Moral Hazard

I had been thinking about 'moral hazard' and how it applies just as much to Gordon Brown as to the banks he falsely blames for the current crisis of money. Serendipitously I came across this article from the Mises institute.

Bailing out the banks is morally hazardous, and the future will show us that it has been a major policy error. But, what else could Gordon do? His 'success' - in fact the success of all western governments with a monopoly of money - is bound up with the banks. They are simply a highly regulated and complicit cartel supplier of a monopoly product.

But, there is also the moral hazard to tempt governments who have the monopoly of money. And boy, do they get tempted to use it. If you give politicians the monopoly of money they will exploit it to increase their power and reduce our freedom. In fact they have done so in spades. We are enslaved in a new feudalism where we get a job, get a mortgage and have to stay in the job to pay the mortgage which means that we can be taxed by the government.

As the article says:

We need to consider what government wants — more power and revenue — and the means available to attain it.

This process also destroys the family, I quote again:

By fueling the exponential growth of the welfare state, fiat inflation fosters the decline of the family. Families become degraded into "small production units that share utility bills, cars, refrigerators, and especially the tax bill." The welfare state drives the family and private charities out of the "welfare market."

All of this exposes both the ignorance and deceit of Gordon Brown and socialism.

The sooner that both are consigned to history the better.

The article says it all much better than I can. Read it well and remember it. And someone, please tell Gordon Brown and New Labour.