Moral hazard can exist when a party can take risks without having to suffer consequences.
In 2008, the world, due to the financial sector, fell prey to moral hazard. A global industry was bailed out at the expense of consumers, homeowners, and taxpayers. In 2020, the world watched with fear as an unknown virus swept over us all. The response from the government was to provide everyone with money and other means of support to weather the storm. Between 2008 and 2020, the Federal Reserve kept interest rates artificially low for far too long, which allowed businesses and consumers to operate in a utopian world filled with cheap everything striving for peak efficiency. Before Covid, the virus of moral hazard was already infecting us all. No consequence for one’s action. Whether it be a business, a government, or an individual. Simply tinker with a rate, and/or throw money at the alleged crisis, and it’ll go away soon enough. Don’t worry about letting losers lose when everyone can win. Kick the debt can further and further down the road.
There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax.
Mitt Romney was caught making this statement during his failed 2012 presidential run. The line drew sharp criticism, but one needs to ask himself, was Mitt wrong? Read what he said again. Ask yourself if he’s missing anything? Sure, the line may be brutally candid, but put yourself in the shoes of one of those 47 percent he refers to. If a party, or simply a politician, is promising to ‘pick you up by the bootstraps’ and help you battle any crisis you may endure, then why would you abandon that hero? And, if said party has helped refinance your underwater home after 2008, bought your clunker of a vehicle from you in 2009, provided you free healthcare in 2010, offered you zero percent interest on everything throughout the 2010s, gave you stimulus checks when the world shutdown, and even helped payoff your student loans this year, why would you ever even consider abandoning such a remarkable person in your life? This group has essentially been giving you everything you could ever ask for for nearly a decade and a half now.
It’s not right to say we’re worse off, if you go back 20 years ago, cars were worse, the air was worse. People didn’t have iPhones.
The line above doesn’t seem that bad, right? You will likely agree with the statement. But, what if you came to find out this was a crudely spoken line at a conference filled with CEOs. And, to make matters worse, the CEO of a recently bailed out bank made this line when asked if he sees income inequality throughout America. Now, you likely feel this line was made in bad taste. But, like the Mitt Romney line, read it again, and ask yourself, is he wrong? Think of the iPhone. It can do everything for you. And, think about those cheap interest rates that made everything more efficient. Those low rates helped apps like Uber, Amazon, Netflix, Facebook, and DoorDash become reality. That very iPhone can get you a car to the airport, order you anything… with free and expedited shipping, enable you to watch whatever you want whenever you want, connect socially with anyone around the world, and get you a Big Mac meal sent straight to your door. Life doesn’t seem so difficult anymore, does it? Income inequality starts to feel like an overstatement.
I have a very great group of people, I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn’t lose any voters.
This was spoken by Trump early on in America’s song and dance with it’s most controversial figure in a generation. Like the other lines, it’s one that is remarkably candid, therefore, ruffles feathers. But, like the other lines, read it again, and simply ask yourself, is he wrong? We’ve seen three elections, since his 2016 victory, where, whether his name was or wasn’t on the ballot, Trump was on the ballot. We’ve watched his base remain steadfast. They have yet to waver. Yes, we’ve seen other Republicans rise locally. A certain governor in Florida comes to mind. But, no one within the party has even remotely entered his orbit. Everyone remains in his shadow. But, on the other hand, like the Republicans, Democrats have remained steadfast in their vehement refusal to touch anything Trump. The country remains remarkably divided after four straight elections now. Whether it was ‘build the wall,’ or ‘impeach the motherfucker,’ or ‘I’ll bring back unity to America,’ or ‘democracy is on the ballot’, no one is budging. From 2016 to 2022, the numbers have practically stayed the same. The lone exception being Florida.
So, what does all of this have in common, and how does it relate to the 2022 Midterms? The world changed after the Great Recession in 2008, and we have yet to return to a pre-2008 landscape. We likely never will. Moral hazards abound. Losers never lose. Everyone kind of wins.
Sure, blame it on Trump. Today’s elephant in the room is obviously him, but yesterday’s elephant was Bush. And, in between, it was Romney and Palin. Tomorrow’s will likely be DeSantis and his alleged book burning, gay hating, abortion restricting policies. Anyone who’s old enough would be remiss to not understand the hatred of W and Cheney was just as great, but the patriotic, nostalgic unity of 9/11 kept just enough in W’s camp until the 06′ Midterms when we finally realized there were no WMDs and torture tactics ran rampant courtesy of the CIA in two deeply flawed wars.
The fact of the matter is, America is remarkably divided. Divided largely between doers and moochers. Doers who refuse to rely on the government, and don’t get by because of their last name. Like Mitt stated, the non 47%. Then, you have the moochers. The 47% plus the top few percent who ride the coattails of mommy and daddy’s trust fund. They can afford to emphasize the 47% at the expense of doing class. The Democrats have done just enough to keep coddling the moochers, rewarding a few extra special winners, and establishing a perennial boogeyman Republican to scare that small group of voters that could sway an election into the hands of the GOP. And, now that all their moochers have an iPhone to fill in the void of mama and papa Democrat in between crises, why would anyone ever risk their vote on that frightening elephant who wants you to work and earn a living? Maybe the moochers aren’t getting enough credit.
Phil Your Day 