moral hazard - Gawker

posts about #moralhazard more →
The Only Thing We Have to Fear is the Fear of 'Moral Hazard'

Your version of Internet Explorer is not supported. Please upgrade to the most recent version in order to view comments.

Dsmvwl Admin Promote to frontpage Approve user Ban user ×

Uncle_Billy_Slumming
02/24/09

In reply to The Only Thing We Have to Fear is the Fear of 'Moral Hazard'
The concept of moral hazard originated in the insurance industry. Two of the biggest villains in this whole mess are the insurance industries (of all flavors) and the ratings agencies. Look at the big fish in these areas, and their friends, and you will find the ultimate scumbags.

Don't need to waste breath on a televised stock exchange weasel who has been enabling the whole charade.
Reply

flossy
02/24/09

In reply to The Only Thing We Have to Fear is the Fear of 'Moral Hazard'
This reminds me of the massive uproar from the punditry at the beginning of the "war on terror" over our morally hazardous use of torture as an intelligence-gathering technique. Oh wait.
Reply

flossy was starred flossy was unstarred

Mediahohoho
02/24/09

In reply to The Only Thing We Have to Fear is the Fear of 'Moral Hazard'
Of course, if all of your neighbors goes into foreclosure, you're fucked anyway. At a certain point, like everything else, this becomes a lot less about morality and a lot more about self-preservation.
Reply

Mediahohoho was starred Mediahohoho was unstarred

dado
02/24/09

@Mediahohoho: Rarely does one camp upon the moral high ground without there being a pot of gold underneath it.
Reply

dado was starred dado was unstarred

dado
02/24/09

In reply to The Only Thing We Have to Fear is the Fear of 'Moral Hazard'
What people have a problem with is that responsible homeowners are being asked to lower their standard of living via more tax dollars paid to bail out irresponsible home owners. Is that fair? No. Is it immoral? No. So jabber on with a new cloak of pseudo erudition.
Reply

dado was starred dado was unstarred

DahlELama
02/24/09

@dado: You don't see any trace of immorality in asking for money to fix your screwups from people who've busted their asses to budget properly and make responsible decisions?
Reply

DahlELama was starred DahlELama was unstarred

dado
02/24/09

@DahlELama: Morality versus fairness...I guess since moral codes vary amongst certain dogmas we'd have to limit it to say Judeo Christian tenets, where loving they neighbor as thyself means open up your wallet.
Reply

dado was starred dado was unstarred

DahlELama
02/24/09

@dado: Fair enough, although I've always thought of the implication of "neighbor" being someone with which I'm familiar. It's a lot tougher to open your wallet to the random guy who just haaaad to have the big TV, or worse, to freakin Dick Fuld.

But maybe that's why I'm not a priest or rabbi.
Reply

DahlELama was starred DahlELama was unstarred

dado
02/24/09

@DahlELama: I just wanted to use dogma and tenet in the same post.
Reply

dado was starred dado was unstarred

Preopsician
02/24/09

In reply to The Only Thing We Have to Fear is the Fear of 'Moral Hazard'
Re: "If one defines "moral hazard" as the encouragement of risks one would not otherwise take, then "moral hazard" sounds like exactly what we need."

Sounds like it, but that definition is incomplete. Moral hazard encourages risks because there is no risk of loss; heads you win, tails you win, but with tails, someone has to pay for your win. Anybody wants to play that game--and will. There are other ways to encourage risk that preserve actual risk. Lower capital gains costs, for example. Change accounting rules that require institutions to price assets as if they were going to sell them all today.
Reply

Preopsician was starred Preopsician was unstarred

hypocriteoath
02/24/09

@Preopsician: your last point is pure lunacy. Accounting is based off of what you have, what you owe and what you know... not what you project an asset's value to someday be. If it has known returns then those will show in following years budget projections. It is just another way to make $100 look like $1000 and will make the next bubble even bigger.
Reply

hypocriteoath was starred hypocriteoath was unstarred

Andrew Lewis
02/24/09

@hypocriteoath:

Well, not EXACTLY. I'm all for cut and dry measures of performance and all that, but a lot of investments really fluctuate in value, and as such you need to be able to present a statement of value for a singular moment in time (be it monthly, quarterly, or annually).

It's a hot topic in the accounting field, and mark to market really is the scourge of the sinking-ship CEO, who always blame their financial situation on SEC and FASB guidelines.
Reply

Andrew Lewis was starred Andrew Lewis was unstarred

Uncle_Billy_Slumming
02/24/09

@Andrew Lewis:

This argument seems to assume that we need credit and investing and to bother ourselves with the details of taxes. Can't seem to get out of this mindset, can we.
Reply

PinkPundit
02/24/09

In reply to The Only Thing We Have to Fear is the Fear of 'Moral Hazard'
Some context for Keynes's famous quote about the long run. He was arguing against the Santellis of his day who thought that unemployment would take care of itself in the long run: "But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again."

[econ161.berkeley.edu]
Reply

PinkPundit was starred PinkPundit was unstarred

Baroness
02/24/09

@PinkPundit: I never take Kanye's pronouncements seriously. No, I won't wear those ridiculous sunglasses, thanks.
Reply

Baroness was starred Baroness was unstarred

Mediahohoho
02/24/09

In reply to The Only Thing We Have to Fear is the Fear of 'Moral Hazard'
It is incredibly important to heed the moral obligations of consumers to entities that are currently charging 20% and more over prime for credit cards and student loans. Banks: your new moral authorities.
Reply

Mediahohoho was starred Mediahohoho was unstarred

Trulymadlyme
02/24/09

In reply to The Only Thing We Have to Fear is the Fear of 'Moral Hazard'
Wow. Did the University of Chicago take over gawker?
Reply

Trulymadlyme was starred Trulymadlyme was unstarred

Earlier discussions Other discussions Show all discussions Show featured discussions only Start a new discussion

#moralhazard

Gawker

SUBSCRIBE TO Gawker

The Only Thing We Have to Fear is the Fear of 'Moral Hazard'

Login

Reset Password

Register

Submit Your Comment