Our Views: Bobby Jindal, big spender
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‘If Washington can afford to bail out Wall Street, they can certainly help Louisiana’s working families get back on their feet.” Another demand for reckless federal spending from some wild-eyed Louisiana liberal?
No. This came from Republican Gov. Bobby Jindal.
The statement from the governor had to do with the passage in the U.S. House of a budget resolution that while generous in some ways to Louisiana, does not include some key provisions for reimbursement to the state for costs incurred in hurricanes Gustav and Ike.
Those are, by the way, legitimate requests and the governor and the state’s delegation in Congress continue to work for a better result for the state.
But the governor’s rhetoric about bailouts for Wall Street shows how much even the most conservative Republicans have heard public outrage about financiers’ mistakes being covered by taxpayers’ money.
The wisdom of this specific “bailout” package or another is debatable. But another phrase in this debate, “moral hazard,” applies to the rhetoric of politics as it much as it does to behavior in the marketplace.
Moral hazard is the tendency for people to take bigger risks if their potential losses are insured against bad results. For example, people are more likely to live on the beach if their homes are insured by the federal government, even if that means they’re much more likely to be flooded.
What is the rhetorical moral hazard? That political demands for increased spending in other areas will be fueled by politicians equating one type of bailout with another type of spending. It’s the same one that we heard from Democrats during the Iraq war. If we can pour billions into the war effort, why can’t we spend more and help the working families of Louisiana get by?
A good question only to a point. These categories of spending aren’t the same thing, but all of us are guilty at one time or another of equating them. And the more that we spent on the war, the greater the rhetorical moral hazard.
By investing in bailouts of Wall Street, the government is engaging in a moral-hazard exercise. The governor’s statement is another way that politicians, seizing on public discontent with Wall Street and its discontents, fuel a demand for spending more public money on other priorities.
Welcome to the left, Comrade Bobby.
No. This came from Republican Gov. Bobby Jindal.
The statement from the governor had to do with the passage in the U.S. House of a budget resolution that while generous in some ways to Louisiana, does not include some key provisions for reimbursement to the state for costs incurred in hurricanes Gustav and Ike.
Those are, by the way, legitimate requests and the governor and the state’s delegation in Congress continue to work for a better result for the state.
But the governor’s rhetoric about bailouts for Wall Street shows how much even the most conservative Republicans have heard public outrage about financiers’ mistakes being covered by taxpayers’ money.
The wisdom of this specific “bailout” package or another is debatable. But another phrase in this debate, “moral hazard,” applies to the rhetoric of politics as it much as it does to behavior in the marketplace.
Moral hazard is the tendency for people to take bigger risks if their potential losses are insured against bad results. For example, people are more likely to live on the beach if their homes are insured by the federal government, even if that means they’re much more likely to be flooded.
What is the rhetorical moral hazard? That political demands for increased spending in other areas will be fueled by politicians equating one type of bailout with another type of spending. It’s the same one that we heard from Democrats during the Iraq war. If we can pour billions into the war effort, why can’t we spend more and help the working families of Louisiana get by?
A good question only to a point. These categories of spending aren’t the same thing, but all of us are guilty at one time or another of equating them. And the more that we spent on the war, the greater the rhetorical moral hazard.
By investing in bailouts of Wall Street, the government is engaging in a moral-hazard exercise. The governor’s statement is another way that politicians, seizing on public discontent with Wall Street and its discontents, fuel a demand for spending more public money on other priorities.
Welcome to the left, Comrade Bobby.
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