This is a very nice line from American Beauty. I take this to mean that people will see what they want to see, usually wanting to believe the best out of people so they ignore things that are right in front of their face in order to keep their current world view intact.

My mom saw one of my cuts today. I was wearing baggy pants and stood up and my mom asks, "What's that on your stomach?" Chosen tactic: play dumb. "What are you talking about?" "Lift up your shirt." I did and looked down... "That's a really long cut, how did you get that?" "I have no idea!"...make some joke about Kimonade trying to kill me in my sleep and the subject is dropped.

This happened before when I was 16, wearing shorts in the car and my mom saw three cuts on my upper thigh. "Where did you get those?" "The dog scratched me at the table." "He didn't do that!" "Yes he did." Mom didn't buy it, but the subject was dropped.

My parents used to tell me that "parents know everything"...that if I think I'm hiding something, I'm delusional because they always know.

That may be the case. I really do think that she knows everything on the subconscious level, but won't let herself see it.
Denial.

I see this as a good thing however. In most cases, what a parent doesn't know can't hurt them, and they will always sleep in peace if they don't think too hard about what their angels are up to.

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