“A real disdain for moral hazard”

"We are witnessing what I think is the final cathartic rehabilitation of the financial industry. It is violent, and this is something everyone feared but many expected would come, and I think it is the result of years of excessive risk-taking, cheap credit, a sense of invincibility among lenders and a real disdain for moral hazard." Bernard Baumohl, chief global economist for the Economic Outlook Group in Princeton, New Jersey

I know precious little about "risk taking" when it comes to financial planning. I understand even less about "cheap credit." But I have some familiarity with delusions of "invincibility" and "disdain for moral hazard." Exactly what choices and practices the speaker was referring to with that last condemnation I can only guess, but his comments helpfully liberate the notion of "morality" from the prison of personal sexual behaviors. That's not to suggest that our sexual behaviors are somehow exempt; it is only to admit, perhaps sheepishly, that morality is finally about that broad and old-fashioned notion of "right and wrong" – applicable to every aspect of personal, but also corporate, behavior. Faithful people have understood for generations that how we use our assets – how we buy and sell and borrow and lend – has moral implications, but we demonstrate an amazing penchant for compartmentalization when it is convenient. "That's religion; this is business." Or politics. Or war. Or whatever else we don't want to be inconvenienced to think too deeply about.

Earlier in the summer, when a "kosher" meat-packing plant was raided by immigration authorities and subsequently cited for flagrant hiring and even of abuse of undocumented workers and minors, a Jewish opinion writer in the newspaper wondered aloud exactly what it means to be "kosher." Is it just about the way we handle meat, he asked, or does it also implicitly mandate the way we treat people? Is it, in other words, merely a technical issue, or is it also a moral one?

Jesus asked the same kinds of questions when it came to Sabbath keeping. Could it be, in some situations, that we end up violating the intent of the law by considering only the letter of it? Could immorality actually be the result of following the rules?

The financial markets and newsmakers have apparently done nothing "wrong." I haven't heard allegations that laws were broken. Everyone seems to have behaved quite legally – only, and unfortunately, immorally. Money is a seductive thing. We forget that what we do – whatever we do – has consequences. Life is never free of risk, and sometimes the risks are prudently taken. The hell of the present moment is that we are forced to sit in a front row seat watching the consequences of one of those "other" times – when the risks involved should have been told "no."

For financial reasons, to be sure…

…but for moral reasons, as well.