In Part 1 of this post I gave a brief description of the credit crisis and the actions that the Treasury Department is taking in an effort to deal with it. A direct consequence of these actions is the creation of a “Moral Hazard” within the free market. A Moral Hazard exists when “the possibility that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk.” As the government, in the form of the U.S. Treasury, buys into an equity stake...