A profound disconnect between the business, government and media elites and ordinary wage and income earners might explain why trust in business is heading south, according to a new study.

It also has enormous political implications, something reflected in the mid-term elections which saw the Democrats sweep the Republicans from power.

And while the study focuses on the US, its findings would echo right around the world.



According to new research from the Washington-based Economic Policy Institute, the elites and ordinary people are simply talking different languages. The findings show that the conservative and liberal elites fail to speak about economic issues in a language that reflects and resonates with everyday people's experience and values. The result: it reinforces the sense of alienation that the economy's consumers feel from the elites. That's why ordinary people usually say that economists, the media and politicians don't know what they're talking about.

For a start, ordinary people believe that a close relationship between corporations and politicians that created, or at least stoked, a culture of greed. And that culture threatens the national economy and erodes the middle class.

The researchers found new forms of insecurity. It's still about jobs, but there's much more to the picture. People now worry about the offshoring of jobs, the conversion of permanent jobs into part-time or temporary positions, the erosion of health and retirement benefits, the lack of opportunities for career advancement in companies that have severely downsized, and the likelihood that, if they lose their current jobs, the only jobs available to them will pay less and offer fewer benefits.

They also see globalisation very differently from the elites. Yes, they like the idea of more trade, but not when it means losing their job. And their struggle to stay even, maybe get ahead, and just to provide for their futures are central to their own identities - and to their moral judgments on economic issues.

The researchers have another study showing that both the Right and the Left are out of touch. Conservative elites keep blathering on about economic growth in the face of rising costs, liberal elites seem to be obsessed about the middle class as helpless victims.

In that context, the massive pay packages for CEOs would not sit easily with most of the population. That, combined with the disconnect identified by the institute, would explain why people just don't trust business executives any more, something I examined here.

And because business is in the business of providing goods and services that society requires, that lack of trust is shaping up as a big problem for corporations.