Risk vs Cost

One of the things that is different between the Government and private industry is profit motivation.

Private industry in order to exist must make money and in order to make money they have to sell a product at a profit.

This tends to make cost the most important factor in many decisions.

Government on the other hand is really about risk.

The risk to human lives, the risk to the environment, the risk to our national security.

Risk is a factor in private industry and cost is a factor in Government but facing the same decision about trading risk for cost (less risk more cost), private industry will opt for more cost in cases where Government will opt for less risk.

Of course the vast majority of decisions are probably decided the same by both, but in a few crucial one, one will accept a risk which the other will not.

Its hard to say what the better approach actually is, there is a risk of being too risk averse and never quite finishing and of course the other side risk is that we have breakdowns and human lives at risk.

I've read quite a few examples where certain industries determined that the cost of paying settlements would be less than the cost of eliminating a problem.

Of course the gamble is with us, the consumer, and the unlucky few that suffer the consequences will often never recover.

We are in a period where the current administration wants to eliminate as much Government as it can and rely upon private industry.  It probably will be cheaper but not necessarily better.

What is the risk of the banks regulating themselves?

I think 2008 might be the answer.