Showing posts with label moral hazard. Show all posts
Showing posts with label moral hazard. Show all posts

Thursday, July 26, 2012

Something we should think about - Does our technology destroy our humanity?

In a recent article entitled The Moral Hazard of Drones  in the New York Times John Kaag and Sarah Kreps raise a very critical question about our relationship with our technology. They state, "

Saturday, June 19, 2010

Are Memes dangerous to humans?

Memes are those meaningful elements found in the members of a superorganic entity. They act like genes do in an organic entity to determine what the individual will look like and how they will act. Memes can be beneficial such "altruism" or they can be deleterious such as "suicidal".

In the current Deep Water Horizon disaster, where lives have been lost, careers and businesses ruined, the environment and way of life of the Gulf Coast threaten with permanent lose, we find that there is a meme which causes its infected host to be blind to the meaning and impact of the situation.

Here is an example of a politician infected by the meme "corporate capitalism." Ask yourself. "Is this politician's meme infection dangerous to the health and welfare of human beings and nature?" Or "Is it an example of a predatory parasitic meme blinding a good descent human being to the reality of his position?"




We can see from Rep. Joe Barton's statement that the "corporate capitalism" meme has lead to a misappropriate application of the "shakedown" meme in his speech. This lead to a behavioral reaction -- that of applying the "apology" meme inappropriately. The "apology" meme is normally applied by the guilty party to ask for forgiveness from the harmed party. In this case, Rep. Barton displays a pathological misunderstanding of the "apology" meme as it applies to this situation. This is evidence of how memes can be dangerous to human beings.

Tuesday, September 22, 2009

TOO BIG TO FAIL: Systematic Pragmatism or Moral Hazard

The Economic crisis of 2008-2009 is summarized in the PBS program, Frontline's February 17, 2009 "Inside the Meltdown". This crisis threatened to bring down the American and global economy and lead to the popularization of the phrase "Too big to fail."

"Too big to fail" means that a superorganic entity, "Corporation," is so complex and so intertwined with the other elements that make up the many levels of the superorganic entity known as the "Nation", that the failure of the former could result in the fatal failure or death of the latter.

As the Frontline report makes clear -- when it comes to the superorganic, human moral principles come up against the question of systematic pragmatism. When the survival of the whole depends upon the survival of the one critical part that is TOO BIG TO FAIL, then how do we, as individuals, justify and come to an accommodation with the paradox of personal responsibility vs the greater good?

The questions it raises for us are two-fold:

Should the greed and selfishness which fostered the systematic breakdown of Wall Street's investment banks be punished by letting the individual and institutional immorality be punished by letting them fail regardless of the collateral damage to the nation's financial system? (Moral Hazard)

Or, Should those responsibility for safe guarding the United States' financial system as a whole, step forward and take over the failed system, and, in effect, reward greed and stupidity in order to mitigate the collateral damage and to save the system? (Systematic Pragmatism)

As we come out of the depths of the crisis, it is time to take stock.

Here is the paradox we now face, what was TOO BIG TO FAIL, is today MUCH TOO BIG TO FAIL.

For example: As part of the Bush/Obama solution to the crisis -- big investment banks that failed have been allowed to fail in the case of Lehman Brothers, or forced to merge with stronger ones, i.e. J.P. Morgan/Bear Sterns and Bank of American/Merrill-Lynch. In either case, where there were 5; now there are 2.

Financial innovation such a credit default swaps are sold with no regard to the "product liability" concerns that innovators in other sectors of the economy are held to. Should there be an FDA or CPSC to oversee the manufacture and marketing of "toxic" assets. Should the stock analyst be held accountable for false advertising? Where are the trial lawyers and regulators?

Should the fund managers for the nation's retirement funds, the major investors in Wall Street, be held accountable for their failure as fiduciary agents to safe guard the long term interests of their clients. Should there be special rules for fiduciary capitalism to distinguish it from entrepreneurial capitalism?

Do the survivors of the crisis represent a healthy new heart for our financial system or are they part of the same cancer in the system?

Are the moral ideals of a "free market" and "capitalistic political system" still philosophically valid principles for government today in a global, instantaneous economy where private corporations are free to move assets anywhere at any time without any responsibility to anyone for the consequences?

If governments are the courts and banks of last resort for their people (citizens), can a republican democracy limit their exposure to financial failure while maintaining a principle of moral hazard applicable to its citizens and institutions equally?

Or, Does a systematic pragmatism require a redefinition of the principles of republican democracy and a formal differentiation in the role of government toward different segments of its citizens?

Should any corporation be allowed to become TOO BIG TO FAIL?

These are the questions the American people and their representatives must address in the remaining months of 2009 and will answer in the election of 2010.