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Political Moral Hazard

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Posted on Dec 10, 2009

By David Sirota

Washington’s favorite term these days is moral hazard. Though this buzzphrase may seem like a complex and even intimidating idea, most of us, whether consciously or not, understand the principle because it’s basic common sense.

Applaud your kid for punching another kid—rather than grounding him—and you’ve created a moral hazard that means he’ll probably punch other kids in the future. Give your dog a treat—rather than a scolding—after it urinates in the house, and the moral hazard you’ve engineered makes it likely you’ll soon be cleaning up even more sallow stains on your rug. In short, without consequences—or worse, with rewards—for wrongdoing, there is an incentive to do wrong. That’s moral hazard.

To date, the national discussion about this concept has revolved specifically around financial moral hazard. And, as evidenced by trillions of dollars in public loans, guarantees and subsidies given to speculators to cover their massive losses, leaders in both political parties have no interest in preventing financial moral hazard—despite stern press releases to the contrary. By rewarding rather than punishing Wall Street for losing irresponsibly risky bets and by holding out the promise of similar bailout rewards in the future, politicians have incentivized even more irresponsible risk-taking for years to come.

But financial moral hazard is only half the story. The other half is political moral hazard—the mother of all other moral hazards.

Consider, for instance, Federal Reserve Chairman Ben Bernanke. He’s the top regulator who not only sowed financial moral hazard with the Fed’s post-meltdown bailouts, but openly admits that as the crisis developed, his Federal Reserve “should have done more—we should have required more capital, more liquidity [and] we should have required tougher risk management controls.”

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Firing Bernanke would tell other regulators that there are consequences for negligence. Instead, President Barack Obama rewarded Bernanke with renomination and thus manufactured a pernicious problem. As economist Dean Baker says, just as bailouts create a financial moral hazard giving speculators no incentive to avoid excessive risk, Bernanke’s renomination creates a political moral hazard whereby regulators “will not have an incentive to do their jobs properly [because] there are no consequences” for failure.

The Democratic Congress, of course, could reject Bernanke’s nomination for being “the definition of moral hazard,” as Sen. Jim Bunning, R-Ky., correctly noted. But that seems unlikely, considering how many Democrats have been aggressively embracing moral hazard.

When Senate Democrats ratified Obama’s nomination of New York Fed chief Tim Geithner as treasury secretary, they rewarded yet another shill who also fell down on the regulatory job. When those same Senate Democrats considered the nomination of Gary Gensler to head the agency regulating derivatives, they could have rejected him for championing derivatives deregulation as a Clinton official and then cashing in as a Goldman Sachs executive. Instead, Democrats backed his nomination and effectively told every other Gary Gensler-like parasite that misguided actions and corruption don’t prevent future promotion.

And let’s be fair—it’s not just Democratic politicians who are creating political moral hazard. Many Democratic pundits, activists and voters continued cheering on President Obama while he stuffed his administration full of Wall Streeters—and many of these rank-and-file voices attacked as disloyal those progressives who raised questions. That told Obama he faces few consequences—and even defense—from his own base for promoting those who engineered the economic meltdown.

The only open question is whether the public at large becomes complicit, too. Come Election Day, if there are no consequences at the ballot box for the politicians—Democrat or Republican—who legislated bailouts, supported these appointments and are now working to undermine proposed Wall Street reforms, then America will have created the biggest moral hazard of all.

David Sirota is the author of the best-selling books “Hostile Takeover” and “The Uprising.” He hosts the morning show on AM760 in Colorado and blogs at OpenLeft.com. E-mail him at ds@davidsirota.com.

© 2009 Creators.com


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By Cole..., December 16, 2009 at 10:27 am Link to this comment
(Unregistered commenter)

I kind of liked the ‘sarcasm’ and the sillier the better.
If you think we have gone 8 years of bush where good decision making was the rule, then we have to redefine ‘good’. For sure the crap decisions made and effected were done with great dispatch and efficiently, for 8 long years. Start with 1.6 trillion dollars of surplus as far as the eye could see—but never materialized—efficiently pared by a cooperative Congress to 1.3 trillion and passed. Move on to 911 for a lesson in how to galvenize the Repug govt with its Demo enablers into some action head off or to contain or to do anything but go fishing. And not to mention Katrena, and those who recognize that we have an elected body of the twadry, so if we cannot toss them out we can at least take some joy in sarcasm.

The answer, for me, if there is one is to conclude that they are already overpaid—- work load of 100 days a year, lots of benefits, wow! no wonder why my neighbor wants that job, and they don’t need any experience or knowlege to get it—-and cut their pay to a level where Government Service is actual service.

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By ardee, December 16, 2009 at 3:47 am Link to this comment

mike112769, December 15 at 10:18 am #

OF course! Why didn’t I think of that? Since our politicians have done such a great job screwing this country, let’s leave the ones that are best at screwing us in office! Brilliant!

Sarcasm and silliness is not a substitute for addressing the real issue. In reality experience is valued and sought after, and continually throwing away the most experienced folks is a guarantee of poor decision making and inefficiencies. Further such practice actually gives power to those outside of government, and I do not mean the electorate.

But then, I expect more sarcasm and frustration from you rather than clear and honest reasons for your position.

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By ardee, December 16, 2009 at 3:43 am Link to this comment

scotttpot, December 16 at 3:34 am

Your suggestion that we simply throw money at a problem is a problem.

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By scotttpot, December 15, 2009 at 11:34 pm Link to this comment

Our elected representatives make less than the mail clerks at Goldman.
Their pay is Crap compared to a lobbyist. President Barack Obama,“The Most
Powerful Man in The World” is paid $400,000 per Year. A top CEO makes that
much in Two Weeks. A top CEO who makes millions thru exploitation is a target
of no daily barbs , death threats ,or Hitler mustaches superimposed on his face.
I suggest we Raise the pay of our Elected representatives so that they are less
tempted in Washington of treats and goodies from lobbyists.
We are not going to get or keep talented public servants if the private sector can buy and silence all the top talent .Didn*T Robert Rubin from Citi Group make 100 times what our president gets paid ?

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By Caro, December 15, 2009 at 5:52 pm Link to this comment

>>f the avenue to riches was taken away what then?

Then they’ll be in exactly the same position as elected
officials in every other industrialized country. They
don’t have nearly the amount of corruption we have.

Carolyn Kay
MakeThemAccountable.com

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By Cole..., December 15, 2009 at 11:07 am Link to this comment
(Unregistered commenter)

Caro
“....take the greed out of the process….”
“Get the greed out”
What? you want to take the bulk of the incentive way?

We have a Congressional bunch that does not read the issues it votes on now. If the avenue to riches was taken away what then? Sounds great, but no guarantee that the only the ‘good’ would run for office, avoid the partygoing in D.C. and, of course not meet in the middle of the night to vote themselves perpetual raises.

Not that I have a better answer—other than hurry up and develop that robot with built in intellegence and appoint the shiny ones to office. But be sure none are painted, ony raw metal need apply.

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By Caro, December 15, 2009 at 7:02 am Link to this comment

>>let’s leave the ones that are best at screwing us in
office

No, if we take the money out of the process, only
people interested in doing something for the country
will stay in office.

Get the greed out!

Carolyn Kay
MakeThemAccountable.com

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By mike112769, December 15, 2009 at 6:18 am Link to this comment

OF course! Why didn’t I think of that? Since our politicians have done such a great job screwing this country, let’s leave the ones that are best at screwing us in office! Brilliant!

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By ardee, December 14, 2009 at 2:20 pm Link to this comment

mike112769, December 14 at 4:23 pm #


Caro and Ardee: Throw out the most experienced politicians? Yes, we should.

Forgive me if I again say nay.

When a politician gets entrenched in office he no longer gives a damn about anything but his wallet. This has been proven by their voting records. Research where their funding comes from and compare that to their voting records.

You conflate two differing points here, in my opinion.
‘Yes the money necessary to wage a successful campaign means that the largest donors control a politicos voting record

and no, there are politicos who have stuck to their liberal guns through more than two terms in office. I say let the voter decide how long his or her representative shall serve. But let us do away with the power of money by making the election process free. That way we do not lose the most experienced, allowing, as Caro notes, the bureaucrat to flourish.

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By Cole..., December 14, 2009 at 1:24 pm Link to this comment
(Unregistered commenter)

There is really no great answer to this ‘voting/election’ thing.
Ihave two neighbors, one on each side, one is a bozo, one is a class act—one knows what the issues are, one does not—one seems bright, one seems to have the intellect of the doornob. etc etc etc.

Either could decide to run for office, either could actually win.

That’s the problem—-someone’s neighbor fits those discriptions and is nominated and elected. And we are stuck with a bozo/bright mix and all the crap they carry with them. Worse, the winner automatically give themselves a additional 100-4000 I.Q. points and/or becomes the appointee of God.
As far as I can determine the office holder, all of them,  rates the same as my neighbor—both of whom are not as smart as I. And I am ‘stupid’.

Solution: kick ‘em out and kick ‘em out often. And while they are in, mandate that they disclose their financial report yearly so if there net value is increasing at an unacceptable level they can be kicked out more often.

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By mike112769, December 14, 2009 at 12:23 pm Link to this comment

Caro and Ardee: Throw out the most experienced politicians? Yes, we should.

When a politician gets entrenched in office he no longer gives a damn about anything but his wallet. This has been proven by their voting records. Research where their funding comes from and compare that to their voting records.

ANYONE who serves more than two terms is in it PURELY for self-interest.

Politicians don’t (legally) make enough money to subject themselves to public scrutiny. They make their money under the table from kick-backs. Why else would you spend millions of your own dollars for a job that doesn’t pay a tenth of that?

Term limits would ensure that nobody stays in office long enough to make themselves wealthy. Look at the percentage of millionaires in office compared to the rest of us.

Government service is supposed to be about service to your country and the public, not how much you can skim from the tax-payer.

Anyone who thinks politicians should be allowed to have life-time appointments is either severely deluded or a politician themselves.

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By sharonsj, December 14, 2009 at 9:24 am Link to this comment
(Unregistered commenter)

I’m beginning to think that a lottery might be the answer.  We stick a pin in the phone book and the unlucky chosen person is sent to Washington for two years.  There are only two rules: (1) do what’s best for the country, not for your local constituents, friends, family, and businesses, (2) accept anything from a lobbyist, corporation, and banker, and you will be shot dead.

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By ardee, December 14, 2009 at 3:47 am Link to this comment

mike112769, December 14 at 1:27 am

I have always seen term limits as ridiculous. Where is the logic in consistently throwing those with the most experience out of the job?

In fact, as Caro notes, doing such leaves exactly the wrong people with the power.

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By Caro, December 14, 2009 at 3:36 am Link to this comment

>>The ONLY way to fix our country is with term limits

I disagree. What will happen if no elected official
knows the ropes of government is that government
bureaucrats will become the de facto experts, and
those more directly responsible to the people for
their actions will have to depend almost entirely on
them to develop legislation.

The only thing that will BEGIN to fix the system is
to take the money out of the election process. Public
financing, and ONLY public financing of campaigns is
what we need.

Carolyn Kay
MakeThemAccountable.com

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By mike112769, December 13, 2009 at 9:27 pm Link to this comment

The ONLY way to fix our country is with term limits on everything from dog-catcher on up. Any politician who runs for more than 2 terms is only in it for self-interest. Term limits are a MUST or America will fail.

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By joell, December 13, 2009 at 8:52 pm Link to this comment

@Samson

“Is Democratic Party operative D.Sirota starting to finally come around to the point of view that we have to start defeating Democrats to get real change?”

@drum4one4all answers your question:

” This same article could have been written a year ago”

but it wasn’t & these writers aren’t that gullible. the unspoken rule is the “liberal intelligentsia” doesn’t write articles like these during the elections season, only afterwards.

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By drum4one4all, December 13, 2009 at 5:35 pm Link to this comment

“Come Election Day, if there are no consequences at the ballot box for the politicians—Democrat or Republican—who legislated bailouts, supported these appointments and are now working to undermine proposed Wall Street reforms”

If I recall correctly, Sirota was still in support of the Obama administration from candidacy thru very recently, as he was interviewed on Bill Moyers. This same article could have been written a year ago, because Obama’s campaign rhetoric was all for bailouts and Af-Pak and immoral war.  Was it less morally hazardous to vote in a guy beating war drums than it is now that he has followed his campaign promises?

Are you kidding me? Ask Sirota how he would vote right this moment. Still supporting Obama?  Frankly, these journalists who allowed the wool to be pulled over their eyes, who encouraged the larger public to vote for their misguided President, CAN NOT, and should not be trusted.

Where was Sirota’s support for candidates who voted AGAINST the war, or funding the war, or against the bailouts back when it mattered? How dare he point his finger at the public, shaking it “moral hazard” next time.  What about the moral hazard from last time?  Where was Sirota’s article in support of a candidate who is against the wall street bailout or the ILLEGAL IMMORAL wars?  Where? 

I’ll tell you where…NO WHERE.  He supported Obama then and now. The finger he points is on a hand with at least 3 other fingers pointing back at him.  And no telling where his thumb has been or is now.

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By jean Gerard, December 13, 2009 at 4:54 pm Link to this comment
(Unregistered commenter)

Suggestion for the guy who rides 90 miles roundtrip to the airforce base:

ASK QUESTIONS—you know, like:
    Do you have any kids?  What kind of world do you expect they will have to
live in?  How will it be the same?  How will it be different?
    Are you happy about the war in Afghanistan?  Do you think we should keep
on sending more troops?  For how long? 
    Are you interested in the people of Afghanistan?  What kind of place is it? 
Who lives there?  Are there any cities?  Who is Karzai?  What do you think about
the “war on drugs?”
    What did you work on today?  How is it related to the war? 
Well, you get the idea.  To ask good questions that will help them realize their
ignorance or lack of caring—that requires that you yourself study what
questions will be most revealing to them, to kind of catch their interest and
draw them out WITHOUT making judgments about their answers.

The above questions are not the best.  Asking good questions is a fine art.  But
it’s the best way to help people learn without insulting them by telling them
they are ignorant or wrong, and making them turn off on you.  Also, try not to
get involved in an argument over their answers.  Let them think about what
they just said, while you remain silent.  Sometimes things bounce back when
they actually realize what they just said.  So much of what we say is mindless.

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By yours truly, December 13, 2009 at 4:03 pm Link to this comment
(Unregistered commenter)

Seems to me that right now the most serious moral hazard is for us progressives not only to play the electoral & assorted other status quo games, but to reward one another with praise and encouragement for persevering in such hopelessly futile* and ultimately self-destructive pursuits.  Self-destructive because said pursuits effectively divert our attention from taking up the only action that can avert doomsday**, namely, our rising up masse and changing the world.

*not only futile but insane, since one definition of insanity is doing the same thing over and over again and each time expecting a different outcome.

**doomsday on account of perpetual war + global warming + economic collapse, and time running out

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By godistwaddle, December 13, 2009 at 11:19 am Link to this comment

Bush remains unhanged.  Bankers have escaped the noose and the piano wire and the hunting rifle.  Nobody’s held accountable but the poor.

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By Shift, December 13, 2009 at 11:19 am Link to this comment

When psychopaths lead sociopaths death is stalking us.

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By bozh, December 13, 2009 at 11:06 am Link to this comment
(Unregistered commenter)

I got good news: i am skipping this and next christmas. So, happy 2012 christmas to u.
Now, i give u even better news: by 2009 santa will be so democratic, he’ll visit every igloo, tent, lair mudhut, and places were hobos/homeless sleep: doorways, benches, under bridges, cardboard boxes, etc.
And of course, all mansions and palaces as per his democratic and egalitarian values! Please forgive my good cheer. I refuse to cry! tnx

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By felicity, December 13, 2009 at 10:59 am Link to this comment

I repeat.  Bernanke declared to a Committee that we certainly don’t want another AIG or Lehman (let them fail) UNLESS, of course, their failure would destabilize the entire system.  Mr. Bernanke, that’s the definition of ‘too big to fail.’

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By Cole..., December 13, 2009 at 9:50 am Link to this comment
(Unregistered commenter)

Ardee—sure, what I wrote is a pipedream! But no more a pipedream than voting for a candidate who gave only ‘hope and change’! Then delivered a variety of hopeless and changeless.

Darn near all of the comments recognize the futiity of the public, the thinking public, to get the so called representative to act in their wants. If you participated in the pre invasion Peace March you were part of the “demonstration which was Ignored”.
And that pretty much defines what you stated as a ‘top down’-do as we, the top guys, say-send us money and work on. You worked on that for years!
I worked on it a couple of times and got frustrated and P’d off.

Sure my comment has no ‘methodoloy’—who would read it?

My comment is based on the old corporate raider trick-get 4% of the company and taking it over is a sinch. The demo party is a company and can get ‘taked over’—the basic is 4% devoted and motivated. ther are over 4% already in the demo camp, they voted in large numbers and there is already 4% in the Greens. Takeover is very possible and a take over is the only way to get the ‘top guys’ out and get people nominated who will be responsive.

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By talullah, December 13, 2009 at 7:32 am Link to this comment

War is a business.  There exists no evidence in favor of our having spent even a first penny/first soldier on the Iraq war.  Reporting every example of malfeasance, one example at a time, enables journalists to make out like bandits—and with our soldiers still being the victims, and sometimes paying the ultimate price, same way they pay the real criminals.

What if members of the public, even only the public of other nations, were to challenge members of Congress to produce the evidence on which their war votes/pro-war stances have been based…and if those members of Congress responded by letting it be known that they are no more responsible for, or representative of, the sum total of the people’s knowledge at any one time than are journalists?  Members of Congress might add that journalists are, in fact, citizens (and constituents) before they are journalists.

You know who journalists are, don’t you? They’re that body of professionals who’ve lately been lobbying, fulmigating, for a special dispensation for themselves, which dispensation would be used by any of them when it came time for him to cite his sources.

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By joell, December 12, 2009 at 6:49 pm Link to this comment

“. Come Election Day, if there are no consequences at the ballot box for the politicians—Democrat or Republican—who legislated bailouts, supported these appointments and are now working to undermine proposed Wall Street reforms”

so we’re suppose to vote out the bad dem/reps and vote in some good dem/reps. didn’t we try this last november? i believe it was called “change we can believe in?”

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By Caro, December 12, 2009 at 6:06 pm Link to this comment

>>Wall Street is so powerful that it is above the law
and above punishment

Only if we let it be.

Carolyn Kay
MakeThemAccountable.com

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By Virginia777, December 12, 2009 at 5:50 pm Link to this comment

in other words, Wall Street is so powerful that it is above the law and above punishment

(how convenient)

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By scotttpot, December 12, 2009 at 5:27 pm Link to this comment

These bailouts and endless wars are used to keep Americans
poor, scared, divided, undereducated ,violent and insecure. The corruption is not
unintentional and is not going to be fixed. It is our system.
With television and internet addiction it is impossible to rally enough people to
have any meaningful resistance. The disinformation spread by corporate media
have made facts quaint . Third Party is our only chance.

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By Norbie7, December 12, 2009 at 4:16 pm Link to this comment
(Unregistered commenter)

What I read last month in Harpers, about Obana and health care, all I can say is he’ll soon be in trouble with a majority of Democrats.

Each weekday I ride in a vanpool which travels 90 miles roundtrip to an air force base.

Certain members of the vanpool are involved in managing and interpreting data relayed from the war zone by satellite. It is real-time data sourced by the automated vultures floating above the Mideast.

I hear of fatigue, of image specialists falling victim to images which they’re assigned to interpret.

Every one of us riding these weekdays expresses disdain for what went before, for messeurs Cheney and his puppet, infamously nicknamed ‘Shrub’ by Ms. Ivins.

Otherwise, they prattle about what they sit and observe, nightly programming you understand. It’s all a soap opera, folks. In this case, said interpreters do not wish to talk of blood and gore. Style and appearances are all of what is appropriate for discussion. Any moral dimension is out of the question (hint: they loved Hillary last year). To talk of blood invites rebuke, snide admonitions to ‘get real.’

No wonder that Shrub got to the point where he managed to.

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By Juanito, December 12, 2009 at 3:49 pm Link to this comment
(Unregistered commenter)

Each weekday I ride in a vanpool which travels 90 miles roundtrip to an air force base.

Certain members of the vanpool are involved in managing and interpreting data relayed from the war zone by satellite. Real-time data sourced by the automated vultures floating above the Mideast.

I hear of fatigue, of image specialists falling victim to images which they’re assigned to interpret.

Every one of us riding these weekdays expresses disdain for what went before, for messeurs Cheney and his puppet, infamously nicknamed ‘Shrub’ by Ms. Ivins.

Otherwise, they prattle about what they sit and observe every night on television. It’s all a soap opera, folks. In this case, said interpreters do not wish to talk of blood and gore. Style and appearances are all of what is appropriate for discussion. Any moral dimension is out of question (hint: they loved Hillary last year). To talk of blood invites rebuke, snide admonitions to ‘get real.’

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By Mary Ann McNeely, December 12, 2009 at 3:31 pm Link to this comment

Toward the end of the Coen Brothers film “No Country for Old Men”, the Tommy Lee Jones character visits his uncle who tells him, “You can’t stop what’s coming.”  And what’s coming is the end of the ichiban phase of the United States.  We are in a precipitous decline from which there is no turning back because practically no one gives a rat’s ass.

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By Howie Bledsoe, December 12, 2009 at 8:46 am Link to this comment
(Unregistered commenter)

Well, the dog will forever pee on the rug, so I suggest buying a black one.

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By ardee, December 12, 2009 at 3:40 am Link to this comment

Cole…, December 11 at 4:48 pm

Your suggestion that folks “infiltrate” one of the two major parties in order to change it shows me that you have no experience working within said party.

What you suggest is an impossibility I fear, and I say that from a position of having been active grassroots Democratic Party politics for decades. As it is a top down group, as decisions are made in secret and in isolation, as the orders come from above and suggestions from below are ignored completely, what you suggest without noting any methodology I might add seems more a pipedream than a reality.

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By yours truly, December 12, 2009 at 1:44 am Link to this comment
(Unregistered commenter)

The biggest moral hazard of them all would be for us to keep playing the electoral game instead of rising up en masse in order to turn things around so that we can make good on the promise of government of, for and by the people, all inclusive with no have-nots nor left-outs.  The consequences of our not rising up?  Perpetual war + global warming + economic meltdown = doomsday, that’s what.

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By LostHills, December 11, 2009 at 9:33 pm Link to this comment

Sooner or later, they have to face the voters, and then there will be much wringing
of hands and knashnig of teeth…

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By Jean Gerard, December 11, 2009 at 4:58 pm Link to this comment
(Unregistered commenter)

Caro, nothing I said contradicts what you posted subsequently - at least so far
as I can see.  My comment was meant to emphasize the social responsibility of
science and technology, which just happens to be a particular beef of mine that
I think maybe we can,  and surely we should do something about before the
“moral hazards” that scientists create but make no attempt to control, but turn
over to the market and to government, both of which are irresponsible.  I was
around at the time the A-bomb was invented and knew some of the scientists
who later acknowledged that they could have, and should have interceded. 
Whether it would have made a difference we will never know—but the
responsibility remains.  It’s also our responsibility—not just theirs, pf cpurse.

A current example of irresponsible science is the knowing pollution worldwide,
and the lies told by people who claim scientific validation when they make
claims for “clean coal.” Of course at the base of all of it is money.

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By Caro, December 11, 2009 at 2:22 pm Link to this comment

>>The greatest “moral hazard” of our time is how we
allow modern hi-tech science to be used—for war or
for peace.

Nonsense. Every decision made by our government is in
some way a payback to contributors. It’s legalized
bribery.

During the message board wars of 2000, one of the
things the right wingers used to say is that you
can’t trust ordinary people to make the right voting
decisions, because once they realize the treasury
belongs to them, they’ll vote to keep all the money
for themselves.

The monumental irony is that the same rich, right-
wing elitists who were putting those words in the
mouths of the bushbots were actually the ones who
have grabbed the treasury as though it belonged to
them, and are keeping all the money for themselves.

Carolyn Kay
MakeThemAccountable.com

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By jean Gerard, December 11, 2009 at 1:43 pm Link to this comment
(Unregistered commenter)

The greatest “moral hazard” of our time is how we allow modern hi-tech
science to be used—for war or for peace.  It’s an over-simplification, but
basically all our decisions for some time now have been based on problems
created by hi-tech science. 

In the face of hi-tech science we feel overpowered because most of us think,
falsely, that we “don’t understand it.”  Let “them” (scientists, specialists,
scholars, think tanks, PhDs etc.) take the responsibility for deciding. They
should know what they are doing.

Yet evidence has proved that they don’t know—or if they do, they are “not
interested in politics,” “not responsible for how science is used,” “leave it to
others to decide (politicians, military, etc.)  Results of the A-bomb were
foreseen, but science did little or nothing to prevent it’s use.  They “wanted to
know what would happen.”  Results of any new hi-tech weapon are not
considered from any other angle than “to find out what will happen.” (Example:
NASA’s recent useless but very expensive “moon shot to find water.”

Social impact is always important.  Science and social impact cannot really be
separated, of course, but still an artificial wall can be built and maintained for
the sake of convenience—meaning, in most cases, relief from responsibility. 
Relief from “moral hazard.”

It’s time to drop the charade and face the truth.  Every technological innovation
has a social impact, and therefore creates a “moral hazard.” Everyone—
inventors, discoverers, manufacturers, teachers, employers, ditch-diggers,
comment writers, ordinary people—have to help make the decisions.  As it is
now, an elite of mostly power-driven persons decide the life or death of
millions who have no say.  There is nothing fair about it, but the “overlords” will
never change the situation.  That’s our job, whether we want it or not.

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By Cole..., December 11, 2009 at 12:48 pm Link to this comment
(Unregistered commenter)

Altho I agree, almost 100% with what Samson writes,
I can almopst scream with disagreement of backing a “third party”. The Greens have under 4% and by the time, if ever, they get over 5% there will be nothing remaining of the good old USA.

The Greens and those nonaffiliated have to infiltrate the Demo party and join with those who are in and disgusted with the Demo party and “CHANGE” it. The choice is clear: Throw out the incumbants and elect those who are nearer and dearer to Progressive nonwar ideals. Otherwise the third party will continue to be the best thing the RePugs have going for them. Face the facts the RePugs have less than 30% approval but still get near 50% of the vote——if the 3rd party pulls any away the other guy wins by default.
The overwhelming vote of the Demo electorate was for change and now we see that the change has to come first from within. Obama talked of “change”-his talk was right, his actions are not. Time to disgourge Obama and replace him and get on with a “CHANGE”!

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By oregoncharles, December 11, 2009 at 11:52 am Link to this comment

Moral hazard while voting:

“And let’s be fair—it’s not just Democratic politicians who are creating political moral hazard. Many Democratic pundits, activists and voters continued cheering on President Obama while he stuffed his administration full of Wall Streeters—and many of these rank-and-file voices attacked as disloyal those progressives who raised questions. That told Obama he faces few consequences—and even defense—from his own base for promoting those who engineered the economic meltdown.”

That is the case for moving to the Green Party.  Just substitute “Democrats” for “Obama” and you have the whole thing.  The same applies to the wars, health care, and so on.

Let me put it another way:  progressives love to scold Congressmembers, especially, for “spinelessness” (a lame excuse for their betrayal, of course).  How can you expect your politicians to “grow a spine” if YOU don’t have the “spine” to vote your principles, or for a party that actually HAS principles?

Join us; we’re waiting with open arms: http://www.gp.org.

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By Samson, December 11, 2009 at 10:55 am Link to this comment

PS ... any grassroots campaigns that intend to challenge the big money candidates need to start organizing NOW!

It takes time to build a grassroots campaign. They always start small, then slowly build volunteer by volunteer.  We can’t run a two month campaign like the corporate candidates do by flooding the airwaves with negative ads.  We have to do politics ‘retail’, one meeting, one voter at a time.

Grassroots campaigns need to start early. Now is the time to begin. In fact, its probably just a little too late.  Not irretreivably so, but once you get going, you’ll wish you’d started sooner.  Start now.

Don’t wait on leaders. Don’t wait on someone to present you with a gift-wrapped campaign for change. When they do, it will be phony, like Obama’s.  You need to build your own local campaigns and movements.  And now is the time to begin.

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By Samson, December 11, 2009 at 10:51 am Link to this comment

Is Democratic Party operative D.Sirota starting to finally come around to the point of view that we have to start defeating Democrats to get real change?


“The only open question is whether the public at large becomes complicit, too. Come Election Day, if there are no consequences at the ballot box for the politicians—Democrat or Republican—who legislated bailouts, supported these appointments and are now working to undermine proposed Wall Street reforms, then America will have created the biggest moral hazard of all.”

David seems to be making some progress towards reality.  The next step is to openly admit that the best way to make these politicians pay the price is to start organizing independent progressive campaigns in their districts.

David is exactly right that we must start kicking some of these politicians out of office. That we must make them realize there is a price to be paid.  The key is to realize that the Democrats win on OUR VOTES. They mislead the progressive majority in this country into voting for them. That’s the only way they can win.

The best way to make them pay this price is to take back our votes.  We could just stay home, but they’d probably miss that message, or at least spin it some other way.  So, we need to make it as obvious as possible.  We must run our own candidates in the general election, back them, work for them and vote for them.  Then, next Nov, when these corrupt politicians lose, everyone can see that our votes went to our candidate instead and this is why they lost.

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By bozhidar, December 11, 2009 at 10:16 am Link to this comment
(Unregistered commenter)

Probably since 10kyrs ago there had also been division among the ruling classes. Or one cld say that in sumer, akkad, and elsewhere the ruling class had also been classful.

Its head had been god-king. This i very similar to US social structure.
A prez, when it comes to killing aliens, is the godhead.

So, basic structure of societies everywhere, save in a few land that are in incipient development of a socialist structure, had not been changed at all- save cosmeticly.

In US, the upper class or classes are extremely interdependent while the low[er]class near-totally dependent.
To make matters worse, the near-utter or even utter dependencies had been convinced that they are independencies and are strogly urged by the ruling class to strive to become more and more independent.
And thus are sent on a hunt for a snark.
Eventually, the search for independence ending in self-blame and feelings of inferiority.
Such people are then easily ruled-over!
So, at least ten k yrs old lesson still had not been inparted to school kids; precisely why ‘schooling’ is mandatory!
Does anyone think that the ruling class wld allow more than one ‘education’,one political party, or two interpretations of any constitutional utterance.
Its no wonder pols and media call this looped reasoning “the greatness of america”.
Indeed! the best fascist rule ever developed! tnx

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By Caro, December 11, 2009 at 9:12 am Link to this comment

And there’s moral hazard in never apologizing for
helping to foist another right-wing president on us.

Carolyn Kay
MakeThemAccountable.com

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By RdV, December 11, 2009 at 9:06 am Link to this comment

There is no accountability anywhere.
Corporate MSM mouthpieces are spinning Obama’s war is peace preaching like we are all the amen choir, while Obama signs off on endless war and ongoing transfer of wealth.

http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout/print

This morning there was a story on CNN gushing over how the fierce independent tribes of Afghanistan were greeting the generous and charitable US armies as liberators, who unlike the Russian army, was there to assist and improve their lives.
  Where have we heard this before?
They were wrong before and they are wrong again but they are intent on picking the carcass clean. Like Bush, Obama will crash and burn for his cynical bait and switch, and it can’t be soon enough. Instead we will have to witness this chorus of fawning fabrication until the bottom falls out again.
After us, the deluge.

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By G.Anderson, December 11, 2009 at 8:21 am Link to this comment

But consider this, President Obama is the biggest political sellout of all time..

http://www.huffingtonpost.com/edward-harrison/matt-taibbi-on-obamas-big_b_388594.html

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By GEM_in_Orange, December 11, 2009 at 5:47 am Link to this comment
(Unregistered commenter)

Doesn’t the same reasoning apply to lack of consequences for, say, torture and waging agressive war?  It appears that the President has grabbed the “moral hazard” prize with both hands.

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By C.Curtis.Dillon, December 11, 2009 at 1:41 am Link to this comment

The unfortunate truth is it is easier to make money by cheating than by playing fair.  There were so many morally questionable actions during the meltdown and yet almost no one has been punished.  Given that greed and criminal activity are profitable (and unpunished) why would any sane person believe that Wall Street (let alone Washington) would change their ways.  Given the option of taking the easy (even if corrupt) path to power and wealth vs. the hard slog along the morally correct path, which one do you think most people will take?

I expect there will be many more meltdowns in the near future.  We are already seeing the commercial real estate bubble fracturing plus the credit card bubble is showing signs of weakness and our friends on Wall Street are already cooking up several more excellent stews which will eventually blow up.  We need to remember that money is made during upheavals in the financial markets ... both up and down.  Just look at how well Goldman is doing!

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By P. T., December 11, 2009 at 12:31 am Link to this comment

Such a thing is sometimes referred to by economists as a “perverse incentive.”  If you reward people for bad behavior, you will get more of it.

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