On Moral Hazard

Editor's note: all premium level pieces, whether investment, economics, news or opinion pieces, will now always be clearly marked as this one is.

This is a silver level post. The last piece I wrote on Ireland got an interesting response from a reader over at Seeking Alpha that I agree with. He commented:

I think a great part of the equation of not bailing out the institution has to do with making those people who were at fault responsible.

The reality is that never happens. Bob Nardelli, walks away from every business he nearly destroys with his pockets stuffed with millions.

They may be incompetent, they may be responsible, but they aren't stupid and they build themselves walls to protect them selves. We all saw the executives at Border's award themselves bonuses for ...


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