Funny, we were just discussing that on another thread (one regarding Haditha). A contractor who has worked 18 months in Baghdad is quoted saying that the lying is so constant and pervasive, about everything, even among Iraqis he otherwise likes, that nothing can be done in a straightforward and honest way:
http://www.freerepublic.com/focus/f-news/1644199/posts?page=20#20
I do not know how I could live amongst people like that. I once experienced severe cognitive dissonance and frustration working for a lying, bullying boss and that was just one person in an otherwise mostly sane and mostly honest society.
We got plenty of those here. They're called liberals (even though they are as illiberal as they make 'em.)