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There are 2nd order effects to consider, though. We've created a huge moral hazard in the financial markets by rewarding financially risky behavior and cementi
by spaced-out 7y ago
There are 2nd order effects to consider, though. We've created a huge moral hazard in the financial markets by rewarding financially risky behavior and cementing the idea that if a company gets large enough it's not allowed to fail.
Airlines spending every spare penny they had, and in some cases taking out debt, to gamble on the market and keeping nothing in the bank as a safety net is one such side-effect.
- philwelch 7y agoThe fact that Lehman Brothers, Bear Sterns, and Washington Mutual no longer exist somewhat refutes that narrative.
- spaced-out 7y agoThe people who ran those companies retired rich. Do you really think anyone going into business or finance looks at those people's careers as a cautionary tale? I know I'd trade my career for theirs in a heartbeat.