It should definitely be the case that the government shouldn’t be buying the risky creations of other businesses. Government backed versions should be helping to support the smallest fraction of disadvantaged people that wouldn’t otherwise be serviced in the market. (compare with government supporting the last mile of rural postal customers that don’t have access to UPS/FedEx/etc.)
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Keenan, though, had a bigger point: All the structural disincentives that had built Americans’ irrational response to the climate risk were now reaching their logical endpoint. A pandemic-induced economic collapse will only heighten the vulnerabilities and speed the transition, reducing to nothing whatever thin margin of financial protection has kept people in place. Until now, the market mechanisms had essentially socialized the consequences of high-risk development. But as the costs rise — and the insurers quit, and the bankers divest, and the farm subsidies prove too wasteful, and so on — the full weight of responsibility will fall on individual people. 1
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links: privatizing profits and socializing losses economics capitalism
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