Unintended Consequences of Mortgage Foreclosure

June 4, 2009

by Mario Rizzo  

We are a serious bunch here at ThinkMarkets. We make major advances almost daily in all recognized realms of intellectual thought. So now it is time to illustrate the great principle of unintended consequences of human behavior in a very vivid way.  

A brilliant new horror movie was released on May 29th: Drag Me to Hell. It is the story of an ambitious bank loan officer who is keen to get a promotion. Her superior is looking for someone who can make difficult, but profit-maximizing, decisions. Enter now an old lady who has missed payments on her home. She had already been given two opportunities to make up for delays in paying her mortgage. Now she wants a third. The bank officer struggles with the matter – pitting her natural benevolence against the justice of contractual obligation. Since acting on the basis of the latter will improve her chances for promotion, she denies the woman’s request. At that point, all hell breaks loose.   

Forget issues of aggregate demand and wealth effects. Attend, instead, to the perverse multiplier of selfishness. If you like Ayn Rand this movie will drag you to hell.

5 Responses to “Unintended Consequences of Mortgage Foreclosure”

  1. Chris Braun Says:

    Having just seen the trailer, I think you might have this a bit wrong. The audience is clearly supposed to identify with the loan officer and her boyfriend. Boyfriend is the I’m-A-Mac guy, which says something about the intended audience for this film – young people with aspirations to have middle-class careers and lead middle-class lives. Everything is looking great until the irresponsible (and not very identifiable-with) one-eyed, rotten-toothed subprime borrower comes along and screws everything up with her subprime crisis. This threatens to drag cute loan officer, Mac guy and the audience members who identify with them to hell, that is to say, to a world in which middle-class jobs are much more scarce than they are today. Clearly the idea of career prospects is important here, as this is what the focus is on at the beginning of the clip (along with a reminder of how competitive things are getting for young aspirational types). This is surely what young people are worrying about right now, especially ones just entering or on the brink of entering the jobs market. I don’t think it’s about the evils of contractual obligation. Anyway, that’s what I got from the trailer.

  2. Mario Rizzo Says:

    You may be right. However, all good literature and sophisticated films admit of several interpretations.

  3. John Hall Says:

    Sophisticated films? This is by the guy who did the Evil Dead movies.

    Not sophisticated doesn’t mean bad, but 90% of horror films (like 90% of action films) aren’t sophisticated and not meant to be.

  4. Zach Caceres Says:

    Help! I’m being consumed by the slobbering, flame-ridden jowls of rational self-interest!!!

  5. Bogdan Enache Says:

    Ah…the “seventh art” I consume on average 1 production unit per week, usually whatever Hollywood supplies, but sometimes I indulge my curiosity with exotic species, such as the overly subsidised European (sometimes Latin American) “film d’art”/cine arte/Essayfilm/cinema d’arte/film de arta etc variety of the same family, and occasionally I have also visualised even more rare productions – Chinese, Japanese or Indian. But, although I think one is better of watching La vita e bella or Andrei Rublev or Dr Strangelove, for instance, instead of paying the ticket to a museum of contemporary art, I rely doubt there’s such a thing as the seventh art. There was only an idea of a seventh art, in the mind of people such as Cocteau, Dali, Duchamps etc. A wish, nothing more. This is one area where the Frankfurt School, for instance, got things right.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: