risk and fragility

The more you try to de-risk a system, the more accident-prone it becomes, and the more damaging the accidents are....   By using interest rates and monetary policy to try to prevent recessions, central bankers are making the world less safe and more likely to have a horrible accident. They are making the financial system more fragile....

You might not believe that the world becomes more dangerous precisely because you're trying to make it safer. But studies show that after the introduction of seat belts, the number of car accidents went up. Why? Well, people must have felt that because the belts made them safer, and made accidents more survivable, it was OK to take more risks, drive faster and otherwise abdicate responsibility for their own actions....

[I]t's a psychological phenomenon we're talking about. If people are led to believe they are safer, they will quite naturally be less vigilant about risk. [A] sense of risk is a highly useful advantage in evolutionary terms. Risk tells you when something big is at stake and the quality of your actions and decisions matter. If you try to systematically eliminate risk from society -- even if it's out of good intentions -- you aren't helping people at all. You're robbing them of a basic instinct that promotes their ability to look after themselves....

--Dan Denning, The Daily Reckoning (May 8, 2013)