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speedo 
Member since Feb 26, 2011


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Re: “Those overpaid state workers

No, co led, not exactly, and that's the problem with using academic terms out of academia. The "classic" principal-agent problem involves misalignment of the principal and agent's interests. It's a narrow little problem and, as the Wikipedia entry cited points out, it's addressed by commisions and other incentives positive and negative.

The logical extension of a carefree use of "moral hazard" is that every fiscal or financial decision in representative government, not just collective bargaining, carries moral hazard because it isn't the decider's money, it's yours and mine. That's too much freight for a fancy academic notion to carry.

Posted by speedo on 02/26/2011 at 11:14 AM

Re: “Those overpaid state workers

"Moral hazard" escaped the confines of pointy-headed ecnomics a couple of years ago during the financial crisis. In the context of credit-default-swaps and AIG bailouts the term may have had some informative value but, being catchy, it caught on and spread to places it does not belong.

"Moral hazard" is not a synonym for spending other peoples' money and it is quite a stretch to make it a substitute for a lack of personal responsibility. This psuedo-intellectual fad needs to stop and the term needs to be locked back up in the ivory tower where it can't do much harm.

Posted by speedo on 02/26/2011 at 10:36 AM

 

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