Monday, November 18, 2013

Moral Hazard: What our Ethics Commission is not understanding. By Geniusofdespair

Look at the beginning of this video of Anthony V. Alfieri an ethicist, from the University of Miami, talking to the Ethics Commission. Pay attention at about 22 is what our government is doing.

Here is an example:
Moral hazard is said to have been a significant cause of our current economic problems. The government has long displayed a willingness to step in and rescue businesses and institutions in financial distress. From the Chrysler bailout to the rescue of the Mexican government to Long Term Capital Management in 1998, investors have had reason to believe that, while they will be able to keep any gains from their risky investments, the government will step in to cover the losses.

As a result, large investment institutions took risks – or at least failed to exercise cautions – that they probably would have avoided if not for the government’s implicit promise to cover the downside risk. When the government actually allowed Lehman Brothers to fail in September of 2008, people who had invested in financial institutions expecting the government to protect their downside risks suddenly panicked. Faced with the prospect of suffering the true costs for foolish decisions, they suddenly wanted to put their money someplace else.


Anonymous said...

Is it true Centorino got his current job with the help of a former staff director of the Commission on Ethics, by the name of Meyers whom is now working with CH2M Hill clan?

Sounds like a legal/ethical conflict which should be pursued.

Anonymous said...

This is the every day reality of public officials feeding off the largess of the tax payer. Its not what you know, its who you know.

For all you short sided folks who think that commissioners do this for the good of the people for a measly salary, think again. If you want good people, pay them and then hold their feet to the fire when they misbehave. Most people can't afford to be commissioner. The corrupt ones know they can turn it into pay-dirt so they don't worry about it. Fix that and maybe you'd have some good competition for candidates.

As for the chain link fence thing, I think we just found another reason to incorporate. Perhaps we can overlay chain link fences on the campaign signs of those who voted for this stupid thing. I'd love to see that one photoshopped.