FINANCIAL TIMES Column: …America matches this toughness with love. In the US, taking a risk and failing is not the end: there is honour in getting back up. Bankruptcy offers a new chance, and the culturally favoured response is to keep fighting. American economic dynamism owes much to this forgiving attitude to risk-taking.
Europeans regard insolvency with a much darker moral taint. To go bankrupt has traditionally been to be branded untrustworthy – a shame to hide by leaving business for ever, even (once upon a time) by taking leave of one’s life. This still shows up in such archaic rules as Ireland’s 12-year bankruptcy period (which is finally being reformed).
Paradoxically, this cultural allergy to failure leads not just to less risk-taking, but to policies that bail out those that do take big risks and lose. Europe finds the idea of default so intolerable that, in the current crisis, it has preferred to cover the debts of the bankrupt. It suffers as a result… (more)
EDITOR: Tell it to Gov. Tom Corbett. He is bailing out Harrisburg’s creditors with state and Lancaster money rather than allowing Harrisburg’s problems be resolved in bankruptcy court.
