Sunday, April 06, 2008
Be accountable for your gambling
These two excerpts say it all...
I found them attributed to Gary Becker in a Wall Street Journal opinion column:
"The many excuses offered by some home owners for their plight, and also eagerly by the authors of these human interest stories, is that the borrowers did not understand that these introductory interest rates might rise a lot after a few years, or that they would have negative equity in their homes if housing prices stopped rising and began to fall. An obvious alternative explanation for their behavior is that they gambled that the good times would continue indefinitely."
"Successful attempts to shift the responsibility for bad decisions toward others and to society more generally create a 'moral hazard' in behavior. If individuals are not held accountable for decisions and actions that harm themselves or others, they have less incentive to act responsibly in the first place since they will escape some or all of the bad consequences of their actions."
