Destructive Chancellors and The British People: A Moral Hazard Made In Heaven?
Our elected officials’ role in destroying Britain must be scrutinized and punished.
Anyone who has seen Wall Street 2 will have some familiarity with the term — Moral Hazard.
It is a term which stalks the entire movie and one that has shaped our reality more than we care to imagine.
As much as I try these days to avoid running to Wikipedia for just anything, I find myself having to lean on the extraordinarily powerful tool to help explain things to a wide audience.
is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk knowing that its insurance will pay the associated costs. A moral hazard may occur where the actions of the risk-taking party change to the detriment of the cost-bearing party after a financial transaction has taken place.
Moral hazard can occur under a type of information asymmetry where the risk-taking party to a transaction knows more about its intentions than the party paying the consequences of the risk and has a tendency or incentive to take on too much risk from the perspective of the party with less information. One example is a…