Default! Default!

Here's a philosophical principle from Immanuel Kant:

"Act so that the maxim of thy will can always at the same time hold good as a principle of universal legislation." (Critique of Practical Reason)

That sounds really fancy, as translations from the German often do, but it can be reduced to the proverbial mother's question: "What would happen if everybody did that?"

In other words, it's a bad idea to lie to other people, because if everybody lies to everybody else, society cannot function.

So, bankers and financiers are appalled, yes, appalled, that people are walking away from mortgages when they go "under water," i.e., when the value of the house is less than the value of mortgage. The borrowers feel that they shouldn't make $500,000 payments on a $200,000 house. And this behavior is something that violates Kant's principle (known as the "Categorical Imperative"). If, after all, everyone just defaulted on their obligations, your boss could just decide not to send out your paycheck next week, and then where would you be?

So, this article by Daniel Gross is about how common this terrible behavior is on the part of big corporations.

Are you appalled?