Risk Coefficients and Crisis Indicators: Organizing Risk With Liability

Financial reform proponents argue for an early warning mechanism.

Since crises cannot be prevented, being the result of an organized ontology and the business cycle, warning signals, according to Democratic lawmakers, need to be incorporated into the practical model that indicate a probable-risk coefficiency. When the risk is high, measures will be taken to reduce that risk, conserving the model that accumulates it. Its efficiency is then maximized with minimal risk.

The coefficiency is descriptively a command and control, organizational teleology. However, it will be disguised as a measure for controlling the exculpatory ontology of an unfettered free-market economics. It will be sold as the means for saving the free market when it is actually minimizing it to favor an economy-of-scale coefficiency that consolidates political and economic power (accumulating risk) into a crisis proportion.

The reform is not designed to diffuse risk, but to keep it consolidated. All the accrued benefits and detriments (the Hamiltonian hierarchy of incentives) are fully conserved and operational, but with a brand new wardrobe.

The intent of reform is to disassociate risk, like systemic risk, with liability. The risk coefficient is designed to limit the liability associated with accumulation of a benefit that, if not the result of a free-market ontology, has a highly probable retributive value.

An accumulated value at very high risk is likely to be retributed if not passed through a legitimacy of due process which the reform is to provide. The process effectively organizes the risk with the liability (a coefficiency) that scores the distribution of rewards and deprivations as legitimately true and final.

The risk, however, accumulates rather than dissipates, and allowing firms to consolidate into organizatins that are too big to fail is prima facie evidence of the crisis to be avoided.

If we really want to organize the risk with liability in order to disincentivize the accumulation of risk because there is no liability, we should ensure a free-market mechanism in priority. That is the change, the reform, we need.

The free market directly sanctions the risk with liability. It is a coefficiency to be supported, not resisted with the current reform being proposed which is to allow for failure without a free-market coefficiency.

Without plurality of industry and markets, allowing for failure is catastrophic because the risk accumulates into an economy of scale, or into a crisis proportion.

Risk is limited to the liability in a free marketplace. If the risk is being accumulated and shifted to the system in the guise of an unavoidable and exculpatory ontology, like we have now, the excess of risk to liability has a crisis coefficiency of 100 percent and indicates the lack of a true and legitimate free-market ontology.