Rewriting the Rules: Families, Money and Risk

Over the past generation, an economic transformation has taken place in the heart of the middle class family. The once-secure family that could count on hard work and fair play to keep it safe has been transformed by current economic risk and realities. Now a pink slip, a bad diagnosis, or a disappearing spouse can […]

The Rising Risks of Rising Economic Inequality: Do Americans Care?

The increasing burden on individuals to finance periods of heightened insecurity and risk out of their own pockets is at the very heart of what Jacob Hacker calls the increasing privatization of risk. But the increasing privatization of risk is but one part of a larger transformation in American society, albeit a very central part: […]

Risk versus Uncertainty: Frank Knight’s “Brute” Facts of Economic Life

“…there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.”—Donald Rumsfeld “Ah, what a dusty answer gets the soul, When […]

Rising Angst? Change and Stability in Perceptions of Economic Insecurity

“Free agency is over. Layoffs are back. Many of the people losing their jobs are white-collar and college-educated. You could be next.” [1. See the full article “White Collar Blues,” by Betsy Morris, at http://www.fortune.com/fortune/careers/articles/0,15114,368503,00.html. (July 23, 2001)] —Fortune magazine, July 23, 2001 While academics argue over whether “real” insecurity has increased, Americans’ experience of […]

Identifying and Managing Household Risk: Lessons from Bankruptcy

Over the past several years, millions of individuals and families with middle class attributes have found themselves doing the unthinkable: filing for bankruptcy. We can learn a lot about household risk from these bankruptcy filers. By tracing their paths to bankruptcy, we can also see how households cope with risk in ways that may exacerbate […]

The Privatization of Risk and the Growing Economic Insecurity of Americans

When Hurricane Katrina ripped through the Gulf Coast in September 2005, leaving death, wreckage, and grief in its wake, Americans were reminded that risk is an integral element of everyday life. Natural disasters are a magnifying glass into popular perceptions of fate and responsibility, and in the aftermath of Katrina, it became clear that most […]

Catastrophic Risks: The need for new tools, financial instruments and institutions

The tipping point: Katrina exposes a new trend We live in a world that is increasingly uncertain. For the first time in history humans dominate the planet and yet, paradoxically, the success of globalization has increased the risks we face. Nature has raised the stakes. In 2004 a record number of hurricanes and typhoons struck […]