The Fed’s decision a couple of days ago has pretty much validated the moral hazard syndrome.   Everyone will be encouraged to speculate all over again.  There’s plenty been written about the financial moral hazard over the past few weeks so instead I’m going to write about all the other moral hazards found or soon to be found in America.

First, there’s the health insurance moral hazard. Hillary Clinton has just unveiled her health care plan which entails mandating every American get health insurance. I won’t debate the pros or cons of such a mandate but I will write about the possible moral hazard here.

If all Americans are mandated to carry insurance via tax subsidized plans and programs then I can only imagine that it will become pointless for most people to even attempt to live a healthy lifestyle. Why should I go to the gym every morning to stay fit when the government sponsored health plan will pay for my heart surgery? Why shouldn’t I go to the bar and get drunk today after work if my government sponsored health plan will help grow a stem cell liver somewhere for me when I need my own replaced after cirrhosis.

While I’m at it, I should go out and practice promiscuous sex with as many people as I want because I now have unlimited health coverage! STD? No problem, give me a shot or two – they’re free! AIDS? No problem, give me some free medicine to suppress the disease so it doesn’t look like I have it then I can infect others. Don’t worry, they get free medicine too!

Pregnancy? Free abortions and/or RU486 for everyone!

Second, we have government flood insurance (yet another moral hazard) which encourages building homes near dangerous areas prone to flooding: beaches, rivers, deltas, etc. New Orleans gets flooded again, no problem – government will rebuild everything for free!

Third, we have war for energy program sponsored by the US military! Why bother driving fuel efficient cars when we can have Uncle Sam tap energy reserves all over the world with a big billy club. Alan Greenspan admitted to the program but then backpedaled like all politicians when someone put some pressure on him a few days ago. Yet another moral hazard, don’t worry about energy because the government will find it for you and give it to you at reduced cost!

Many of the moral hazards can be expressed in a funny yet sad quote from the movie Good Will Hunting,

“Why shouldn’t I work for the N.S.A.? That’s a tough one, but I’ll take a shot. Say I’m working at N.S.A. Somebody puts a code on my desk, something nobody else can break. Maybe I take a shot at it and maybe I break it. And I’m real happy with myself, ’cause I did my job well. But maybe that code was the location of some rebel army in North Africa or the Middle East. Once they have that location, they bomb the village where the rebels were hiding and fifteen hundred people I never met, never had a no problem with get killed. Now the politicians are sayin’, “Oh, Send in the marines to secure the area” ’cause they don’t give a shit. It won’t be their kid over there, gettin’ shot. Just like it wasn’t them when their number got called, ’cause they were pullin’ a tour in the National Guard. It’ll be some kid from Southie takin’ shrapnel in the ass. And he comes back to find that the plant he used to work at got exported to the country he just got back from. And the guy who put the shrapnel in his ass got his old job, ’cause he’ll work for fifteen cents a day and no bathroom breaks. Meanwhile he realizes the only reason he was over there in the first place was so we could install a government that would sell us oil at a good price. And of course the oil companies used the skirmish over there to scare up domestic oil prices. A cute little ancillary benefit for them, but it ain’t helping my buddy at two-fifty a gallon. And they’re takin’ their sweet time bringin’ the oil back of course, and maybe even took the liberty of hiring an alcoholic skipper who likes to drink martinis and f###in’ play slalom with the icebergs, and it ain’t too long ’til he hits one, spills the oil and kills all the sea life in the North Atlantic. So now my buddy’s out of work and he can’t afford to drive, so he’s got to walk to the f###in’ job interviews, which sucks ’cause the shrapnel in his ass is givin’ him chronic hemorrhoids. And meanwhile he’s starvin’ ’cause every time he tries to get a bite to eat the only blue plate special they’re servin’ is North Atlantic scrod with Quaker State. So what did I think? I’m holdin’ out for somethin’ better. I figure f### it, while I’m at it why not just shoot my buddy, take his job, give it to his sworn enemy, hike up gas prices, bomb a village, club a baby seal, hit the hash pipe and join the National Guard? I could be elected president. “

Everyone is doing their part to create moral hazards.  The Fed works the credit & speculators moral hazard, Democrats work on the health insurance moral hazard, Republicans enthralled with energy moral hazards, and everyone else chips in to make it all happen.  Unfortunately, these hazards are not really sustainable in the long run, it’ll all come crashing down at some point in the near future.