Moral Hazard
Everybody loves to preach. People who live in glass houses love to throw stones at others. Either that, or the term “moral hazard” is impossibly hard to live up to in the world of finance. Wait, moral what? Put simply, it means if you take a chance with money, it may not pay off. You might lose money, you should know that and so don’t start crying and bawling if things don’t work. Steve Waldman tears into the EU for behaving as if they’d never heard of the concept when dealing with Greece: “Lending to a corrupt, client list Greek state that squanders resources on activities unlikely to yield growth from which the debt could be serviced? That is precisely, exactly, what the term “moral hazard” exists to discourage. You did that. Yes, the Greek state was an unworthy and sometimes unscrupulous debtor. Newsflash: The world is full of unworthy and unscrupulous entities willing to take your money and call the transaction a “loan”. It always will be.” Waldman’s right. But the sam