damned good question

from Corrente

So if we're socializing all the risk, why don't we socialize all the profit?

This is a big issue that demands more attention.

If a company is headed for collapse, and you do nothing, the company's collapse could take the entire economy down with it. (Think Great Depression - maybe even bigger. Maybe much bigger.)

So the government intervenes, bails out the company saves the company (or Mexico, or whatever).

The problem? Moral hazard. The all-important link between risks and rewards has been severed.

This has ramifications all down the line, but I'm interested in a very specific issue (one of many). This issue: we are teaching high-level execs to deliberately run their companies into the ground. They make more money than if they managed wisely and well, and the government ends up footing the bill.

We can gnash our teeth at them - bad! bad! - but the fact is, we are the ones setting up a situation where it is more rational to govern badly than it is to govern well.

This will continue to be a problem (of world-collapse-threatening proportions, even) if a movement does not rise up to demand that those who caused the collapse be held accountable.

Incidentally, I see this as very related to Bush & Co., who are doing the same thing with our nation. They are quite sure that, in the end, the victors get to write whatever they want and call that history - so why not rape the nation and split the profits? Someone will pay - but not them.

(Doesn't it just creep everyone out when you hear talk of Bush being "vindicated" by history?)