Research shows more and more how leaders in the banking industry are destroying our economy. Other researchers have determined that politicians and CEOs present the same psychologist characteristics as psychopaths. Mitchell Anderson looks at this in his article, “How to Stop Psychopath CEOs from Looting and Destroying Their Own Companies.”
Corporate fraud, rogue traders, rate fixing, money laundering. Why have these crimes become more prevalent in the 21st century? After the Great Depression, the people of the United States seemed to settle into a society that supported one another with the bill to help veterans after World War II, the development of the country’s infrastructure during the 1950s, and the growth of the unions and increase of salaries in the 1960s that strengthened the middle class.
Communal citizenship peaked in the early 1980s immediately before Ronald Reagan decided to move the wealth to the wealthiest, and the plight of the bottom 90 percent in the country has continually grown worse since that time. Five years ago, the worst recession since the Depression erased $14 trillion of household assets. Instead of learning a lesson from this disaster, the world’s financiers are proudly displaying their lack of integrity and honesty.
Anderson writes, “Perhaps expecting normal human behavior from many of these individuals is unrealistic because they are not normal–they are psychopaths.” In his analysis, regulation is futile. What is needed is psychological screening to keep people from positions of trust if they are medically unqualified.
Psychopathy is not insanity, and it’s not treatable. Linked to physical abnormalities in the amygdale region of the brain—the lizard part—it can be described as “emotional deafness.” Psychopaths pretend human reactions for the purposes of manipulation but feel nothing but self-interest. Ayn Rand’s heroes in Atlas Shrugged and The Fountainhead represent psychopathic behavior because they are parasites, just like about one percent of the general population.
Recently scientists have developed reliable screening testing, widely adopted in the criminal justice system, to ascertain who has this emotional disability. Dr. Robert Hare, a leading researcher in this area, said, “Not all psychopaths are in prison. Some are in the boardroom.” According to Dr. Clive Boddy, increasingly fluid corporate career paths help psychopaths conceal their disruptive workplace behavior and ascend to previously unattainable levels of authority. They gravitate to the banking sector because of their attraction to money, status, and power, even self-identifying as “masters of the universe.”
People with psychopathic traits are five times more common in senior management than the general population. While they are tireless self-promoters, they are also poor performers and toxic managers. In a study by Dr. Paul Babiak of 203 senior managers, those with psychopathic scores on screening tests scored lower on leadership, team building, performance, and effective management. They are also 25 times more likely to engage in workplace bullying than normal humans.
Because they are ignorant of psychopathic behavior, many employers think that psychopaths have the strength to be “cool under fire.” Babiak’s study concludes:
“Our finding that some companies viewed psychopathic executives as having leadership potential, despite having negative performance reviews and low ratings on leadership and management by subordinates, is evidence of the ability of these individuals to manipulate decision makers. Their excellent communication and convincing lying skills, which together would have made them attractive hiring candidates in the first place, apparently continued to serve them well in furthering their careers.”
Psychopaths not only fail to act in the interests of their employees but also cannot act on behalf of their clients. Banks may be actively searching for this characteristic.
Brian Basham said a banking colleague once confided to him, “At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles.” Insurance companies also suffer from the psychopaths in their leadership.
Although senior managers of banks and insurance companies have “fiduciary duty”–a legal obligation to act in the best interests of their clients and investors—psychopaths cannot do this because medically they are hardwired to act in their own best interests.
Those who promote free capitalism don’t understand that the system is operating on aberrant brain chemistry. The system fails because psychopaths have the most important roles in institutions of controlling the distribution of money. Government is left to clean up when the system fails, and statistics indicate that an inordinate number of politicians are psychopaths. Financial institutions mess up the economy, and politicians don’t care about cleaning it up.
Insurance companies lose 5 percent of revenues to employee fraud–$400 billion in the U.S. and $3.5 trillion worldwide, according to a 2012 study by the Association of Certified Fraud Examiners. Scams from executives and owners are three times costlier than by managers and nine times more than those from employees. Banking and the financial sector suffer more from fraud than any other industry. Between 2008 and 2009, fraud in the workplace increased by 55 percent with 49 percent greater losses. Experts expect these levels to continue rising.
Babiak, author of Snakes in Suits, said, “Lack of empathy, remorse and guilt are some of the defining features of a psychopath, whether they are incarcerated, out in public or working for an organization. They also lack honesty, modesty, empathy, and conscience. At the same time they are impulsive and have an anti-social lifestyle.
Other signs of psychopaths:
- they consistently present in a smooth, polished and charming way;
- they redirect conversations to focus around them;
- they discredit or put others down in an attempt to enhance their own status and reputation;
- they lie with ease to colleagues, clients and business associates; and
- they create internal power networks in the organization and use them for personal gain.
If you think that you know someone who is a psychopath, you might want to look at a more complete list of characteristics.
One percent of the population classified as psychopaths doesn’t seem that dangerous. But another 15 percent are classified as “almost psychopaths.” That means that one in every six or seven leaders and/or politicians fits this classification.
It’s my guess that most psychopathic politicians have collected in red states and the GOP part of Congress.