Day 61: Taxes.

“Taxes” with an empty checkbox has been on the top of our white board list for so long that the dry erase ink is starting to fade. We rode out that IRS extension to the end of the trail. Now it’s time to file taxes.

As an armchair economist, I love budgeting. I love personal budgets and agency budgets, revenue and expenses and forecasting. I love behavior prediction and externalities and applying formulas and charts and all of that good stuff.

So why do I put taxes off to the last minute every year? Why doesn’t the love for economics translate to taxes? Perhaps it’s a similar division along the line that makes us “algebra” people or “geometry” people. Or maybe disliking taxes is just embedded into the DNA of Americans because our tax system is so frustrating and terrible. Whatever the reason, I do put them off. The unpleasant chore defaults to Sal every year, which is probably unfair.

“Hey,” I say, “we should start our taxes.”

“Oh yeah, it’s almost time. I keep forgetting.”

“I could do them this year,” I say, in what I hope is a neutral, believable tone.

“Nah, that’s ok. I have all the stuff on my laptop anyway. I can do it this weekend.”

“Ok!” I say, a little too quickly maybe.

Thus, Day 61 of Shelter in Place finds Sal staring bleary eyed into his laptop, forms and receipts littering our table, painfully trudging through our financial life history of 2019.

 What am I grateful for today?

That Sal didn’t call my bluff on my offer to do the taxes.

What am I looking forward to after the Quarantine?

I am starting to wonder if there is an ‘after the Quarantine’ to look forward to – it seems we are headed instead for a gray area transition to something in between, without a clear ‘before’ and ‘after’ boundary. So maybe I should change this question again?

 

 

 

Day 56: Plausible futures.

As a next step in my Quarantine Study Group, I mapped out our household’s current strategies and how long they would hold out based on plausible futures*:

IMG-1077
Social science + graph paper = Real science.

Here’s how I got to this very depressing chart:

  1. Establish your objective. For this exercise, our objective is to ride out the pandemic / recession, avoiding financial damage.
  2. Create a list of “current strategies.” For us, that’s me working from home; Sal caring for the kids until Shelter in Place is lifted, then returning to work; hardcore budgeting and saving any extra $$ in our emergency fund; taking vitamins; etc.
  3. Based on best current evidence, map out plausible future scenarios on a time axis. I don’t have an epidemiologist or crystal ball** in the house, so I just try to recall predictions and theories from all the articles Sal reads and tells me about. I then throw them into three levels: “Low” risk level, “Medium” risk, and “High” risk. Low level would be a recession with some resurgence of partial Shelter in Place (SIP), a vaccine within a year, and partial economic recovery. High level would be prolonged recession that morphs into a depression, multiple SIP events, and no vaccine within a year.
  4. Chart how long your current strategies will continue to be effective with each plausible scenario. For the Low level, our current strategies will work fine for the duration of the timeline. At Medium level, our strategies could last about a year. At the High level, we’d better come up with different strategies!

Next step is laying out “trigger points” and mapping them in this chart. Trigger points are when we would need to switch to a new strategy. This might be a signal that a depression is imminent, or news of a vaccine becoming publicly available, or announcement of a Shelter in Place order.

*I’m practicing questions and methods (albeit roughly and likely poorly) from this book: Decision Making under Deep Uncertainty: From Theory to Practice. Editors: Prof. Vincent A. W. J. Marchau, Warren E. Walker, Pieter J. T. M. Bloemen, Dr. Steven W. Popper. Chapter 9.4: “Applying DAPP in Practice.”

**If you are an epidemiologist or crystal ball professional, please do offer critiques.

What am I grateful for today?

Graph paper.

What am I looking forward to after the Quarantine?

Getting a haircut.

Irrationality Assumption

Freelance writing requires a digital workhorse, and my Asus netbook, running Windows XP Student Edition, is a tired old mule. It’s bluescreening out of spite and taking 30 seconds to like, open the control panel. I’m pushing it too far and too much, I know. It’s time for an upgrade. A rational person at this point  buys a new laptop and ends the story.

Here’s what I’ve done:

1. Research: My hacker cousin messaged me a list of laptops. Good start!

2. Budget: Consulted with the Budget Committee (my husband, Sal) and line-itemed the purchase.

3. Store: Fry’s Electronics, because they are nice to me. They have a rodeo theme. That’s quirky and fun.

This was all decided days and days ago. So why am I typing this blog on Mr. Bluescreen? Why am I flailing my arms at him, stomping around, making idle threats?

Why haven’t I bought a new computer?

It’s a phenomenon of purchasing behavior that economists have missed. I know this because there’s no sexy term for it.* It goes like this: you know you should upgrade a thing – you’ve calculated the benefit / cost ratio and rationally it makes sense. But the one-time hassle cost of the purchase looms in your perception as greater than the accumulation of 30-second mini agonies of your present, outdated thing. Neither self-awareness of your irrationality nor clear benefits of the upgrade are enough to push you to change.

What will ultimately propel me is an explosion of frustration. I predict it will be 3:00 am, midweek. I’ll floor it to Walmart, and buy the first computer I can see through the rage-fog and a pane of glass, to replace the one Mr. Bluescreen broke.

I sent this text to Sal 59 minutes ago:

“I can’t take it anymore. The 12 seconds between every bloody click are tiny eternities binding me in DIGITAL HELL! If we don’t update my laptop to one that works you may come home to find this netbook roped off in a crime scene!! AHHHHH SAVE ME FROM MYSELF!!! love u.”

I’m getting close.

 

*Feel free to correct me if there is a word for this phenomenon. I’ll use it, acting like I knew it all along.

 

 

A book on economics that mentions Quentin Tarantino…

…I am so geeking out right now.

Thomas Piketty: the French economist bringing capitalism to book | Business | The Guardian.

beetroot theory

I was plucking chunks of mud caked to the skin of a beetroot when it hit me.  This is further evidence that Rational Choice Theory is flawed!  This beetroot!

dirty beet

I don’t like beets, but they come in my weekly veg bag, so I have this problem where I end up with a pile of dirty beets and nothing to do with them.  Rational Man might try to sell these beets on ebay, or chuck them at someone they dislike, perhaps, or chuck the nasty little beasts in the food recycling, where they belong.

Rational Man would NOT, however, be standing in the kitchen on a Sunday evening, dusting off beets to make them slightly more presentable, only to bring them to work and distribute them for free to his (bizarre) colleagues who (ACTUALLY) like beets.

What utility-maximising person would do this?

THEY WOULDN’T!  Yet here I stand, cleaning dirty veg for others!  Ergo, Rational Choice Theory has a beet-shaped hole in it!

I resume my task, feeling vindicated in this small, but satisfying, jab at neo-Classical economics.

 

tea time with the deceased

Look, just once, ok?  Just once I’d like to have tea with John Maynard Keynes.  Is that so much to ask?  I’ll make the tea, I’ll bring scones and clotted cream.  I just want to hang out, have a few laughs, talk about the weather, you know.

I spent the weekend reading a biography about economic magicians of the past, basking in their cerebral glory, and it made me a little sad.  And a bit wistful.

Where are the great philosophers? Where did they go?  Why is my time on this planet not chock full of renaissance people and beautiful prose on monetary policy?  Why does the universe produce greatness in spurts?

We could use a little greatness right now.  I ain’t saying Keynes or Hayek could get us out of this wacky financial tangle we’ve woven.  It’s not their place anyway; it’s our mess, we ought to clean it up.  But I sure would like to have their two cents.  (Tuppence?)

Sigh.  There’s nothing more pitiful than a melancholy nerd.