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The housing bubble mentioned yesterday has provided us with another example of the stasis fallacy. Again, we assumed that changing the rules (home mortgage regulations) would not have an impact on the individuals who were involved in the process.
My first encounter with the stasis fallacy was the flawed welfare system as described recently by Barack Obama : "Well, you know, here's what I would say. I think we should acknowledge that some welfare programs in the past were not well designed and in some cases did encourage dependency. As somebody who worked in low income neighborhoods, I've seen it, where people weren't encouraged to work, weren't encouraged to upgrade their skills, were just getting a check, and, over time, their motivation started to diminish. And I think even if you're progressive you've got to acknowledge that some of these things have not been well designed."
I am impressed by that straight forward acknowledgement.
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Medal of Honor Tuesday: Army Sgt. Joe Hayashi
6 hours ago
That Evil Wall Street – Wall Street has been continually demonized by both parties and most of the press since late 2008. Still most of us set on the sidelines secretly rooting for Wall Street to make our 401Ks return to 2008 levels and beyond.
ReplyDeleteTo tie together yesterday’s post on the housing bubble, today’s follow-up post and the “stasis fallacy” I offer the following.
Between 1998 and 2008 Wall Street was making money based on the rules they were given. What’s wrong with that? As a point of logic wouldn’t the “stasis fallacy” point to the rule makers as the root cause of the financial (housing bubble included) problem?
p.s. I have not yet found a copy of “Reckless Endangerment” - perhaps that is what the book is saying as well.