While doing some follow-up research on my article that will appear in an upcoming volume of the University of Oklahoma Law Review, I came across this New York Times article.
It makes an interesting argument that I've also offered before--that is, the federal government's role in the bailout of the Long Term Capital Management (LTCM) hedge fund in the late '90s played a key role in today's crisis by advancing the "moral hazard" theory.
You see, by bailing out all of these banks, insurance companies, car manufacturers and such, the federal government is not only delaying the inevitable pain of default but it is also propping up the idea that bad decision-makers have a decent chance of finding a final backstop in the form of Uncle Sam and his ability to create money.
All in all, definitely an article worth reading.
