Optional Illusions

[coberst]

Optional Illusions

The traditional mode of thinking (as opposed to Critical Thinking) assumes that today was like yesterday and tomorrow will be like today. In a world that changes, and change itself is an abstract idea, the world does not stand still; for the traditional thinker the response might be “stop the world I want to get off.

In the world of change we are obliged to simplify where possible; in such a world we must generalize, form abstractions, simplify, create causal laws, and all kinds of means to live in a world of seeming chaos and confusion.

Thought processes that we engage to help simplify are often the very process that makes things more difficult to comprehend and to manage. We humans are abstract thinkers and thus we introduce a new can of worms with which we must deal. In a world of abstract thinking we constantly create varying aspects to reality. Reality does not stand still but moves about and evolves.

All of these modifications of reality, introduced by abstract thinking humans, show us that there is no clear cut separation between fact and fiction. There is no understanding of abstract ideas without the aid of metaphors. Metaphors allow us to communicate by way of linguistics that tells others that X is like A, ‘know is see’ and ‘understand is grasp’, see what I mean?

In a changing world we must be constantly ready to make judgments between options and to recognize when we are dealing with true options and not just optional illusions.

“Why We Borrow Until It Hurts—an article in Sunday’s Washington Post says:

“Seeing Zero Percent Interest Until Next Year! on envelopes causes us to tear them open, find the Web address, enter some information and send new credit cards hurtling toward our mailboxes. Financing cars for three years is so passe; we finance them for six or seven. And now we buy -- or used to buy -- houses with pick-your-payment mortgages. We are leveraged from here to China. U.S. consumers spend more than 14 percent of their after-tax income just to stay current on household debt.

The question worth asking now is: Why do we love leverage so much that it hurts?

The simple answer, according to personal finance experts, is that we want more -- more money, more house, more car, just more, more, more. We often think we deserve more. Leverage gets us more. With historically low interest rates, leverage is the easiest and quickest tool to get more stuff.

The problem is that too much leverage has a downside that is easy to overlook. When everyone else is using leverage so successfully to get more, do we wonder what will happen if interest rates go up? Not so much.