Yes, they talk about moral hazard as it supposedly relates to business, while ignoring the intra-business moral hazard. From wiki:

Moral hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. Moral hazard arises because an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to bear some responsibility for the consequences of those actions. For example, an individual with insurance against automobile theft may be less vigilant about locking his car, because the negative consequences of automobile theft are (partially) borne by the insurance company.

Moral hazard is related to asymmetric information, a situation in which one party in a transaction has more information than another. The party that is insulated from risk generally has more information about its actions and intentions than the party paying for the negative consequences of the risk. More broadly, moral hazard occurs when the party with more information about its actions or intentions has a tendency or incentive to behave inappropriately from the perspective of the party with less information.

A special case of moral hazard is called a principal-agent problem, where one party, called an agent, acts on behalf of another party, called the principal. The agent usually has more information about his actions or intentions than the principal does, because the principal usually cannot perfectly monitor the agent. The agent may have an incentive to act inappropriately (from the view of the principal) if the interests of the agent and the principal are not aligned.

There is a principal-agent problem in business. That is exactly what you are describing. So you do not disagree with the concept of moral hazard, but rather with the way in which the concept is being applied. Foundational criticism would have to go a bit deeper.

You also underestimate the awareness in ET of the current 'discussion' in the US on financial matters, we had a stream of diaries on that.

I don't think the concept of moral hazard is much debated in popular european debate unless one includes the tabloid rantings against "welfare scroungers" who avoid work because welfare payments allow them to survive without work, or single mothers who get pregnant to claim child allowances etc.

This sort of commentary is usually the preserve of right wing media or racist comments which imply that other people are not like "us" and abuse "our" generousity.  There may indeed be a legitimate area of debate - particularly in economic theory - but most people avoid the topic because of its racist, moralistic, class warfare or neo-liberal overtones.  

Most would start off on the basis that people have certain entitlements as of right, it's nobody else's business to question their motivations, or integrity; and that if the concept of moral hazard is to be applied at all, it should be applied to corporate entities which act to maximise their benefits for any given level of risk, and who would therefore be more likely to act irresponsibly in the absence of effective sanctions for so doing.

So I'm not surprised that few Europeans would engage with you on what might seem to them a morally dubious right wing agenda item insofar as it tends to be applied to those in need of social supports.  The issue of speculative investors being sheltered from the risks they have taken on would be viewed in a different light entirely.

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