Bail outs of the past encouraged imprudence, says John Defterios. He argues that any incentive to be prudent was greatly reduced by a government bail out. The airlines who are now in trouble have no incentive to take caution and save for rainy day. But he believes we should have made the system more resilient against future crises.
John Kay and Mervyn King talk about their book, Radical Uncertainty, with EconTalk host Russ Roberts. This is a wide-ranging discussion based on the book looking at rationality, decision-making under uncertainty, and the economists' view of the world.