Moral Hazards

8-12-21

Moral Hazard…. What is that? lack of incentive to guard against risk where one is protected from its consequences, e.g., by insurance. We are less careful because we have it. Or its not out of pocket etc.

This is a finance term generally, but it can apply to many areas of life where not doing the right thing has no obvious personal consequences, but it will have moral consequences. Yet ignoring seems like a good idea since its not obvious. Skirting over the truth because you can. That’s a moral hazard. – not doing the right thing because no one is looking, and it will go unnoticed. That's a moral hazard.


Why do I tell the truth.? Why do I push you to hear the truth? Why do I look for the right timing to offer the truth?

My dad used to tell me if I got in trouble and told him the truth, I would not get a spanking. Even if I was wrong, because telling the truth and being disappointed in myself was enough punishment. He always held up his end of the bargain. Making me trust that telling the truth was the correct and right thing to do. That was my family of origin training. That was a core belief. Tell the truth.

As I got older, I realized that much of society does not tell the truth, yet expects others to tell them the truth (but only in certain circumstances). It took me awhile to figure out how to manage that disparity. I started watching people that lie to protect others, then the people that lie to protect self. Of course, there are people that lie for gain and people that lie just because they cannot tell the truth. There are even people that do not know the truth to tell it.

I found my dads words grounding but I still had to figure out where I fell in all of this. My parents tried to help me see a path, but they never told me what to think just a pattern to look at. My parents did not lie or cheat, so I always knew they were telling me the truth. Even if it hurt. They were honest people. That was their core belief. Truth was good.


I floundered around finding my own moral and ethical ground for a bit. But then…

At about 26 I was a supervisor at the hospital I worked. I was supposed to get a lady ready for a bronchoscopy for the next morning. Get her instructions and answer questions etc.

This was before they had flexible scopes, so it was a brutal procedure. Ramming a rod down your throat with minimal sedation. I say the supervisor part because it allowed me to think more highly of myself than I had any right to. I was still very ignorant of human nature. I know my job. I did not know life well. That is reveled a little each day we live. I didn't figure that out until about 40.


She asked me how bad it was. She was scared. I did not want to scare her more, so I told her it wasn’t that bad. (I lied). The next day I did her follow up care and as I started to walk into the room after her procedure. She stopped me at the door. She said “I do not want you to come in” I said I could come back in a bit. She said “no I do not want to ever see your face again, get someone else” I asked her if she could tell me why?... and she said, “because you lied to me- I could have been prepared but I was not, because you lied to me”.

I apologized to her and went to the bathroom and cried for a good thirty minutes. I felt horrible. It was at that moment that I promised myself that I owed it to people that I interact with to be honest. No matter how hard.

I protected her feelings, but I destroyed her trust. I made her experience far worse than it needed to be. she taught me a life lesson I will never forget. Of course, she couldn’t have care less about that.


That is why I am clear to those I interact with. I would much rather be trusted as an honest person than to be liked. People like knowing where they stand and then they can make their own choices where they want to be. Which I am very good with.

The reality is even if I had told the lady the truth going in, she would have been mad at me for being mean and scarring her and she might have declined the test that found her lung cancer. That is all true. It was a no-win situation. From that perspective. But from my not feeling like I did the wrong thing it would have been better to make her cry and figure out I was right. then make her smile and discover I was wrong or not telling the truth.


A moral hazard.


You are only responsible for your side of the fence. My not telling her the truth put me on the wrong side of the fence. We do not have the right to make someone else’s choices for them. The moral hazards just keep you on your toes. Stay on your side of the fence in your own lane and you have not caved to the moral hazard. It is a test.. and I hope you pass. If you have to retake it.. keep trying until you pass.