Thursday, May 21, 2009

moral hazard

noun: the tendency of implied or guaranteed protection to lead an individual or organization to engage in riskier behavior than they would without the protection

the government has two options, to keep bailing out the banks, or to let them all go down so they learn their lesson. what if the latter option doesnt really exist? what if the loss of the government's help doesnt phase the banks? what if the banks think they can live without the government.. and yet the government needs the banks? then what is there to do but continue bailing them out?

when you keep forgiving people over and over again, what are the chances of them realizing how much pain they cause you?

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