No Cliff

The history of our times calls to mind those Walt Disney characters who rush madly over the edge of a cliff without seeing it, so that the power of their imagination keeps them suspended in mid-air; but as soon as they look down and see where they are, they fall. ~ Raoul Vaneigem

I find this statement as true now as it was when Vaneigem wrote it in The Revolution of Everyday Life. When I think of these characters, I picture the bankers most notably, but also average citizens who live beyond their means only to find the cliff ended a long time ago. I wonder what causes these people to act so irrationally and ignore reality, instead of doing what is rational.

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2 Comments on “No Cliff”

  1. David Says:

    Perhaps it is the belief that the bills will never come due. That there will always be another bail out. Only the federal government is now in the same boat.

  2. danielg92 Says:

    They are given unreliable information by a market (usually distorted by some government intervention or another). In the case of economic bubbles, when the fed sets a low discount rate and/or increases the money supply, the newly printed money is mistaken for money that people saved. It creates artificially low interest rates which allows loans to be given to firms that no one would have otherwise invested in. This produces a boom which finally turns sour when the supply of cash dries up and the investments turn out to be unprofitable.

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