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A comment on Failure must always be an option.

Re:Failure must always be an option by minus1 on Sunday September 21, 2008 @11:35PM (#310794)
While I believe this article is a fascinating look at the bureaucracy at JPL, it is analogous to the mortgage crisis only in that it is an example of perverse incentives. Perverse incentives exist all around us, so I don't find this example particularly enlightening.

Some other examples of perverse incentives in systems: http://en.wikipedia.org/wiki/Perverse_incentive

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Re:Failure must always be an option by known on Monday September 22, 2008 @07:23AM (#311014)
http://en.wikipedia.org/wiki/Parable_of_the_broken_window
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Re:Failure must always be an option by mattmaroon on Monday September 22, 2008 @01:14AM (#310849)
Right, in the economic case, the perverse incentives were created by the market. The bailouts are only meant to stop the failure of our economy as a whole. That sort of failure must never be an option.
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Re:Failure must always be an option by nazgulnarsil on Monday September 22, 2008 @06:37AM (#310999)
not created by the market. banks took these high risk loans knowing they could sell them to fannie-mae and freddie-mac, who in turn knew they would not be allowed to fail.
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Re:Failure must always be an option by mattmaroon on Wednesday September 24, 2008 @04:55AM (#313334)
The loans themselves are only a tiny fraction of the problem. It's more the credit default swaps and other forms of gambling tied to the loans.
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Re:Failure must always be an option by DanielBMarkham on Monday September 22, 2008 @07:06AM (#311007)
Actually, weren't lending institutions required to loan so much to high-risk borrowers as a way to make sure more people had homes? Seems like I heard this was a requirement if the institution wanted to open new offices.
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