1) Economic Pressures: Scarcity Thinking Becomes the Default

Inflation’s residue and cost-of-living spikes (housing, insurance, utilities) have stretched household and business budgets. In real estate, insurance costs have become a chronic stressor in catastrophe-exposed states. In 2024, State Farm nonrenewed tens of thousands of property policies in California and exited commercial apartment policies, citing inflation, catastrophe exposure, and reinsurance costs—pushing owners and lenders into adversarial renegotiations over coverage, deductibles, and covenants.¹ Meanwhile, housing affordability has deteriorated; in multiple months of 2024, the NAR Housing Affordability Index sat below 100, meaning a median-income family cannot afford the median-priced home.² (See Figure 2.)

Trust consequence: When survival feels at stake, cooperation looks risky, and zero-sum instincts rise.

2) Technology: Polarization and Job Anxiety

Social platforms amplify outrage and tribal affiliation. Even landmark experiments on Facebook/Instagram during the 2020 U.S. election showed that de-ranking like-minded sources reduced exposure to low-quality content but did not measurably reduce polarization—indicating that platforms reflect and amplify deeper social rifts rather than single-handedly causing them.³

At the same time, AI threatens role boundaries. OECD and IMF analyses reveal high AI exposure in advanced economies, with uneven impacts across education and age, fueling status anxiety and defensive behaviors at work.⁴

Trust consequence: Information ecosystems reward performative conflict while workplace automation provokes status protection, both of which undermine collaboration.

3) Institutional Breakdown: When Referees Lose Credibility

Public trust in the U.S. government remains near historic lows (22% in May 2024 say they trust the federal government “just about always/most of the time”), a long slide since the late 1960s.⁵ Trust in news has fallen as well; Reuters Institute’s Digital News Report 2024 documents growing news avoidance and lower trust across countries.⁶ (See Figure 1 for the long-run trust trend.)

Trust consequence: If people don’t trust the referees, they won’t trust the other team—or the score. Cooperation requires both.

4) Bureaucracy and Red Tape: Cooperation by Attrition

Complex, slow, and unpredictable processes turn stakeholders into litigants. The OECD’s Product Market Regulation indicators show persistent barriers to entry and burdensome licensing in many economies.⁷ In California, the Assembly Select Committee on Permitting Reform (Final Report, Mar 4, 2025) labels the process “time-consuming, opaque, confusing” and calls for streamlining entitlement, focusing CEQA review, and reducing post-entitlement uncertainty.⁸

Trust consequence: When timelines and rules are opaque, parties default to defensive legalism, not handshake problem-solving.

5) Cultural Fragmentation: Thinner Social Capital, Touchier Speech Climate

Religious and civic participation have declined for decades; U.S. membership in houses of worship dropped below 50% for the first time in 2020.⁹ The U.S. Surgeon General (2023) warns loneliness and isolation are now a public‑health risk, degrading resilience and civic trust.¹⁰ Campus and workplace speech climates push many toward self-censorship, eroding the open exchange essential to cooperative problem‑solving.¹¹

Trust consequence: With fewer cross-cutting ties, we signal identity rather than build bridges.

6) Crisis Fatigue: Disasters Normalize Risk Aversion

The Swiss Re sigma 1/2024 report shows five consecutive years of $100B+ global insured catastrophe losses, driven by event frequency and asset concentration; 2023 losses were ~$108B (inflation-adjusted).¹² Reinsurance markets hardened in 2023 and stabilized at higher levels in 2024—still with tighter terms and retentions.¹³

Trust consequence: Higher volatility premiums and deductibles lead to fortress balance sheets, thicker contracts, and less flexibility—the enemies of trust.

7) Entitlement Conscientiousness: Rights Without Duties Break Cooperation

Entitlement conscientiousness is the willingness to match rights with responsibilities. Cooperation is a reciprocal game: I respect your rights because I can rely on you to meet your obligations. When entitlement rises without conscientiousness, cooperation collapses.

• HOAs & building safety: Owners who demand full amenities but resist reserve funding or inspection/compliance (e.g., SB‑326/SB‑721 balcony and exterior inspections in California) push risks onto neighbors—undermining collective safety and inviting special assessments and legal conflict.
• Borrower–lender relations: Borrowers who want maximum leverage and minimum covenants while resisting adequate property insurance effectively shift tail risk to lenders and communities—fuel for litigation when losses hit.
• Public finance: Voters demanding services but opposing taxes/reforms produce fiscal gridlock—costs rise, projects stall, and cynicism deepens.

Cultural amplifiers: social media popularizes rights language and grievance narratives but rarely showcases duty‑fulfillment. In a low-trust world, reputational self-defense (and “calling out”) outcompetes contribution and compromise.

What restores cooperation: Reframe entitlement as stewardship. Rights are durable when paired with visible, measurable commitments—funding reserves, meeting inspection schedules, carrying appropriate insurance, and honoring covenants. That predictability lowers transaction costs and rebuilds trust.

8.  The Feedback Loop (Why It Feels So Stubborn)

Costs rise → platforms amplify division → trust in referees falls → processes bog down → social capital thins → crises hit again → everyone gets more defensive. Without entitlement conscientiousness—rights paired with responsibilities—the loop accelerates.

9.  What Now (Practical Moves That Work in the Real World)

• Pre-commit to transparency. In lending and HOA governance, publish reserve studies, inspection calendars, insurance benchmarks, and capital plans. Pre-commitment reduces suspicion and gives everyone something objective to cooperate around.
• Engineer cooperation into contracts. Tie borrower flexibility (e.g., cure rights, extension options) to risk‑management behaviors (timely insurance renewal, inspection compliance, mitigation measures).
• Streamline the process. Where possible, parallel‑path reviews, hold pre-filing meetings, and document mitigations to narrow CEQA risk. Push for the permitting reforms your projects actually need (checklists, timelines, “deemed complete” standards).
• Innovate in risk‑sharing. Build layered insurance and multi-year strategies to smooth premium shocks; consider captives or parametric solutions where appropriate.
• Rebuild social capital. Internally, teams reward mitigation and collaboration, not just deal volume. Externally, create standing roundtables (owners–lenders–insurers–AHJs) to solve common bottlenecks once, then repeat.

Figures

Figure 1. Public Trust in U.S. Government (1960–2024)
Long-run decline in the share of Americans who say they trust the federal government “just about always” or “most of the time.”

*Sources: Pew Research Center trend summaries; Gallup and allied series.*⁵

Figure 2. U.S. Housing Affordability Index (2000–2024)
Affordability index where 100 = the median‑income household can afford the median‑priced home; values below 100 indicate unaffordability.

*Sources: NAR Housing Affordability Index; Atlanta Fed HOAM.*²

Note: Use your preferred authoritative data series for final publication; the figures above are provided to illustrate the trend lines and layout. If you’d like, I can replace these with official series pulls (NAR, Atlanta Fed HOAM, Pew/Gallup trend), matching exact values and dates.

Sources

• State Farm (Mar 20, 2024): CA nonrenewal and exit from commercial apartments; drivers include inflation, catastrophe exposure, and reinsurance costs.
  https://newsroom.statefarm.com/update-on-california/
• Housing Affordability (2024): NAR Economist’s Outlook (June 17, 2024); Atlanta Fed HOAM overview.
  https://www.nar.realtor/blogs/economists-outlook/mortgage-rates-and-higher-home-prices-continue-to-hinder-affordability-in-april-2024
  https://www.atlantafed.org/research/data-and-tools/home-ownership-affordability-monitor
• Social media & Polarization (2023): Nature/Science papers on Facebook/Instagram experiments; News & Views summary.
  https://www.nature.com/articles/d41586-023-02325-x
• AI & Labor (2023–2024): OECD Employment Outlook 2023 (AI chapter); IMF (2024) working paper on AI exposure and occupational mobility.
  https://www.oecd.org/en/publications/oecd-employment-outlook-2023_08785bba-en/full-report/artificial-intelligence-job-quality-and-inclusiveness_a713d0ad.html
  https://www.imf.org/en/Publications/WP/Issues/2024/06/07/Exposure-to-Artificial-Intelligence-and-Occupational-Mobility-A-Cross-Country-Analysis-549989
• Trust in Government (2024): Pew Research Center, Public Trust in Government: 1958–2024.
  https://www.pewresearch.org/politics/2024/06/24/public-trust-in-government-1958-2024/
• Trust in News (2024): Reuters Institute, Digital News Report 2024.
  https://reutersinstitute.politics.ox.ac.uk/digital-news-report/2024
• Regulatory Friction (2023/24): OECD Product Market Regulation Indicators.
  https://www.oecd.org/en/topics/product-market-regulation.html
• California Permitting (2025): Assembly Select Committee on Permitting Reform, Final Report (press page with PDF).
  https://a14.asmdc.org/press-releases/20250304-final-report-select-committee-permitting-reform
• Civic/Religious Participation: Gallup series on church membership below 50%.
  https://www.forbes.com/sites/roberthart/2021/03/29/poll-american-church-membership-drops-below-50-for-first-time/
• Loneliness & Social Connection (2023): U.S. Surgeon General’s Advisory.
  https://www.hhs.gov/sites/default/files/surgeon-general-social-connection-advisory.pdf
• Speech Climate: FIRE 2024 College Free Speech Rankings; Knight Foundation/Ipsos College Student Views on Free Expression and Campus Speech 2024.
  https://www.thefire.org/research-learn/2024-college-free-speech-rankings
  https://knightfoundation.org/reports/college-student-views-on-free-expression-and-campus-speech-2024/
• Catastrophe Losses: Swiss Re Institute, sigma 1/2024: Natural catastrophes in 2023.
  https://www.swissre.com/institute/research/sigma-research/sigma-2024-01.html
• Reinsurance Market: Howden, Renewal Report 1.1.2024: A New World.
  https://www.howdengroupholdings.com/news/howden-a-new-world-2024