The risk must be borne by those able to manage it best

A central tenet of risk management is that the owner of the risk should be the party best able to manage it. This can easily get forgotten during contract negotiations when each party tries to transfer as much risk as humanly possible to the other regardless of whether the other party can manage it or not. Having the best negotiators and lawyers means that you can win the battle but lose the war. This is often the case in large projects that go wrong. The principal transfers the risk to the contractor. The risk materialises, the contractor has either not recognised and accounted for the risk or has no ability to manage it and was hoping for the best. The contractor goes belly up or the project gets bogged down in costly dispute resolution. Hard to pick a winner in that scenario.

The various financial bailouts occurring around the world are another example. There are many well run companies - financial and non-financial - that can weather this crisis. The bailouts are not for them. They are for the ones that can't. The ones that made reckless or poor decisions and couldn't manage their risks. Likewise individuals that borrowed beyond their means, took out margin loans or have huge credit card debts. Interest rates are being lowered which eases the squeeze on them. The ones that didn't take those risks are losing out as their savings returns diminish and are even eroded by taxation and inflation.

And the net result is a lowering of personal responsibility. The bailed out party expects to be saved the next time. The more prudent pack it in and join the party. We don't manage our own risks anymore.