Going Once…Going Twice…

“Paul, it’s Bob Wilson. You’ve won the Nobel Prize.”

A security camera in front of Paul Milgrom’s home in Stanford, California, recorded Wilson and his wife Mary sidling up to Milgrom’s front door in the predawn darkness and repeatedly knocking and ringing the doorbell to wake him up. After a short pause to take in the momentous news, Paul Milgrom responded, “Wow, yeah. Okay.”

Story by Melissa de Witte at stanford.edu.
Robert Wilson and Paul Milgrom, photo by Andrew Brodhead.

The Nobel Prizes for 2020 were announced earlier this month. I thought I should take it on myself to understand what it was that earned these folks the Biggest Blue Ribbon for Brains in the world. I know just enough economics to get myself into trouble, so this could be fun. Economics (and science for that matter) are like languages that I speak badly (hablando de español…) I can almost read economic theory with a little wikipedia and dictionary.com at hand, but writing about it might generate some misinformation. Nevertheless, let’s dive in and alleviate your curiosity. I know you saw the awards but did you understand what they were for. I’m especially proud since northern Californians took four out of the eleven Nobel awards, two from my alma mater and two from its rival but still my peeps, woot woot!

Not All Auctions Involve Cattle or Eyebrows

My favorite award this year has to be the Prize for Economics, which usually annoys me in its advancement of “free markets,” which aren’t. This year, however, the theories were comprehensible and practical. Understanding the math is something else entirely, but never fear—we won’t go there. Two fellows from Stanford (take off that red shirt!) won for their development of Auction Theory.

When I think of auction, I always visualize a Texan with a big hat and microphone who sounds something like Leroy Van Dyke, in his famous song from the 1950s:

Either that or auctions make me think of a scene in a spy movie or comedy, where fancy people are seated in a room, and the British butler begins auctioning the mysterious painting or golden egg or Wonka ticket, which might hold a clue to the whereabouts of the Austerioserlian terrorists. Numbers are randomly repeated as he points at audience members who do nothing more than move an eyebrow or lift a pinky. Or, if it’s a comedy, the lady inappropriately dressed keeps accidentally bidding when she sneezes. To me, that’s an auction. It turns out that those are not the only types of auctions.

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The Blog Will Not Be Televised

Jo March writing
Jo March, depicted in Little Women, a film about…writing

Despite Gil-Scott Heron’s poem to the contrary, the revolution is being televised. News today is conveyed more through film than through words, though we usually need to see the headline in order to find the video during which people are reading from scripts. When there’s a big march, we see it depicted in video, from paid news programmers and live participants, waving their cameras around, showing pictures of clever protest signs with written slogans…

Nope. Nope. Much as I try to visualize it, the words just don’t go away. No matter how ubiquitous video has become, it will not entirely replace text. The art forms will continue to jostle each other for a share of your head space.

Will We All Turn Into Vloggers?

The question I’m pondering today was posed in the blogging community by Salted Caramel, who prompted bloggers about where they saw their blog going in 2020. Among other thought-provoking questions, what caught my eye was about the rise of vlogs:

In your opinion how relevant or popular are text based blogs (as opposed to vlogs) going to be in 2020 ?YouTube videos made by veteran bloggers… claimed that all bloggers would need to get on the video bandwagon in 2020 if they were to survive. Their reason was that people no longer have time for text based content...

Question on Blogging Insights from the blog Salted Caramel
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The Grand Larceny of Accu-Weather

We’ve seen plenty of bold and brazen corporate thievery in recent years. “Pharma Bro” Martin Shkreli upped the price of life-saving medicine 5000% because he could; he’s now serving years in the pen for securities fraud. There was the Enron bunch, led by Jeff Skilling, who created blackouts in San Francisco and the west coast in the early 2000s by manipulating the temporarily de-regulated California electric market. The traders were caught on tape laughing about stealing money from the “poor grandmothers.” Such a grand level of avarice is hard to stomach, but one that tops them all must be Barry Myers. Because Myers has been trying to steal the weather.

There’s a backstory, of course. A grain of legitimacy, a swirl of political intrigue, a schadenfreude twist of fate, and a who-knows-what-happens-next part to this tale. The most important question to me is exactly which circle of hell Myers will end up in, the one where his shade is bitten by snakes or the one where he is thrown into the lake of boiling pitch?

Thieves in Dante's Hell
Gustave Dore depiction of the section of Dante’s Malbolge circle of Hell specifically for Thieves
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War Over the Thermostat

As hundreds of tornadoes blasted across the midwest this past week, the impact of climate change popped up in a more mundane but perhaps significant way in two New York Times articles about room temperature. A recent study found that energy consumption increases as you get older, especially quite old, meaning a lot older than I am right now. Another study showed clearly that women and men perform cognitively very differently depending on the temperature. Both of these studies suggest our battles over the up and down arrows on the thermostat are just beginning.

Over 70? Never Be Without a Snuggie

A study published in Energy Research and Social Science looked at the use of energy stratified by age, including impact from variables of income and housing size. The data from 1987 to 2009 used pseudo-cohorts, a sciency way of saying that the study was designed to look at age groups that changed over time. In other words, they looked at energy consumption by age, and they followed those age groups for about twenty years.

From “Age matters: Ageing and household energy demand in the United States” in Energy Research and Social Science, September 2019

Apparently young people don’t use as much household energy, most likely because they run around and live in small rooms, like dorm rooms. Multi-person families buy bigger houses, so that the entire family uses relatively more energy, which seems to pick near age 50. Energy use then decreases, but starts to drive upward again after age 70.

When the researchers added income to the model, the upward slope tipped even higher, meaning that having more income when you’re older magnified the impact. This wasn’t true for those under age 30, though. Whether income was included or not, people in their twenties don’t use as much energy, whether they can afford it or not. A lot of the increase in use as people get older was due to housing size, though not all of it.

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Free Tax Advice (Well, Not Really)

Photo from McClatchy

Sophia Loren and Spiro Agnew have it in common. Al Capone, Leona Helmsley, and Wesley Snipes are also all linked, but in a different way. And Martha Stewart and Lindsey Vonn make the list, even though their situations were completely different. What’s the common thread? Tax problems, a fitting subject for a blog five days before April 15th.

It seemed like a great time to pontificate about tax rules and hand out some free tax advice, for today is the last day I will be helping out with the Volunteer Income Tax Assistance (VITA) program. As a reminder, this program partners with the IRS and United Way to allow volunteers to file taxes for free for those whose income falls below a threshold. If your income is low, and you didn’t take advantage this year, mark your calendars next February to find out where the nearest VITA site is near you! As I tell clients, your taxes are done for free, which means you get what you pay for. Same with today’s blog. But here are a few tidbits of tax advice, both frivolous and useful.

The 861 Tax Protest Argument

Wesley Snipes tried to use what is called the “861 argument” to avoid paying taxes, which points to section 861 of the IRS code that defines income sources. Snipes and others argued that the IRS code doesn’t explicitly list all possible ways you can earn income, and therefore any income-generating activity not on the list is not taxable. Multiple tax protesters using this logic have been taken to court in the last thirty years, and none have won.

No tax protester has successfully argued that you can legally avoid paying taxes.

Snipes followed the advice of two fraudsters, Tom Clayton and Larkin Rose, who called themselves the American Rights Litigators, and then later renamed their group the Guiding Light of God Ministries. Much later, they were renamed federal prison inmates # 357-551 and #AX7-832. Not only did Snipes refuse to pay millions owed for money made as a film star, but he attempted to amend previous year filings and request millions in refunds. At one point after he was indicted for tax evasion, he tried to enter South Africa on a false passport. (He also wanted his trial venue to be moved out of Florida because Ocala is racist. The judge disagreed.)

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