Can anyone explain to this dim liberal-arts major why credit default swaps aren't simply institutional, marketized, commodified moral hazard?

Say I'm pondering doing something madly risky, bordering on daft: like, for instance, radically expanding my trucking fleet in the face of a possible oil shock. I hedge against the chance of fuel costs wrecking my expansion by buying fancy financial instruments which promise to cover my losses in the event of a cost bump. My competitors, not wanting to get edged out, all do the same thing, resulting in a short-term profitable event for the financial industry as we all dump significant change into their hands. But we're all betting on a certainty, and the oil costs hit all of us at once, and we all cash in our swaps. Not only have we distorted the market in oil and shipping by producing an excess of road traffic & trucking and a shortage of fuel, we've also smashed up the bottom lines of the various firms which let us buy insurance on a self-fulfilling prophesy. It's even possible that the hedging helped *produce* the oil shock by distorting the market in the first place!

The only difference between this credit-default-swap business and a legislature interfering in the market by subsidizing fuel prices is that the newfangled method removes government entirely from the business of moral hazard: haven't they privatized hazard? Instead of buying a congressman to get a chance at cheap gas, I've bought a financial instrument from Wall Street! Either way, I'm socializing risk, and privatizing profit. I'm buying the opportunity to make *somebody else* catch the flack for my consequences, right?