risk and the american character

There is a recent article about the American character, how risk is inherent to it, how the history of the settling of the west symbolizes it and how federal regulations endanger it. The author's point is that regulation in the future will inhibit a successful aspect of the American character and impair our recovery. I, on the other hand, think the damage has been done; the current problems are directly attributable to the markets aversion to risk. There are countless factors in the economic disaster we are experiencing, and about to experience. The obvious are expanding credit/debt, the purposeful loaning of money to less than credit worthy people and the tremendous leverage that has developed in the economy (by that I mean using less and less assets to support more and more debt.) But I'll bet when the final assessments are written there will be a more basic culprit: the attempt to eliminate risk. This "risk" concept is essential to free markets. Every economic encounter should contain risk because risk is a proxy for responsibility. If you can buy a house with no money down and get 125% from the bank, you can walk away from the mortgage with 25% of the loan and put it in your pocket. No risk. No responsibility. On the other hand, the creditor is completely dependent on the good will of the borrower, as vulnerable as a woman in the street. Such thinking makes investment closer to theft. No wonder the creditor runs to homogenize the risk. And I will bet it is the underlying problem in the "illiquidity" of the economy: no one wants to give money in a culture that holds irresponsibility in such high esteem. Everyone wants to be as safe as possible but transactions that are risk less, like
other efforts, are worthless--or will prove to be. Life cannot be seen as
risk less. Nothing in, nothing out. The real question is if the risk aversion nature of our economy will supplant the the older pioneer quality of the country. That would be real change.