Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe ★★★ by Greg Ip

This isn't the type of book that I would normally read however, it was selected for my Book Club and the title did catch my interest.  That said, the first few chapters made me feel that I was back in Economics class in college and that wasn't pretty. However, as I got into the book I found that the areas that were discussed were extremely  thought-provoking.

The first several chapters dealt with risk involved with money - stocks, bonds, Federal Reserve and how it tries to control inflation and making our assets safer.

Quoting the book I found this part about political interference regarding the changes in bank loan requirements which eventually caused some of the sub-prime mortgage fiasco very enlightening and expect that many Democrats will disagree with what was said.
"Brad DeLong, an economist at the Univ of Calif at Berkeley, who had served in Clinton's Treasury from 1993 to 1995, described many years later why he and his fellow Democrats pushed deregulation (for home loans): "It had been more than 60 years since financial disruption had had more than a minor impact on overall levels of production and employment....The poorer 2/3 of America's population appeared to be shut out of the opportunities to borrow at reasonable interest rates... Depression-era restrictions on risk seemed less urgent, given the US Federal Reserve's proven ability to build firewalls between financial distress and aggregate demand. New ways to borrow and to spread risk seemed to have little downside....it seemed worth trying.  It wasn't."
Financial issues were also low-balled concerning the threat of baby boomers approaching retirement without sufficient savings.

Other areas of interest that were highlighted included:
1.  Football and hockey helmets and how they have changed the amount of risk that players accept
2. anti-lock brakes and seat belts and how they should have made driving safer but may have only increased the risk level that a driver will take   (I found it amusing that New Hampshire is the only state that does not require seat belt usage - their Motto -Live Free or Die.)
3. FDA new drug approval - is faster with higher risk from possibly dangerous drugs better than slower and  less risk that bad drugs will reach the market?
4. Natural disasters and their increasing costs - Hurricane Katrina and Superstorm Sandy impacted millions of people and climate change was touted as partially to blame but what about the decision of a growing population to settle and build in areas that are not really conducive to settlement?  If an area is repeatedly wiped out by hurricanes and other powerful natural occurring events, should the government continue to provide subsidies to rebuild?

I kept reading wondering if I had a choice how much of a risk was I willing to take? Would I build my home in a floodplain or near a forest subject to wildfires or on a cliff with regular mudslides?  If my home had been destroyed, would I rebuild in the same place?

It appears that as we increase the safety in our society we are counterbalancing by increasing the risk as well.  Is this a good thing?

I won't say this was a great book, at times it was hard to keep going, but it did give me lots to think about.

DATE READ: March 10 - March 19
Type of Book e-book
SOURCE: Barnes and Noble

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