'Home Economy' - Getting nickeled and dimed in my own home

Not long ago one of my daughters came looking for me. The boys told her that I was working —“making money” — up in my home office.
She slipped in quietly, wiggled up onto my lap and spent a long moment peeking around the sides and back of my computer before looking at me quizzically and asking, “So where does all the money come out?”
“The better question,” I responded carefully, “is where does it all go?”
The topic of money has been one of intense interest in our home lately. Peter, our 7 year old, in a bid to learn more about making more of it, is reading a 450-page biography on Warren Buffett.
“What's Buffett doing now?” I asked him as he sat reading on the sofa.
“He’s making money, Daddy.”
“That’s what you said he was doing yesterday and the day before.”
“But Daddy,” Peter explained with just a tiny hint of teenage exasperation, “it’s because Buffett is always making money.”
And now so too are the kids. After Peter won a jar of dinosaur stickers at a Cub Scout dinner, he immediately set up shop in the backseat of the van, hawking them using a market-based variable pricing system right out of an MBA lecture hall: 25 cents apiece for the coveted T. Rexes, 10 cents for stegosauruses and a penny for the much less popular pterodactyls. And discounts on bulk purchases.
Not content to let their money sit idly by in the piggy bank, the boys have been putting their capital to work, reinvesting it opportunistically in other high-return ventures. Since Alison never has time to stop at the ATM, the boys have gladly stepped in to fill the need. When our van pulls up to Jimmy John’s or Kroger, they start barking out quotes from the backseat.
“Twenty bucks at five cents per hour,” someone will shout — a tidy 2,190 percent annually.
“I can do it for 10 cents a day,” says another — a more reasonable 182.5 percent.
Eventually the short-term loan is bid down to a penny per day — 18.25 percent — about the same as the Amex card.
A few cents here and there doesn’t sound like much, but the kids make it up on volume. I can always count on someone to watch the baby for an hour in exchange for the $0.17 on my desk, and last week I got three scrambled eggs with hash browns and toast delivered to my office for just a quarter. A relative bargain, even if I am paying for the ingredients. Plus the interest.
The ample supply of available labor in our home keeps prices low. And if I hear any grumbling about wages, I simply threaten to offshore the work to someone willing to work for much less — like a little brother or sister.
By far the biggest threat to the labor market of our little home economy is that of friend- or cousin-induced inflationary pressure. The neighbors occasionally offer $20 a week to a boy willing to pick up the paper and “keep an eye on things” while they are gone. Rumors of lucrative allowance payouts to distant friends or cousins have a similar effect: collective bargaining for higher wages.
“The cost of living is much cheaper here,” I fruitlessly explain to the kids. “You can’t expect to get the same as a kid in New York.”
To teach them more about inflation, I gave them each $60 trillion for Christmas. In Zimbabwean dollars.
Afterwards, when I asked for help shoveling the driveway, the kids nearly went on strike. “Daddy, in Zimbabwe kids are paid trillions for this kind of work,” they lamented.
Inevitably, wherever there are large sums of money sloshing around, there is bound to be a criminal element. Our biggest issue lately is counterfeiting.
The photocopied coins remain, not surprisingly, unconvincing fakes, but as our print/copy/scan capabilities improve so do the quality of the phony bank notes. Thankfully, we have plenty of enterprising eyewitnesses, all of them willing to squeal on a perpetrator for a small reward, like a shiny nickel.
Even as all these external market forces wreak havoc on our labor market and threaten our small, developing home economy, I have found there is one area of policy I still control entirely.
At the drive-thru window I took a healthy drag off the top of the kids' cones before handing them back.
“Hey,” they each wailed in turn. “That’s my cone.”
I waited until things quieted down. Then, as we drove away, I continued with the lessons in capitalism.
“So, guys, let me teach you something about taxes …”
Paul Fredenberg lives in Ann Arbor with his wife and seven children. He can be reached at psfredenberg@gmail.com.
Source http://www.annarbor.com/