Trust: Can it make a Comeback?

I may be dating myself but I actually do remember when deals were closed with a handshake. And when someone said “My word is my bond” you simply believed it. Or when a customer said “The check is in the mail” it really was. Trust was the grease that made the wheels of commerce turn more efficiently.

Not anymore. And that lack of trust is threatening to deal a body blow to our way of life.

Certainly one can argue that greed and deceit have been part of business dealings since the dawn of commerce. And maybe our 24 hour news cycle just makes us more aware of human weakness. But somehow we never dreamed that lying, cheating and stealing could get so rampant as to permanently damage or bring down the entire U-S economy.

Now I am not so sure.

I know. We survived the Enron scandal, the tech bubble that burst and the Wall Street meltdown after the 9/11 attacks. But this current downturn is much more systemic. Politicians pushed to ease credit standards to gain favor with constituents. Lenders pushed underwriters to ignore or falsify credit reports purely for profit. And consumers simply pushed the envelope hoping for a big score. All were guilty of selfishly ignoring a basic economic principle. Without trust in the marketplace, it cannot effectively function for long.

Now housing is a disaster because banks do not trust borrowers enough to lend them money. Commercial Real Estate is the next big bubble to burst because hard up retailers will simply walk away from leases, not trusting that customers will come back. And the credit card industry is bracing for millions of it’s tapped out card holders to simply cut up their plastic and stiff them. After all, that Wall Street icon stiffed his clients out of $50 billion bucks?

So we’ve lost trust not just in our institutions, but in ourselves and our neighbors. As Alexis de Tocqueville said centuries ago, “any free society founded on liberty, yet without a sacred moral code to govern the actions of individuals, cannot stand. It can only end in anarchy”.

To me that "sacred moral code" includes having trust in our fellow human beings. If we cannot find a way to get that back, de Tocqueville will be right.

(Brian Banmiller is a national Business Correspondent for CBS News Radio, free lance writer and public speaker. The former television business news anchor in San Francisco can be reached at brian@banmilleronbusiness.com .)