Because the discussion was centered around the decision of whether policymakers should create said risk by reversing previous policies. The risk came from the choice of policy, not from the environment Bob was originally playing in.

Isn't a change in policy just another factor in overall risk? Why should anyone assume that policy will not change?

Implied volatility on buying a house is lower than on renting, we are discussing policy changes that cause realized volatility to be different. If you use the government to change the market then you cant claim “free market.”