Our Cheating Hearts: Honor, Integrity and Playing by the Rules are All Out of Style

Don’t be the last honest sucker on Earth!

CHEATING, OF COURSE, IS NOT all upside. Fareed Zakaria, for instance, was caught borrowing heavily from a New Yorker story on gun control, and was suspended from Time and CNN.

“The first thing is, if we are getting caught, this is bad for us,” said Mr. Ariely. “The second is that we are creating a tremendous downside for society, and this can come back to haunt us. Think about living in a world where you can’t trust anybody.”

“If other people are cheating, it may serve me well to do the same,” said Mr. Piff. “That may be in the short term.” However, he was quick to add, “When groups start to upset the status quo by violating the norms, people become more and more alienated, cooperation decreases and the group disintegrates.”

To Eliot Spitzer, it’s a matter of making the penalties uncomfortable enough to prevent further lapses.

“What I struggle with now is that we have no effective remedies,” he told us. “You want to do something big and dramatic, but the draconian penalty is rarely seen as appropriate.”

In the absence of political will to take harsh actions against institutions or senior executives, he said, a broken-windows approach might work, policing the small-time infractions in hopes of beginning a systemic change. “Maybe it’s the guy on the trading floor who puts in an order for his favorite client because the guy took him to a Yankees game last night. Maybe it starts there.”

Jordan Thomas, head of Labaton Sucharow’s whistleblower practice, thought new whistleblower rules could help. “If people aren’t fearful, they stop thinking with their ethical self,” Mr. Thomas said. “Those people have more to fear, because of the whistleblowers and whistleblower lawsuits that are likely to come.”

“It’s never that hopeless,” Mr. Barofsky told us. “The people can speak up and compel politicians to break up the banks and break up the regulatory structure. “It may not happen until the next financial crisis hits,” he added. “By the way, I think the next one will be more devastating, because of some of the things we did the first time around.”

For his part, Mr. Barofsky has eschewed cheating. In the first chapter of Bailout, Mr. Barofsky goes to drinks with Herb Allison, a former chief operating officer of Merrill Lynch, at the time an advisor to the U.S. Treasury. The story goes that Mr. Allison warned Mr. Barofsky that trash-talking the administration over TARP was a sure way to ruin a career. It didn’t have to be that way: “Well, is it an appointment you might be looking for?” Mr. Barofsky says Mr. Allison asked. “Something else in government? A judgeship?”

Mr. Barofsky didn’t bite, and has settled for the less prestigious career path of law professor and book author. Not long ago, we noticed that Jonah Lehrer’s Imagine had popped up as No. 13 on the The New York Times bestseller list for the week of Aug. 12, though the work had been discredited. That burned, but there was a solace: Bailout was No. 9. So maybe there is hope for the honest man.

Then again, regulators announced last week that they were ending investigations into whether Goldman Sachs misled investors in a $1.3 billion mortgage deal without filing charges. Maybe Mr. Barofsky should have taken that judgeship.


Our Cheating Hearts: Honor, Integrity and Playing by the Rules are All Out of Style