Moral Hazard

I don't know what eerie impulse caused me to reach Kate Jennings' novel, Moral Hazard down from the shelf last week. I had remembered from the publication interviews back in 2002 that it was about nursing a husband through Alzheimer's Disease but had missed its connections to Wall St. Moral Hazard forecasts the current shattering financial system with grim accuracy.

Cath enters the financial world to earn enough money to care for Bailey, her deteriorating husband. She learns that the market is free and supreme, hedges protect against outliers but are only perfect in Japanese gardens, bankers are in it for the short term gain and are as greedy and short-sighted as any Las Vegas gambler. Without regualtion a big-time melt down was inevitable.

Are we surprised that the house of cards we call the the financial system is collapsing? Global breath holding and nervous repair around the edges is only a temporary stay. The cards will be swept away in a gale of despair and disillusionment. Those who knew it was all a chimera sustained by collective delusion, testosterone and wilful ignorance of its shakey structure will probably live to build another way but what about the rest of us? Bailey's delusions were probably more valuable tools in dealing with the world than a non-regulated system of finance and development driven by greed and self-interest.