Why more of our bishops do not adopt the Wichita model is a mystery to me. If they truly believe that Catholic schools are the best way to evangelize and catechize the next generation of Catholics they ought to be able to sell that idea to their people. It may take several years to sink in (as it did in Wichita) but it would seem that the results are well worth the effort.

Moral Hazard is a special kind of information asymmetry. It is a situation in which one party in transaction has more information than the other. The party that is insulated from the risks generally possesses more information than the party paying for the negative consequences of the risk. Moral hazard occurs when an individual or institution does not take full responsibility of its doings. In other words if failure occurs they will be bailed out as witnessed in the current crisis. Samuel Gregg (2009) explains the importance of the word ‘moral’ attached to “Hazard”. It reflects some innate, largely unexplained awareness that there is something morally questionable about creating situations in which people are severely tempted to make imprudent choices. Had the governments and Businesses taken moral hazard with a great sense of integrity and concern the current crisis could have been averted. What exactly we mean by “moral Hazard” in the context of the current crisis? It is a term used to describe those situations when a person or institution is effectively insulated from possible negative consequences of their choice. This enables them to be greedy and take more risks as shown by the crisis. Several attempts were made writers to fix this financial crime on individuals, selected institutions, and other participants in this game. Some scholars of the crisis have fixed it not on people but on the very idea of ‘Moral Hazard”.

One thing that was sadly forgotten during the crisis is implications of human development paradigm. The actors in the financial industry merely acted as ‘economic man’, solely motivated by the desire to maximize profit. The crisis of global capitalism demonstrates what Ivan Illich says “material development beyond a certain point does not bring human happiness; it causes frustration and eventual decay”.

Great talk. I’ve been beating the drum to our pastors that we can’t become paralyzed by the economic crisis, but rather continue to advance our mission. Our annual appeal’s success seems to indicate that the drumbeat is being heard.

Hope all’s well with you and the Conway clan.

Best,

Ray

Thanks.
Informative article.

Keep up the good work.

Joe Peters