Wednesday, September 22, 2010

Hooray for Foreclosure!

My Mother is going through a foreclosure on her mortgage. At some later date, after several forests worth of paperwork are pushed around a few government offices, she will be given a date to leave and the house will be auctioned. We will return to my Mother's situation an a short while.

I spent many years poorly arguing that the economic theories I knew were unsatisfactory. Microeconomics was never the focus of my debate, as it seemed rational enough that individuals and small groups would pursue their self interests. My trouble was with the absurd propositions directed towards the macroeconomic scale. I wondered aloud how we could expect to cure the monetary ailments of a society; I argued the futility of halting an economic downturn. Eventually all systems must balance.

What causes people to desire control? Why do we believe we can have perfect lawns and an economy that never fails to grow? What is this flaw that causes people to demand natural systems to yield to our desires?

Humans seek to manipulate and tame their surroundings. Keynesian theory supposes that we can tweak an interest rate every now and again, and perhaps if we get out facts laid out our efforts to save the economy would be a success. The economy can be impacted in this way; by the intervention of government we are able to pull the system away from its natural balance for some time. As false security builds the system becomes more stressed, and it is only natural that it should painfully drop to levels which restore the balance.

I don't know why my Mother surprised me with her response to the pending foreclosure. While I expected complaints about the fairness of such an act, I heard relief instead. "I can't afford this house, and I don't want another scheme to fudge numbers so I can stay here. I want a simple apartment that I can easily afford, and I think it would be nice if I could go out for coffee sometimes." My mother knows she took risks and manipulated the natural market. She knows it is best to liquidate and start fresh. Maybe some well articulated economist can convince government to return to this proven system.

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