We've been hearing the term "moral hazard" a lot lately.
The talking heads on TV apply it to economic risk in
business. They tell us people have to be willing to accept
the consequences of their risks. Letting people "fail" in
business serves as a cautionary tale for others. It is a
warning sign that points out the "moral hazard" of foolish
I agree with that.
Business executives take risks with other people's money. In
the right context, that is a good thing. But the huge
financial rewards of business have often been so seductive
that some people ignore the hazards until it is too late.
Business executives are no different from the rest of us in
this regard. We all have moral hazards. Even good things can
be dangers if not controlled.
Among the moral hazards I've been hearing a lot about in
confession and counseling, there are three good things that
can be turned to evil ends: the Internet, credit cards and
More and more people are confessing sins related to the
Internet. The most common is an addiction to Internet
pornography. This is not just a problem for young people or
for men. It troubles everyone.
In another era people had to leave the home to find
pornography. Now it comes right into the seemingly safe
confines of their home. People can get caught up in a
terrible web of addiction to Internet pornography. I've
spoken to people who spent thousands of dollars and hours
online. They have lost themselves to this moral hazard.
Sometimes I tell them to get a filter or move the computer to
a more public room. Sometimes I tell them to cancel their
home Internet and only use a laptop in public places as a way
of taming their demon.
Often they resist these ideas.
The Internet can be a moral hazard in other ways; it can take
up people's whole lives.
I recently talked to a wife who said she had absolutely no
communication at home with her husband because he was always
on the Internet.
Credit cards are also a moral hazard. We see that in the
current economic crisis. People are hopelessly in debt for
purchases that are worthless.
Recently I talked to a man who was suicidal over his credit
card debt. He had put $50,000 on the plastic.
Credit cards, combined with the Internet, are a lethal
cocktail. Again, people don't even have to leave their homes
to waste money.
Recently I imposed a penance on a lady who had an addiction
to online shopping. We cut up her credit cards in a sort of
modern "exorcism" of her demon of avarice. She literally
cried as we snipped up the plastic.
Another moral hazard is the danger of prescription drugs.
Like all temptations of the devil, it starts out innocently
enough. People start taking pills for back pain or to recover
from some surgery. But before they know it, they are addicted
to OxyContin, Percocet or similarly powerful pain killers.
One policeman in my parish called them "suburban heroin." One
poor family spent as much as $7,000 on prescription drugs in
a single month. Prescription drug addictions can bankrupt
families and ruin marriages.
Moral hazards abound.
Even apparently good and useful things like the Internet,
credit cards and prescription drugs can be moral dangers if
they are not controlled by the virtues of temperance and
The people on Wall Street may not have to bear the
consequences of ignoring moral hazards, but the rest of us
don't have that luxury.
Fr. Daly is pastor of St. John Vianney Church in Prince