Post an approximately 300-word response to the suggested discussion question. There are a number of ways to approach this assignment: consider the reading in relation to its historical or theoretical context; write about an aspect of the week’s reading that you don’t understand, or something that jars you; formulate an insightful question or two about the reading and then attempt to answer your own questions; or respond to another student’s post, building upon it, disagreeing with it, or re-thinking it. In any case, strive for thoughtfulness and nuance.
Suggestion Discussion Question: During the financial crisis of 2007-2009, the U.S. government bailed out some financial institutions while allowing others to fail based on the argument that some institutions are “too big to fail.” Experts generally agree that government bail-outs of private financial institutions lead to “moral hazard” problems (i.e., a financial institution has an incentive to take on more risk not less when it knows it will be saved). Please comment on the appropriateness and effectiveness of government bail-outs of financial institutions. Explain your opinions and provide supporting evidence.