Thursday, February 14, 2008

How to Socialise Risk

What does it mean when a government "socializes" something? The answer is quite simplistic.

When a government socialiszes something, it means that it is incurring a cost to do something, and that cost is transferred to the taxpayer. Northern Rock in the U.K. is an excellent example and illustrates The Economic Incompetence of Socialism.

The Wall Street Journal reports on the attempts by banks to get government to "socialize" some of the risk THEY took on:

"The banking industry, struggling to contain the fallout from the mortgage debacle, is urgently shopping proposals to Congress and the Bush administration that could shift some of the risk for troubled loans to the federal government."



Nice business to be in, this banking business. If going to school was anything like banking, nobody would fail, no matter how dumb you are.

2 comments:

Anonymous said...

I wish I had an uncle sam to clean up after me. Great post.

Freemarketman said...

Thank you Kevin. I appreciate the feedback.