would. But my subsequent research on conversations between unacquainted strangers has shown, fairly consistently, that they lie to each other about three times every 10 minutes, both inside and outside the lab.
Indeed, diary research studies, in which participants are asked to record their daily social interactions and indicate which contained lies, show that lying occurs regularly even in the most intimate relationships. Although deception occurs at lower levels, and is often meant to put another person at ease ("Of course you're not putting on weight"), lying is still a routine part of the rapport between spouses, lovers, close friends and family members.
But why, when they meet strangers, do people feel compelled to make up bands they don't belong to or competitions they never entered? We probably don't spend much time wondering why a tobacco executive would lie about the dangers of cigarettes. Nor does it baffle us when a mechanic tells us a replacement part costs three times more than it actually does. Profit, the avoidance of punishment: these are the sorts of motivations we often associate with deception. We might also include mental imbalance as another motive for lies, yet conditions such as mythomania, or pathological lying, are very rare.
Tellingly, those instructed to impress their partner with their likability tended to tell lies about their feelings. They distorted their true opinions and emotions, often in order to mirror those expressed by their partners. Meanwhile, those instructed to come off as competent tended to invent achievements and plans that would enhance the way they were perceived. But when Tim told Allison about his nonexistent band and nonexistent record contract, he did so without any larger agenda of fooling her. For all he knew, he'd never see Allison again. Tim's lies seemed to involve her only secondarily, and his primary goal to be fostering his own persona or addressing his own insecurities when meeting a new person. To put it simply, Tim's lies were about Tim.
Sometimes, too, lying can be used to benefit the conversation itself. There are times in any interaction when a strict adherence to the truth would only interrupt its natural flow. When a friend wants to tell you about the great time he had at Sam's house over the weekend, and asks, "You know where Sam's house is, right?" the conversation goes much more smoothly if you nod and say, "Oh, yes, Sam's house." I call such deception "lies of social convenience". Indeed, psychologists have found an association between socially successful people and skill at deception. Popular people tend to be good liars.
But why lie to appear competent or likable? Why not just be yourself? In fact, "just being yourself", if we examine it closely, takes creative effort. Our expression of who we are involves choices that reflect social and interpersonal context, our mood, our personality, our need to maintain our self-image and so on. If we consider self-presentation as a creative process, we can see how it can easily slide into deception. Every interaction involves decisions about which attributes to emphasise and which to minimise, which impulses to follow and which to ignore. At some point, we may not be choosing among our actual traits and our sincere reactions. We may simply fabricate the traits and reactions the social situation calls for, or that we think it calls for. In other words, we might lie.
Alexi Santana's application to Princeton University must have stood out right away. Rather than include an essay about a backpacking trip or his private school education, Santana discussed his life as a parentless ranch hand: sleeping outdoors, teaching himself the great works of world literature, and running for miles in the Nevada wilderness. An admission officer's dream, Santana was accepted into the class of 1993. He became a sporting standout and earned mostly As.
Then, at a sporting event, a Yale student recognised Santana as James Hogue, an ex-convict in his 30s who had posed as a high school student years earlier. Hogue was eventually jailed for defrauding the Princeton student-aid office of financial assistance.
You could write volumes about the pathology of people like Hogue – what compels them to deceive, how they live with their fabrications. The causes underlying impostorism remain a topic both fascinating and elusive. Many psychologists would argue that even the perpetrators don't really know why they've carried out their deceit. Yet perhaps the most incredible part of Hogue's unlikely story is that for so long, he got away with it. He was far from the polished, unflappable charlatan we expect from movie and television portrayals of con men, yet he fooled some of the brightest, most educated people in America. Hogue's success illustrates an essential truth about deception, one we rarely recognise: lying is easy.
Study after study has shown that most people have a great deal of faith in their ability to catch a lie. Few of us think of ourselves as pushovers, easily susceptible to cons and dishonesty. But in 2006, psychologists Charles Bond and Bella DePaulo analysed tens of thousands of individual performances and found that people can differentiate truth from lies only 47% of the time. In other words, we are actually a little worse at figuring out when someone is deceiving us than we would be if we just guessed randomly.
Why is that? First, let's assume lie detection is a skill like any other. The way you acquire and improve upon a skill is through practice. How, though, does one practise lie detection in ordinary life? Identifying a lie is difficult to master. We think that when someone tells a lie, there are red flags: a person lying will avert his gaze. He'll shuffle his feet or drum his fingers. If it's a particularly big lie, he might even start to sweat. When we don't see these red flags, we often decide the person is telling the truth.
Yet experts on deception have concluded that there are no physical tics that universally signal that a person is lying. Individual differences in how people lie are strong. One person might blink rapidly when she lies; another might stare at you, taking elongated pauses between blinks. Further, practised liars learn their own giveaways (or the conventionally assumed giveaways, such as gaze aversion) and teach themselves to avoid them.
Even polygraph machines are unreliable. The polygraph is predicated on the idea that when people lie, they experience anxiety, but the fact is that some people don't get anxious when they lie. Some even experience pleasure. Paul Ekman of the University of California is one of the leading researchers in the area of nonverbal behaviour and deception. He has identified a feeling among liars he calls "duping delight". Just as people will jump out of aeroplanes and climb mountains precisely because of the physical and mental challenges, so, too, do people find an almost recreational thrill in deception.
Once we recognise that it is possible to enjoy a lie with intent, this form of deceit becomes more understandable and more complex. It is not just the function of the lie that matters. It is the form, too. The act of telling the lie brings a kind of profit: an adrenaline rush, a feeling of superiority or accomplishment. Just like a lie that defends self-esteem, one with intent can make a liar feel good.
Meanwhile most of us, in fact, don't spend a lot of time in our daily lives wondering, "Am I being lied to?" This psychological phenomenon, in which we assume we aren't being deceived, is known as the truth bias: our default belief is that other people are telling the truth. Someone needs to give us a compelling reason to think they're lying; otherwise the idea never occurs to us. Recent thinking in the psychological community suggests the truth bias operates as a judgment heuristic, or cognitive rule of thumb. Rather than assess every situation based on all the available information, we use subconscious mental rules to make quick determinations about things. To scrutinise a statement for the truth takes up mental energy – and we like to save that when we can. But this allows liars to float beneath our cognitive radar.
Other times, we simply don't want to uncover a lie. It's not only less strenuous cognitively, it's also more flattering and comforting to accept certain statements at face value. But, like the truth bias, what I call the "willing accomplice principle" may operate more powerfully than we might expect.
Imagine that an estate agent is showing you a house. Not surprisingly, she is falling over herself to praise it. You know enough to be sceptical of someone with an obvious financial motive but you love the house, too. If you are like most people, your initially sceptical assessment of what the estate agent says probably begins to change: instead of being on guard against deceit, you will start to want to believe her. In this way, we enter into a kind of unstated conspiracy with liars.
In many cases, a liar and the target of the lie both benefit from the lie's success. If a liar can hit upon deception that we'd like to believe, too, we're both hoping on some level that the lie won't be revealed for what it is.
Consider the collapse of the American sub-prime market in 2008. Lenders extended loans to those with terrible track records of repayment. There was mutually convenient deception on both sides: borrowers with miserable credit ratings assured lenders that this time they would repay their loans; lenders assured borrowers that astronomical interest rates wouldn't lead them to financial ruin and eventual default. Both sides had a financial stake in allowing the deception to continue. Economic forces, though, rarely tolerate such arrangements. The (now seemingly inevitable) collapse of the market triggered global repercussions that are still being felt.
Although it seems clear in retrospect that vigilance in seeking the truth would have been appropriate, the problem is that the cognitive rules we play by – the truth bias, our trust in flatterers, our need for cognitive efficiency – are not, as the Princeton professors discovered, ones we can easily alter.
• This is an edited extract from The Liar In Your Life: How Lies Work And What They Tell Us About Ourselves, by Robert Feldman, published by Virgin Books on 13 August at £18.99. To order a copy for £16.99, with free UK p&p, go to guardian.co.uk/bookshop or call 0330 333 6846.
Famous fibbers
"The last lie I told was 'not guilty'."
Pete Doherty, musician
"Earlier I said, 'I'm ready, I'll be down in a minute.' But I was only getting in the shower. Half an hour later…"
Katie Price, businesswoman
"I've never lied in all my life."
Arthur Smith, comedian
"My last lie was, 'I am absolutely fine.' If you ask anyone over 70 how they are and they say, I am absolutely fine' they are lying."
Jilly Cooper, author
"I often lie about my name. If you were called Lewycka, wouldn't you? I say Mary Lewis, or occasionally I branch out into something more exotic like Lucinda Firestorm."
Marina Lewycka, author
"The most recent outright lie I told was to my publisher, about how fantastically well I was getting on with writing my current book."
John Simpson, journalist
"I'm like everybody else: if somebody says, 'Do you like my new dress?' then I'm going to say yes."
Ann Widdecombe, MP
"I declined work by claiming that I was busy doing something else. And I didn't have to do it, my agent did it very politely on my behalf, so the lie was once removed. But it was me lying."
Reece Shearsmith, comedian
"The only lie I ever tell is in answer to the question: 'Can you come to my wedding/birthday party/baby's christening?' 'Oh, when is it?... Oh, damn, I can't.' This has gone wrong only once (and we put it in The Office) when someone where I used to work invited me to their party and I said: 'Oh, I can't… When is it?' The biggest ever white lie I had ready was when my mum was dying. If she asked me if I thought there was a God, I planned to say, 'Yes. Definitely.' She never asked. I wish she had."
Ricky Gervais, comedian.
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