{"id":83820,"date":"2009-12-15T17:24:55","date_gmt":"2009-12-15T22:24:55","guid":{"rendered":"http:\/\/seattletimes.nwsource.com\/html\/northwestvoices\/2010515849_davidsirotaarealmoralhazard.html?syndication=rss"},"modified":"2009-12-15T17:24:55","modified_gmt":"2009-12-15T22:24:55","slug":"david-sirota-a-real-moral-hazard","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/83820","title":{"rendered":"David Sirota: a real moral hazard"},"content":{"rendered":"<p><strong>Wall Street bailout: the lesser of evils?<\/strong><\/p>\n<p>It appears David Sirota has misinterpreted what economists mean by moral hazard [\u201cFed Chairman Ben Bernanke: the mother of all moral hazards,\u201d Opinion, syndicated column, Dec. 14]. Moral hazard exists when one is motivated to behave in a way that is contra to what is best.<\/p>\n<p>For example, the Wall Street bankers were rewarded to take excess risk because it meant that their individual bonus for the year would be greater and that any fallout from the excess risk for the bank would not be felt for years into the future. Just because one makes an error in judgment does not mean that a moral hazard exists.<\/p>\n<p>Sirota suggests that by rewarding Ben Bernanke by renominating him represents a moral hazard because he has admitted to an error in judgment. That is not a moral hazard as seen by economists.<\/p>\n<p>Politics are also involved here. It may have been politically impossible for the Federal Reserve to have done more at the time.<\/p>\n<p>The bailout of Wall Street was not done to reward Wall Street for the errors of its ways. Rather, it was the lesser of evils. Should one allow the entire financial system to collapse to simply punish Wall Street? No, instead, we should change the rules so that in the future the current moral hazard is no longer present.<\/p>\n<p><em>\u2014 Larry Hegstad, Tacoma<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Wall Street bailout: the lesser of evils? It appears David Sirota has misinterpreted what economists mean by moral hazard [\u201cFed Chairman Ben Bernanke: the mother of all moral hazards,\u201d Opinion, syndicated column, Dec. 14]. Moral hazard exists when one is motivated to behave in a way that is contra to what is best. For example, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-83820","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/83820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=83820"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/83820\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=83820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=83820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=83820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}