News: Moral Hazard

Christians should be preoccupied with the plight of the marginalized and the remediation of social injustice. But when people seek to influence voluntary interactions using involuntary power structures, a vast array of unintended consequences, moral hazard, and artifacts of force will result, making truly voluntary structures wholly preferable.

Wall Street is celebrating the passage, as the financial reform bill now guarantees the extension of the concept "too big to fail". Moral hazard has finally been legislated out of existence.

Does anybody have a real emergency plan? Something that will help our communities ride out this storm before they are rendered virtual ghost towns? Or will we keep engaging in the most hazardous moral around, allowing banks to call the shots? The Right to Rent Act would stop this cycle immediately.

Today, the taxpayer-owned behemoth said that it would “lockout” strategic defaulters for seven years and sue them for any deficiency. Let’s be clear: Fannie Mae doesn’t really care about any individual borrower’s deficiency amount or the moral hazard of lending to them again. This threat was meant to scare homeowners and limit future defaults.

If there is to be any earnest discussion on the topic of individual freedom, it seems it must of a necessity include discussion of individual culpability, as well. Yet calls to drastically rethink regulations governing corporate legal structures are strikingly absent from "mainstream" libertarian dialogue. Article by Joshua Pelton-Stroud

Financial Times editor and author John Authers says moral hazard, easy money and self-interested fund managers are still at work undermining the stability of financial markets that most investors still take for granted.

The Icesave dispute from 2008 has a lot in common with the Greek bailout of 2010. Both basically boil down to a conflict between maintaining stability and avoiding moral hazards.

Greece represents a perverse aspiration -- a society with (in the words of Wisconsin Republican Rep. Paul Ryan) "more takers than makers," more people taking benefits from government than there are people making goods and services that produce the social surplus that funds government. Europe has become the world's leading producer of "moral hazard"