Polls show that Americans are punishing Democrats for the establishment insisting that Biden was healthy and capable for a second term:

A detailed report compiled by Democrats showing the president forecast to lose in an Electoral College landslide has sent alarm bells through the party’s leadership and led to renewed calls publicly and privately for the president to drop out. The data, which is based on thousands of voter surveys compiled by Democratic firm Blue Rose Research and viewed by The Wall Street Journal, shows Biden losing not only all the swing states, but also behind or even in New Hampshire, Minnesota, New Mexico, Virginia and Maine. It shows the president leading by only 2.9 percentage points in New Jersey. A major concern for Democrats up and down the ballot is the fact that half of voters, including 28% of those who backed Biden in 2020 and 52% of swing voters, think Democrats in office have been lying about the president’s mental fitness. The report says voters are likely to view Democrats’ defense of Biden as dishonest by a two-to-one margin. (emphasis mine).

Then we have the lies everybody knows are untruths–Biden campaign staff insisting that there is a pathway for Biden to win, and that he is not getting out of the race. We almost expect them to do this. BTW, is it a lie to say something that is untrue if everybody, both the speaker and the recipient, understand the truth and that what you’re saying is not true? Is there any attempt to deceive? But I digress.

The bigger issue is this. We expect politicians to lie about such things, because that is what they do. We don’t expect Senator Menedez to public repent of his avaricious sins. Why? Because in these areas, there is no incentive to tell the truth.

I often share this in my Money and Financial Markets class when thinking about Fed Chair statements. Ben Bernanke repeatedly and steadfastly said the subprime mortgage crisis was contained. As the economy sank in 2007-2009, every step of the way he assured us this was under control. Why? Because as Jack Nicholson reminds us above, we can’t handle the truth. In his memoir, Bernanke said “we stood at the edge of the abyss.” But that was never his public stance. He always put on the bold face. Imagine if instead he had said, “This is quickly careening out of control. We’re holding emergency meetings and making it up as we go along, but I have no clue how far the economy will drop.” That would have been true, but what do you think the financial markets, already in freefall, would have done? You simply cannot expect him to give a negative assessment in a crisis.

The same goes for a campaign staff. Right now Mr. Biden is in the race. For the campaign staff to state the truth would effectively end the race. Who on earth would expect them to be honest?

Now let’s contrast that with the free market. If a CEO gives a quarterly earnings call and deceitfully denies known bad news, what’s going to happen? There will be a massive class-action lawsuit and some unfriendly conversations with the SEC. It is highly likely that he or she would subsequently lose their job. Private market participants are just as fallen image bearers as so-called public servants, but they have completely different incentives.