I’m not kidding.

Now there are some nuggets of truth as a consumer who go from an unaffordable mortgage to affordable rent may very well have more disposable income, and the “credit card protection trend” does indicate a desire by consumers to protect their spending ability. However the overwhelming majority of people who are losing their homes are in such dire financial straits that the savings from renting will be swallowed up by debt and unpaid bills,  they’re not going to be running out and buying HDTVs. Chances are the financial damage of their foreclosure will be with them for years.

The credit card aspect is spurious at best as it’s probably more of a case of keeping the account current, as opposed to maintaining a large credit line that they’ll use to finance large purchases later on. Let’s not forget that most people fight tooth and nail to keep their homes, and are probably just triaging their debts when they choose their credit cards over the house they can’t afford. Furthermore supporting, encouraging, or hoping for fiscal irresponsibility is just patently fatuous, because our economy is suffering from that very thing right now.

In any event the reason I’m discussing this article is to highlight the kind of wrongheaded thinking that led to our current economic crisis, something I like to call “Fantasy Logic”. Simply put: you look at bad a situation and instead of accepting reality, you invent a fantasy where it’s positive and then reverse engineer logic that supports the fantasy. Think exotic mortgages, CDOs with inflated valuations and/or that allegedly removed risk, the belief that a housing downturn wouldn’t impact consumer spending, etc.