I always assumed everyone knew he wasn't psychic and just let it go with a wink and a nod because he was useful. I might just tell myself that because I couldn't stand watching a show where everyone is so stupid that they actually believe him. Also, it's right there in the theme song: "I know, you know, that I'm not…

@twitter-38498766:disqus I'm pretty sure Monk was a police officer before his wife's death. Then he went totally crazy. Then he recovered enough to be a private detective (I assume a properly licensed one), and eventually started consulting with the police in that capacity.