moral hazard

September 23, 2019

Bailouts, moral hazards, and the scapegoating of the taxpayer

If pandering is the politicians’ pastime, then we owe a special debt of gratitude to those who resist this seemingly irresistible force. Today, UK Prime Minister Boris Johnson confirmed that he refused to extend a £150 million government bailout to prevent Thomas Cook, the world’s oldest travel agency, from going bankrupt. Continue Reading...

April 25, 2019

Moral hazard at the root of our student debt crisis

Student debt in the United States is currently over $1.5 trillion. Samuel Gregg has recently criticized Sen. Elizabeth Warren’s (D-MA) plan for student debt forgiveness as an answer to this crisis for ignoring the dangers of moral hazard. Continue Reading...

November 29, 2016

Financial deregulation expands opportunity

The Dodd-Frank Act became law in 2010, adding more regulation to a banking industry that was already heavily regulated. The main purpose of this 2,300 page act was to give consumers protection against big profit seeking banks but the unintended consequences prove to be much greater. Continue Reading...

March 05, 2014

Student loan update: ‘I’m from the government, and I’m here to entice you into debt slavery.’

The massive federal student loan program is creating a gargantuan higher education bubble and unsustainable levels of student loan debt, but at least all that borrowed money is going primarily to educate people, right? Continue Reading...

September 10, 2010

Samuel Gregg: Fiat Money and Public Debt

On Public Discourse, Acton Research Director Samuel Gregg looks at fiat money and how today it “represents the end of a long process of development whereby governments have used their power of legal tender to use money to pursue various policy goals.” Continue Reading...

November 19, 2009

The Financial Crisis: What We (Still) Haven’t Learned

It’s over a year now since the 2008 financial crisis spread havoc throughout the global economy. Dozens of books and articles have appeared to explain what went wrong. They identify culprits ranging from Wall Street financiers overleveraging assets, to ACORN lobbying policy-makers to lower mortgage standards, to politicians closely connected to government-sponsored enterprises such as Freddie Mac and Fannie Mae failing to exercise oversight of those agencies. Continue Reading...

September 16, 2009

Government-Managed Capitalism: A Love Story

Memo to documentary filmmaker Michael Moore: Free markets didn’t cause the financial crisis. The biggest culprits were government planners meddling with the market. That’s the message of Acton’s newest video short. Continue Reading...

June 18, 2008

Interventions target people, not robots

Shankar Vedantam on the problems of “social” governmental intervention, including increased moral hazard (HT: Arts and Letters Daily): While it seems like common sense to pump money into an economy that is pulling the bedcovers over its head, the problem with most social interventions is that they target not robots and machines but human beings — who regularly respond to interventions in contrarian, paradoxical and unpredictable ways. Continue Reading...