Invading Iraq -- the Moral Hazard

[highnote]

Interesting article about the "Moral Hazard" of invading Iraq...

http://finance.yahoo.com/columnist/article/economist/8060

[Indulto]

Interesting article about the "Moral Hazard" of invading Iraq...

http://finance.yahoo.com/columnist/article/economist/8060
SJ.
Thanks for the link. The idea definitely has merit.

[Tom]

No offense, but that one of the dumbest article I ever read. The guy made no sense at all. Just another feel good liberal piece.

so his insuracen might have to pay off his car - that's what he pays premiums for. If it isn't stolen is the insurance company having a moral crisis for accepting money for him and then having him look out for them?

Should we draft women, children, snnior citizens too? Don't THEY constitute the same people he wonders about? Should 80 year old grandmothers share the risk in order to have an opinion?

A current example of the opposite is John McCain - his son is going over most likely and he still supoports the war. What the article ignores is integrity and ethics. l

[Secretariat]

Good article. The cost of war economically is astronomical. Emotionally, we see the shattered lives which is devastating, but the cost of maintaining our armaments, and rebuilding infrastructure is overwhelming, and will be for years. No wonder we will see red ink as long as GW is in the WH.

[Indulto]

... Should we draft women, children, snnior citizens too? Don't THEY constitute the same people he wonders about? Should 80 year old grandmothers share the risk in order to have an opinion?

A current example of the opposite is John McCain - his son is going over most likely and he still supoports the war. What the article ignores is integrity and ethics. lWhy does the father get any credit for the son's action? The kid is more aware than most of the risks and merits of what he's doing and he made up his own mind despite his fathers suggestion that it might be youthful misjudgement.

Much of our failure to agree as citizens could be because we don't know how to share responsibilty. Compulsory public service -- including military service for those most capable of performing it -- might instill more personal pride and responsibility among young adults, generate greater respect and cooperation between ethnic and demographic groups, increase preparedness to deal with personal and natural disaster, and result in less corruption in government.

As far as older citizens are concerned, what problems do you see with enabling greater participation for societies' collective benefit? Or is this going to turn into another socialism versus capitalism debate?

[JustRalph]

:sleeping:

[highnote]

No offense, but that one of the dumbest article I ever read.

No offense taken. I didn't say I agreed with it. I just thought it was interesting -- food for thought, if you will.


The guy made no sense at all.

What do you expect, he's an economist.

Some of it didn't seem logical to me. But I liked the fact that he had a different approach. You don't read many articles on the topic of compulsory service. Probably because it's not popular and because we have so many other things to think about these days.

so his insuracen might have to pay off his car - that's what he pays premiums for. If it isn't stolen is the insurance company having a moral crisis for accepting money for him and then having him look out for them?

HAHAHA. Good point. I actually gave this some thought (not much, albeit). I agree with you here again. He pays the premiums. It isn't his fault the school didn't offer adequate parking. Maybe the school is guilty of being greedy and taking too many students. But that's a different issue.

He says he wouldn't have parked there if he didn't have insurance. Hell, if he didn't have insurance, I hope he wouldn't be driving.


Should we draft women, children, snnior citizens too? Don't THEY constitute the same people he wonders about? Should 80 year old grandmothers share the risk in order to have an opinion?[quote]

No, because everyone will have served their time or will serve their time when they are of age.

[quote]A current example of the opposite is John McCain - his son is going over most likely and he still supoports the war.

I was surprised he didn't mention that example. Maybe the article was written before McCain's son's news appeared.

What the article ignores is integrity and ethics.

You read this differently me. I thought just the opposite on this point. I thought that integrity and ethics is what the article was about. I thought that he was saying that wanting to fight the war by proxy shows a lack of morals (ethics) -- and certainly a lack of integrity.

Overall, I give the article a "C" or maybe a "B-". I'm surprised this essay was even published. The best thing about the article is it's premise -- "Moral Hazard" -- and I don't even think it's his idea. He tries to show examples of "Moral Hazard". However, his argument that parking in a "dodgy" neighborhood and hoping his car isn't stolen because he'd feel bad that the insurance company would have to pay for it when he could have arrived to class earlier and parked in a safer lot is weak. Besides, the hassle of losing your car, trying to collect insurance which would probably be less than the value of the car is no picnic either.

We take risks and we have risks. That is why we have insurance. Everytime we pull out into traffic we hope the car doesn't stall. Should we not drive because the possibility exists that our car will stall and we'll get hit causing us and maybe someone else great bodily harm? No. Of course not. That's why we have insurance.

[Tom]

John,
I know you meant it for discussion - just wanted you know I was talking about the article, not you. :ThmbUp: Your second post was a different take than mine, so I appreciate your thoughts. The idea of a discussion is good, and relpies interesting, except, that is, Sec's standard parrot reply, devoid of anything past party drivel.

Indulto - my point was that McCain now has a personal stake in the war and has not changed his support. Isn't that what the article was suggesting - if we had a draft, would people still support it?
I would say sending your kid off to war is about as big a stake you can have in a war, unless you go yourself. Obviously, both McCains have the courage of their convictions.

[Tom]

Much of our failure to agree as citizens could be because we don't know how to share responsibilty. Compulsory public service -- including military service for those most capable of performing it -- might instill more personal pride and responsibility among young adults, generate greater respect and cooperation between ethnic and demographic groups, increase preparedness to deal with personal and natural disaster, and result in less corruption in government.



I guess you missed the 70's......draft, fragging, legendary corruption, double digit inflation...gas crisis. the draft nearly tore the country apart.
The idea of an all volunteer army is that only those who are committed to the cause go over. Nobody in the military today was forced to be there, and all last eithier enlisted or re-upped knowing full well about the war on terror. We are not seeing mass protests, street violence, etc. like the draft brough about in the 70's. The protests to this war are NOTHING compared to back then. Start a draft and watch out.
And as far as public service goes, I pay taxes - that is more than enough. How aobut mandatory service for those NOT paying taxes?

[Tom]

Good article. The cost of war economically is astronomical. Emotionally, we see the shattered lives which is devastating, but the cost of maintaining our armaments, and rebuilding infrastructure is overwhelming, and will be for years. No wonder we will see red ink as long as GW is in the WH.

How does this relate to anything in the article?

[Show Me the Wire]

An article based on faulty assumptions, taking no action we will keep our children safe and it is immoral to ask other people to fight, if the recipient of the benefit actually does not risk danger.

The first assumption is faulty as there is no guarantee by not sending in paid professionals that the nation's children would be safe from the risks of violence.

Further, the author states the U.S. has the most sophisticated military in the history of human civilization. As aneconomists he should understand the effiency of the market.

It is a professional army consisting of mainly dedicated people that wish to excel in their profession created by market effiency. It is not an ineffective military based on involuntary servitude. The elimination of involuntary servitude reduces the numbers of disgruntled workers and their demoralizing effect on the organization. I credit the volunteer system as the cause of bringing about the most sophisticated military.

The second assumption is equally wrong. It is the moral duty of the stronger to protect the weaker. The author's faulty thinking is illustrated by his inclusion of Darfar and Somalia. The problem is not protecting the innocent from slaughter, which is morally correct, it is the lack of commitment to the effort. The lack of commitment, whether grounded in lack of understanding, or political, is the cause of unnecessary loss of life.

In fact he does not understand morality. There are different tpes of marality and he mischaracterizes each of them.

Faith based moral behavior is based on the concept of respect and belief in good and evil. Faith based morals are not based on risk of physical risks to the physical body.

Additionally, if he is discussing secular (societal) morals he again demonstrates his lack of understanding. Society accepts the behavior of sending someone else in harms way in armed conflicts. Society does not condone the use of surrogate fighters in bar fights therefore, and is morally unacceptable.

The contrast of these two societal views regarding armed conflict and bar fights is based on the norms of society. The norms of society decide morality in the secular view. If a society believes eating human flesh is beneficial then cannibalism is morally correct.

It is apparent from this article the author does not understand the concept of morals by attributing the concept of insuraning against risk as the basis of creating morals.

[Indulto]

I guess you missed the 70's......draft, fragging, legendary corruption, double digit inflation...gas crisis. the draft nearly tore the country apart.Tom,
It wasn’t the draft that tore the country apart, it was our participation in an unjustifiable war that wasn’t winnable.

The idea of an all volunteer army is that only those who are committed to the cause go over. Committed by contract assuming competent leadership, but not necessarily by conviction in the cause of a particular deployment.

Nobody in the military today was forced to be there, and all last eithier enlisted or re-upped knowing full well about the war on terror.???????

We are not seeing mass protests, street violence, etc. like the draft brough about in the 70's. The protests to this war are NOTHING compared to back then. Start a draft and watch out. Ditto my first response. Plus the current administration has effectively muzzled protest by limiting privacy and other personal freedoms (except, of course, among illegal aliens and other non-citizens :( ).

And as far as public service goes, I pay taxes - that is more than enough.That’s the problem, the tax liability of many is disproportionate to their benefit and/or responsibility.

How aobut mandatory service for those NOT paying taxes?I don’t necessarily disagree with that, but at least raise the minimum wage AFTER solving the illegal immigration problem so there IS some tax liability. ;)

[JustRalph]

The war in Vietnam was winnable. Our desire to win it was undermined by a movement of Lunacy. LBJ and his brethren committed the same mistake (or vice versa) that Bush and his cronies are committing right now. They are trying to fight a surgical-low impact war. Once again we repeat our history because of politics and bad judgement. The war is fought through the prism of the newspapers and television sets at home.

anybody ever wonder why the only surviving communist countries are in Asia? Except Fidel and his little island that is. Not counting Canada, for those scoring at home...........

[46zilzal]

The war in Vietnam was winnable.
over 45,000 dead and you make it sound like a football game.

A mistake from DAY ONE.

"A movement of lunacy" finaly broke this idea that the governement was telling us anything close to the truth. Folks did not want to be cannon fodder and spoke up.

[Indulto]

The war in Vietnam was winnable. Our desire to win it was undermined by a movement of Lunacy. LBJ and his brethren committed the same mistake (or vice versa) that Bush and his cronies are committing right now. They are trying to fight a surgical-low impact war. Once again we repeat our history because of politics and bad judgement. The war is fought through the prism of the newspapers and television sets at home.JR,
I hate to waste any energy I have left to protest the Iraqi invasion/occupation on the memory of our action in Viet Nam, but let's not forget Nixon's/Kissenger's contributuon to that debacle.

[46zilzal]

JR,
I hate to waste any energy I have left to protest the Iraqi invasion/occupation on the memory of our action in Viet Nam, but let's not forget Nixon's/Kissenger's contributuon to that debacle.
an idea he had BEFORE his presidency: "In 1954, when the French pulled out of Vietnam, Nixon was Eisenhower’s Vice President and the first senior elected politician to speak in favor of sending American troops the Indochina. Nixon praised himself as the politician having visited Southeast Asia more often than any other. His approach, however, was determined by the Domino Theory, which he strongly believed in."

[Show Me the Wire]

Vietnam, yes a mistake from day one. Never should have had a military presence there in the first place.

Military presence established under JFK, a democrat, to aid French economic interests. Vietnam was a French colony of 20th century colonial French imperilaism. JFK gave U.S. military aid to help the French out of a qaugmire and put the U.S. in harms way.

LBJ, another democrat escalated the war and put American soldiers in harms way through lies and manipulation.

Nixon inherited the choas created by JFk and LBJ. Nixon pulled U.S. troops out of Vietnam realizing the war was not winnable after all the miscalculations by the LBJ administration.

Nixon was the recepient of faulty U.S. policy his policies did not engage the U.S. in Vietnam it was the faulty policies JFk and LBJ.

So what do Nixon and Kissenger have to do with the subject article about morals being dictated by risk assesment?

Answer is nothing, except for spin attempting to deflect blame from the appropriate administrations.

[46zilzal]

first U.S. troops killed in Vietnam? 1959
Major Dale R. Buis and Master Sargeant Chester M. Ovnand become the first Americans to die in the Vietnam War when guerillas strike at Bienhoa.

# Ike pledged US support in letter to Ngo Dinh Diem Oct. 1, 1954, and his Catholic Saigon government imposed on 6 million Buddhists

# Ike supported Diem's opposition to elections, reunification, infiltration of communists from North Vietnam to assist southern National Liberation Front (NLF f. 1960)

It has a very long history over several administrations.

[Tom]

Weren't they advisors, not combat troops?

Actually, I thought JFK was getting ready to start pulling out, and that was one of the conspiracy theories of why he was assasinated?
Weren't orders reveresed as soon as LJB took office?

[46zilzal]

But there was no fixed beginning for the U.S. war in Vietnam. The United States entered that war incrementally, in a series of steps between 1950 and 1965. In May 1950, President Harry S. Truman authorized a modest program of economic and military aid to the French, who were fighting to retain control of their Indochina colony, including Laos and Cambodia as well as Vietnam. When the Vietnamese Nationalist (and Communist-led) Vietminh army defeated French forces at Dienbienphu in 1954, the French were compelled to accede to the creation of a Communist Vietnam north of the 17th parallel while leaving a non-Communist entity south of that line. The United States refused to accept the arrangement. The administration of President Dwight D. Eisenhower undertook instead to build a nation from the spurious political entity that was South Vietnam by fabricating a government there, taking over control from the French, dispatching military advisers to train a South Vietnamese army, and unleashing the Central Intelligence Agency (CIA) to conduct psychological warfare against the North.


there is a famous interview with Cronkite where JFK says it is their war, they have to fight it.

[Show Me the Wire]

Once again what does the fixed beginnig of the Vietnam War have to do with the article in question and its assumption morals are based on risk assessment?

Nothing except spin. JFK's administration is looked upon by history as the true beginning of America's military involvement in Vietnam.

You are right Eisenhower opposed the plan, but his administration used diplomatic channels. Also you correctly pointed out the military personel were there to train troops not engage in an armed conflict. Real difference in training an army versus fighting alongside it.

For your edification about JFK's involvement:

In 1961, President Kennedy sent a team to Vietnam to report on conditions in South Vietnam and to assess future American aid requirements. The report, now known as the "December 1961 White Paper," argued for an increase in military, technical, and economic aid, and the introduction of large-scale American advisers to help stabilize Diem's government and crush the NLF. As Kennedy weighed the merits of these recommendations, some of his other advisers urged the president to withdraw from Vietnam altogether, claiming that it was a "dead-end alley."
In typical Kennedy fashion, the president chose a middle route. Instead of a large-scale military buildup as the white paper had called for or an immediate withdrawal, Kennedy sought a limited partnership with Diem. The United States would increase the level of its military involvement in South Vietnam through more machinery and advisers, but would not intervene whole-scale with troops [1]


As you can see JFK took the opportunity to change the original mission and put America in harms way.

And yes I Tom, I believe there was a conspiracy with LBJ being complicit about killing JFK because JFK changed his mind.

Then LBJ managed to escalate the war through lies and manipulation.

I ask once again what does Nixon, Kissenger and now Eisenhower have to do with the topic of this thread?

Nothing.


[1]The Wars for Vietnam , Vassar College

[OTM Al]

I think there is a bit of a misunderstanding here by some of you about what this guy is talking about. "Moral Hazard" is a term used by economists to describe a situation when people's behavior changes when the risks they face are altered. The insurance example is given because it was in the study of insurance markets that the phenomenon was first observed and modelled. Insurance companies when offering a policy must have 2 things occur. The policy must be priced in such a way that it is high enough company does not lose money but at the same time it must be low enough that consumers are willing to pay for it. Consumers will only be willing to pay for insurance if their expected happiness, or utility, is higher with the insurance than without it. If your chance of accident is fixed, no matter what, then there is no problem here. Either the conditions above can be met, in which case you buy insurance, or they will not, in which case you don't and both parties are at least as well off as they would be without any insurance market.

Moral hazard occurs however when one's chance of an accident is not fixed, which can be assumed a more reasonable modelling of the world. If we assume that keeping one's risk of an accident low takes effort and using effort takes away from other things you could do that would increase your happiness/utility, then the consumer has incentive, when insured, to no longer use any effort to keep his risks low, because no matter what, he's covered. This is very bad for the insurance company however, if they based the price of the policy on the individual's original level of risk, so they would lose money.

So what the author is doing here is trying to tie the concept of moral hazard to war. The premise is that our behavior would be altered if we were subject to the same risk as those doing the fighting were. I don't see this as much of a stretch. If I remember right this thought is very well spelled out in the novel "All Quiet on the Western Front" when the discussion goes to all the old men behind the lines encouraging the young men to go and fight.

On another note, insurance is a funny thing. In a way when you are buying insurance, you are placing a bet against yourself in that you are betting that something bad will happen to you. You are smoothing out your expected happiness/utility.

[Show Me the Wire]

OTM Al:

I understood he is equating apples to oranges. Pricing a product for sucessful marketing so that it would prevent its users from abusing the product (failing to keep his risk low) is not applicable to the morality of war.

Of course there is risk assessment in war (if you think you will lose, you probably won't go to war) and I agree some people may have a different attitude if more sacrifice would be etxracted.

But his conclusions are faulty.

[OTM Al]

No, you are still missing the point. Morality is not at issue here. "Moral Hazard" is simply what the concept of changing ones behavior as the risks one faces change is known as in economics. The thesis of the writer is that people's attitudes toward war may well change if their risks changed in a war vs no war situation. That is it. His conclusions are not faulty either. They follow from his model. If you disagree with what he says, then you must say that his model is the wrong representation of individual's attitudes toward risk in war. You would need to argue that everyone's attitude toward war is not influenced by the level of risk they face.

Sorry to be so picky, but I've done quite a bit of study in this area, so to me what he is saying has a very precise meaning whereas you are interpreting it differently.

[PlanB]

The Moral Hazard article was right on. Our military should be used almost
always and only in our USA defense. And our military should be expanded
to include help from older armchairs too. And only Congress should decide
if our military can go to WAR. IOW, we should tighten up how we use our
military flesh and blood.

[JPinMaryland]

Perhaps Al should have written the article because now I understand the argument being made. That was a good summary, there.

I guess the title: Moral Hazard is somewhat misleading..

[OTM Al]

I use to have to teach this stuff to undergrads and also was the TA for the PhD level microeconmics course at NYU. You had to know your stuff in both cases because undergrads always came up with these totally out of left field, yet sometimes very very smart, questions and when I was holding the recitation for the PhD students I was full well aware that there were a few of the students in the room that were better than me. You should see what I can do with this stuff if I have a good chalkboard......... :)

[46zilzal]

He was thinking about invading Iraq in 1999,” said author and journalist Mickey Herskowitz. “It was on his mind. He said to me: ‘One of the keys to being seen as a great leader is to be seen as a commander-in-chief.’ And he said, ‘My father had all this political capital built up when he drove the Iraqis out of Kuwait and he wasted it.’ He said, ‘If I have a chance to invade….if I had that much capital, I’m not going to waste it. I’m going to get everything passed that I want to get passed and I’m going to have a successful presidency.”

Herskowitz said that Bush expressed frustration at a lifetime as an underachiever in the shadow of an accomplished father. In aggressive military action, he saw the opportunity to emerge from his father’s shadow. The moment, Herskowitz said, came in the wake of the September 11 attacks. “Suddenly, he’s at 91 percent in the polls, and he’d barely crawled out of the bunker.”