On moral obligations
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| Wanna talk about moral obligations? Let's talk about restoring public pensions to terms promised by contracts |
Don’t make the mistake
of confusing the what the bond market calls a
moral obligation with
the more widely-held definition of the
term.
One may suspect that a
moral obligation as it applies to repaying the
38 Studios loan implies
that our shared concept of right and wrong compels us to make good on our word
to repay the debt we owe those who bought the bonds.
No, not at all
actually.
In the world of high
finance and big bond buying, a moral obligation simply means it may or may not
cost money to change one’s mind. It’s actually a misuse of both words in that
repayment has nothing to do morality, nor is it an obligation. It’s not even
apples to oranges.
It’s more like apples to poisonous mushrooms. It’s almost as if the fat cats of finance have purposefully perverted the phrase to further institutionalize our self-interest in serving the rich, but I’m sure an industry that is too big to fail would never stoop to such a tactic.
It’s more like apples to poisonous mushrooms. It’s almost as if the fat cats of finance have purposefully perverted the phrase to further institutionalize our self-interest in serving the rich, but I’m sure an industry that is too big to fail would never stoop to such a tactic.
Not at all to discount
what’s in our fiduciary best interest, but I think it’s a slippery slope when
we start confusing fiscal decisions with moral obligations. There’s even an
insurance product for this. You know your society is in trouble when there is
an industry that makes money off of the assumption that the government won’t
make good on a moral obligation.
That said, I’m really
hoping it ends up being financially advantageous not to pay the bondholders –
that way we can save money AND we’ll see who in Rhode Island is a real small
government conservative and who is acting like a friend to the taxpayer when
they are secretly just advocating for Wall Street and corporate America’s
interest in our state government.
Bob Plain is
the editor/publisher of Rhode Island's Future. Previously, he's worked as a
reporter for several different news organizations both in Rhode Island and
across the country.