Economic theory

I couldn’t resist giving tonight’s ramble a fancy title. What I know about economic theory wouldn’t fill a thimble. It’s my inner naughty four-year-old at work.

Anyway, while moving snow around today (Portland got slammed with fourteen inches yesterday), I was thinking about the idea that economists can make predictions based on the assumption that we consumers are rational actors looking out for our own best interests.

Not! Hahahaha. I mean, what planet are they on?

In the interests of domestic harmony, I will refrain from using members of my immediate family to prove my points. Or at the very least, I won’t name names.

Suffice it to say that I would have to hunt long and hard to find examples of rational economic behavior in my family. If there is one theme that runs throughout, it is along the lines of: “It will make me happy if we __________.”

You can fill in the blank with statements like these:

buy a house.
buy a kayak.
remodel the kitchen.
take a vacation in __________. (Some of these I’ve managed to stave off, but it hasn’t made me popular.)

Lest I make it sound like I would be the sort of rational guy the economists had in mind, let me confess that I have committed my own share of stupid purchases which made me happy at the time. I was thinking the other day that it would be mighty nice to have the money I have wasted over the past 45 years or so.

But if I had, I’d probably have invested it in the stock market, and then I might be wishing I’d spent it instead.