Role of Government when all else fails
An interview with HBS professor David A. Moss who has written a book on the government's role as risk manager, especially when all else fails:
One of the things that a historical perspective helps make clear is that risk management has always been an essential function of government. From the very earliest days of the American Republic, government policymakers have actively managed risk in the private sector—shifting it from one party to another, spreading it out over large groups, and (in some cases) simply reducing it outright. These policies, in turn, have profoundly shaped the environment in which business operates.
Public risk management itself has obviously evolved and expanded quite considerably over time, such that now—at the dawn of the twenty-first century—it is hard to conceive of any more important or pervasive governmental function. The federal government now devotes a larger part of its budget to social insurance (such as unemployment and old-age insurance) than to anything else, including defense. In several critical sectors of the economy, including banking and private insurance, federal and state governments act as insurers of last resort, assuming literally trillions of dollars in contingent liabilities. Whether you like it or not, the nation's product liability system, which shifts risk from consumers to producers, has dramatically influenced the calculus of production in a large number of industries. Our federal disaster relief policy, meanwhile, has likely affected housing patterns all over the country. In fact, the list just goes on and on. Risk management truly is a critical—and extremely powerful—function of government.