I broadly agree, except I think the greater moral hazard is in failing to prosecute the plain-as-day cases of fraud (regardless of size). I'm not arguing in fav

I broadly agree, except I think the greater moral hazard is in failing to prosecute the plain-as-day cases of fraud (regardless of size). I'm not arguing in favor of abandoning rules but given limited resources you have to prioritize somehow, and every prosecution strategy has significant externalities like those you touched on.