Are we guilty of suspending logic?

Roger Schlesinger
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Posted: Jul 09, 2009 3:33 PM

I am just as big a critic of the U.S. Government's massive spending for questionable projects as anybody, and yet over my years on this earth, I have seen so many people either not using or not having common sense, that I can easily start moving the blame from the government (actually government officials) to just plain, garden variety people. Governments spend money supposedly to help their constituents get to a better place in life, but in reality, they actually spend to keep themselves in power. The government's spending therefore is a given. People's acceptance of this shouldn't be a given unless you can get them to suspend all logic in regard to the particular spending project. Unfortunately, I am beginning to believe it isn't a real struggle, nor a major illusion, to get Mr. and Mrs. John Q. Public to throw caution and thinking to the wind and move forward.

Let's look at a logical equation. It is reported that obesity can lead to diabetes and many other serious medical conditions. Therefore, it is reasonable to believe no one would go out of their way to try and get diabetes. Following that line of thinking, one might suspect diabetes would be on the decline as nobody really wants the disease. The most fit city in our country reportedly has 19% of their adults labeled obese. The percentage in our cities grows from there. Simple math will tell you that is 1 out of every 5 adults (approx.) in the best city, and it goes over 1 in every 4 adults in the worst cities. Does my aforementioned premise begin to seem possible?

People, as a whole, realize that seat belts help save their lives in both airplane and automobile accidents. One would surmise that everyone riding in an automobile or airplane would be wearing a seat belt. There is no reason for me to finish this logical exercise as we all know the statistics about accidents, injuries and death and seat belt usage.

When the President of the United States tells us that his plan for health insurance and the reformation of the health industry will save us money in the long run, without affecting our care, a logical person would look at the prior statements made by the President and compare them to the actual results and come up with a frame of reference as to his accuracy. Logical people might also check other places that have installed this type of plan and the experiences of the people in the countries where this type of plan has been or is in existence. Once again, I must point out the reality: our main concern is whether it is free and available to all who dwell in our land, citizens and non-citizens. Generally speaking, free is not a great way to judge the value of almost anything. One of the lasting memories I have of my youth was learning that free advice was generally not only worthless, it generally ended up costing a lot.

In my line of work, the mortgage industry, logic is suspended by far too many borrowers seeking the best deal they can get. One of my most read columns, One Percent Was the Culprit, September 2007, I point out that at least the simple majority of people who took this loan actually reported (I am not sure you can substitute the word believed for reported) that they were sure 1% was the interest rate. What other major purchase have people made, except for government motor's automobiles, could you get as low an interest rate for as long a period of time? I ask everyone who told me that they had this type of loan what they thought each month when they saw the balance of the mortgage going up, instead of down. They were as prepared for that question as Nancy Pelosi trying to explain how the C.I.A. lied to her.

People who take a bi-weekly payment on their mortgage will tell me, almost without exception, that it is the method of payment that reduces the balance of their loan more quickly. When I explain to them that they are actually making 13 monthly payments a year instead of 12, and if they would make two payments in January each year and one the rest of the months, they would be further ahead in paying down their mortgage than their bi-weekly mortgage plan, they are speechless. My thought, and not my question to these borrowers, is why hadn't they examined, looked into, investigated, and asked questions before making a move that doesn't produce the desired results compared to simpler options.

I am always amazed by those who want to refinance their 30 year fixed to another 30 year fixed to save money. When one borrows $200,000 they pay $200,000 back plus the interest for the time that the loan is outstanding. If you have made 5 years of payments on the 30 year fixed and refinance to a lower payment, you nevertheless are setting yourself up for additional interest payments as you have extended the loan another 5 years.

There are ways around paying extra such as keeping the payment the same on the new loan, or selling the place in a few years. This doesn't take away from the fact that the premise is incorrect from the start.

I could go on for days, weeks or months (but I won't), or maybe write a book about this (which I might). Why are simple ideas so confusing to the average bear? Perhaps it is because we are so accepting about the fact that people aren't hungry for knowledge.

They would rather fantasize about dancing with the stars, shoot baskets with LeBron and Kobe or maybe consider the opportunity to play chess with Joe Biden, which is something I would pay to see.

Quit worrying about all your freedoms like the right to bear arms, right to worship and all the other basic rights, and start worrying about the fact that if all of us don't act on the right to think, all the others won't matter.