Trust tax

Let me drop back a couple of steps and include an important Covey concept. The concept is that of a trust tax. You can find it under the section "The Economics of Trust" on p. 13ff.

Coveys argues that decreasing trust acts as though it were a tax. He sees trust as an equation that links it to the speed of transactions and the cost of transactions. What it means is that when trust is diminished, the speed of transactions diminishes and the cost of transactions increases.

What this means is, when we don't trust other people, it makes business harder. It costs more and it's slower. In real estate, the washing out of trust burst the bubble. During the bubble we trusted too much, when the bubble burst we didn't trust enough. As the bubble expanded, more people bought, and sellers got more money for their homes. As we reached the breaking point, the surface of the bubble got more and more brittle until the economic crisis of 2008 burst it. When the bubble broke, trust went away.

Did you lose your trust in things when the bubble burst? The Great Recession is acting like a big tax increase.

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