Bill Gates has been warning of pandemic risk for many years.
Prudent companies ought to have been insuring themselves against such a risk.
Our economic system as a whole "Learns" a very bad lesson: saving, insuring against risk, and expanding cautiously are for "Suckers," as the system rewards those who make huge profits by taking extreme risks during good times, and bailing them out when those risks blow up on them.
Of course, a healthy society needs some risk takers if it is not to stagnate.
If every time those risks go badly, resources are taken from the more cautious to bail out the adventurers, then being cautious becomes a fool's game-and irresponsible risk taking becomes the way to get ahead. But now that we are in this cycle of drunken binges on credit, followed by hangovers that must be ameliorated by further injections of liquidity, how can we escape? It is true, given the fix we have gotten ourselves into, that the failure of, say, JP Morgan Chase, Goldman Sachs, or AIG, might genuinely threaten the economy as a whole.
Companies that appear "Too big to fail" in one crisis should, if bailed out, be broken up so that their possible failure no longer presents such systematic risk.
Another salutary move might be to make top executives, as a condition for a bailout, pay back bonuses they had received from taking on too much leverage.
https://www.theamericanconservative.com/articles/why-we-should-have-let-too-big-fail-in-2008/
Prudent companies ought to have been insuring themselves against such a risk.
Our economic system as a whole "Learns" a very bad lesson: saving, insuring against risk, and expanding cautiously are for "Suckers," as the system rewards those who make huge profits by taking extreme risks during good times, and bailing them out when those risks blow up on them.
Of course, a healthy society needs some risk takers if it is not to stagnate.
If every time those risks go badly, resources are taken from the more cautious to bail out the adventurers, then being cautious becomes a fool's game-and irresponsible risk taking becomes the way to get ahead. But now that we are in this cycle of drunken binges on credit, followed by hangovers that must be ameliorated by further injections of liquidity, how can we escape? It is true, given the fix we have gotten ourselves into, that the failure of, say, JP Morgan Chase, Goldman Sachs, or AIG, might genuinely threaten the economy as a whole.
Companies that appear "Too big to fail" in one crisis should, if bailed out, be broken up so that their possible failure no longer presents such systematic risk.
Another salutary move might be to make top executives, as a condition for a bailout, pay back bonuses they had received from taking on too much leverage.
https://www.theamericanconservative.com/articles/why-we-should-have-let-too-big-fail-in-2008/
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