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Why taking risks may save us from the next financial crisis 

December 29, 2015

Kai Ryssdal, MarketPlace

Nobody wants bad things to happen, whether it's natural disasters or financial ones, but what happens when crisis prevention takes risk right out of the equation? The Wall Street Journal’s Chief Economics Commentator Greg Ip has spent some time pondering that. His new book is called Foolproof: Why Safety can be Dangerous and How Danger Makes Us Safe.

On making ourselves safe:

Oftentimes, when we’re trying to make our economy, our environment, ourselves safer, we’re actually doing things that may make us complacent or take more, different risks and end up having different types of disasters. That was the story of the financial crisis. We dealt with the risks we knew like inflation and recessions and bank failures and in the process, we encouraged people to think that we had made recessions and financial crises a thing of the past and encouraged them to take more risk. Just think about driving on a snowy road with snow tires. You have more traction so you drive a little bit faster, which works great until you spin out and your accident is worse. Read more

 
 

 

 
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