I figure they have another name for moral hazard when it applies to the wealthy, to investment bankers and their money. It's called "good for the economy..." Fai de bèn a Bertrand, te lou rendra en cagant
The fallacy is that the "market" is not a person. It is an ever changing collection of people. Those who learn the lesson will not be those making the same mistakes in the future.
The way to prevent excess in the future is to incorporate the lessons learned into new regulation. That this effective can be seen in that the latest financial problems only occurred after the previous regulations were gutted by a succession of business-friendly administrations. The two biggest changes were the abandonment of anti-trust enforcement and the repeal of the Glass-Steagall act (which prohibited banks from owning investment services).
Once the restrictions were lifted, history repeated itself. Will "punishing" those responsible prevent future folly. No, but restoring regulation will. Policies not Politics ---- Daily Landscape
Those who learn the lesson will not be those making the same mistakes in the future.
