Monday, January 5, 2009

- Keynesian Monopoly

My eight year old daughter is the new queen of monopoly at my house. This past weekend she crushed both my wife and me in an epic battle for control of the Atlantic City real estate market. How did she do it? She triumphed through a clever combination of diligent savings, prudent investment, and landing on Free Parking not once but 5 times in a row. Not to take anything away from my daughter’s mightily won victory, but it’s fair to say that luck does play some small part in Monopoly, just as it does in real life.

My daughter is of the age now that I really enjoy doing most anything with her. She has such a great sense of humor that she can make almost anything fun. But you can see that you’re going to lose at Monopoly way before you mortgage Mediterranean Avenue and they actually close the coffin lid. So while we grown-ups waited for our inevitable demise, it occurred to us that the game doesn’t really reflect the pressures and challenges present in New Jersey's 21st century business community. So we came up with a few ways that we could modernize the 'Chance' and 'Community Chest' cards to make the game a little more accurate for the current business climate.

Personally I think it would be big fun to discreetly print these off on yellow and orange card stock, and mix them in with the normal cards. We considered doing so and then selling the new cards on eBay, but it’s almost certainly a copyright infringement. We weren’t looking to make trouble, just to have a little fun. So instead I leave that to the reader to try on their own. Also, you’ll probably notice that we only used the character with his pockets turned out. That’s because in the modern world anytime the government gets involved it’s always bad news for someone.

The first one we came up with is this:

The reality of dealing in beachfront property in New Jersey is that you only own it at the discretion of the local government. Thanks to Kelo vs. New London, politicians can seize your property any time they like and give it to someone else to develop for greater tax revenue. We tried to think of a way to work a bribe into the card so that it would more closely match he current ‘real life’ political environment, but it was too unwieldy. Instead we don’t give you the chance to be as dishonest as the next guy, and simply take your property.

Next is this one:

Inflation makes all prices rise, so the same effect can be achieved in the game by simply taking money away from everyone. This punishes anyone who has been saving cash, just like actual inflation. If you’re wondering how this is like real life, you won’t be this time next year.

Then came this:

New Jersey has the highest property taxes in the country and in my case, they are actually higher than my mortgage. People who have made the mistake of investing in real-estate are punished every year in New Jersey, but thanks to the poor performance of the union dominated school systems, no one seems to notice. No one can connect rising school costs with rising taxes, but we still find time for sex education in the grammar schools. Thanks NEA.

Both John McCain and Barak Obama wanted to spend taxpayer money to help out homeowners who couldn’t afford their mortgages. But those are the very people whose irresponsible behavior caused the whole real estate problem in the first place. Government wants to reward people who act badly and punish people who act prudently. Since everyone in Monopoly is on pretty much the same level morally, with this card we’re simply punishing the lucky, and rewarding the unlucky. If it turns out that you’re both people, then this card is exactly as effective as most government bailout plans.

Paging Barbara Boxer. There are no drug or oil companies to nationalize or industries to stick with a punitive windfall profits tax. Instead we’re just taking them away from you. If you want to believe that this will somehow ‘save the planet’ that’s fine with us. Whatever makes you feel better… but hand over the cards all the same.

Of course, government action isn’t bad news for everyone, and it is particularly good news for those who work for the government.

With this card you get a government job. Governments don’t actually produce anything they just shift it around. So you will get paid the next time someone else does something … like pass go. But there is something even better than a government job.

With a government pension, you get paid forever from someone else’s work, whether you do anything or not. For the reader who is thinking about adding these to their game: I think at least 2 of these cards should be printed out which would give at least one player the chance to ‘double dip’ and collect multiple pensions at once. Personally I would add one card to the deck for every player, and 1 extra so that it will reflect the true economics of the government pension scam. Thanks Sharpe James.

Then finally, when the game is so convoluted that no one can tell who gets what from what action anymore, we have this card:

This one hasn’t happened yet but you better believe it will happen soon. Some estimates put this as close as 3 years from now. Personally, I think it will take longer, but there is no way it could be more than 15 years from now. That’s when we ‘run out of line’ on the federal government’s mismanagement. As for New Jersey, it might turn out to be sooner, but I don’t really know. We’ve never seen such a large municipality declare bankruptcy before, but at the rate things are going we almost certainly will. And this card is a good reflection of what will happen (and who it will happen to) when that occurs.

Feel free to add these to your game. Thanks to monopoly you no longer need to live in New Jersey to have your rights taken away and to be made a serf. Now you can play along at home while we play along in real life. If we're all going to be Keynesians now, there is no reason our games shouldn't reflect that. And if you think these new cards make the game more arbitrary and random than it was before, or that it's unfair to simply take from some players and give to others then you can appreciate how things really are in New Jersey.

And where New Jersey goes, the country now seems to follow.


This has turned out to be my most frequently emailed post ever. There are a few more card suggestions in the comments section, and these have also come in as possible additions:

You can't screw up the housing business without involving the ESA. The endangered species act is arguably the single most abused legislation in American history. Animal rights zealots have used it to prevent development since it's inception. Now it's effect can be felt in Monopoly too.

And here is another that needs little by way of explanation:


John said...

Love it.

One potential change: Rather than the player on the right, my Emminent Domain card would have you give your most expensive property to the player with the most property.

Or it could work the other way - allow the card holder to take someone elses property provided it ocmpletes a set for them - thus permitting them to build houses since houses would increase the tax paid (after all, that's the goal of ED these days)

Tom said...

Some other suggestions were an 'open spaces' card where you are prohibited from building anything on your most expensive property. Or a "NIMBY" car where you are prohibited from building anything on any property that is next to the property of another player on the board.

There was also one more suggestion where all your mortgages are forgiven, but it would require a 'political favor' card that you need to keep till you need it. It would sort of work as a 'get out of economic jail free' card. If you are in good with the politicos then you can do whatever you like.

The possibilities are endless.

John said...

"Open Spaces" cards are prevelent here in South Jersey.

Did a nice number on my grandfathers retirement planning...

Anonymous said...

Bravo. Absolutely bravo. I must make some of these cards, as well as the suggested 'open space' card, and send them to family and friends who play the game (quite a few!).

Thank you.

James Hogan said...

Genius. Hysterical. And yet a sad and tragic truth.

Ken Braun said...

Very clever stuff.

An additional update:

"Free Parking" should now be called "TARP."

Tom said...

I don't generally like to delete comments but someone left a rant here that was clearly caused by them skipping their medication. It was so unintelligible that I couldn't tell for certain what it was about. I almost left it just for the 'homeless guy on the traffic island' sound it had to it, but then I thought... it was just too angry to leave here on something that was really just for fun.

Maybe with a little luck the author will get back on his meds and we can all find out later what he was going on about.

Anonymous said...

You should add another card -
"Too Big To Fail - If the Bearer of this card runs out of money, he is to receive a bailout to be funded by an 'inflation' tax of 20% of all other players' cash."

Kevin said...

You have ruined the game! Why in the heck would anyone want to play now?

Wow, seems like real life......

Anonymous said...

1) rent control card (renter)
2) rent control card (owner)
3) hotel tax
4) cards penalizing users of the particular game pieces:
a) animal liberation - if you have the terrier, lose you're out
b) gas tax - same for car

Tom said...

I just love the "gas tax" and the "animal liberation" cards that are based on the piece you choose, but in order for that to work we need a card for every piece. Otherwise no one will ever play with the 'at risk' pieces.

I could see a "gun ban" card for the artillery piece but what in the world could we come up with for the shoe?

I'll think about it though....

Anonymous said...

How about an Affordable Housing card? You may only charge Baltic Ave rental rates for properties you own or build on the Boardwalk side.

If you have a City Council card, the other players pay YOU to build houses and hotels. This card could also subsidize the rents you recieve on Mediterranean row.

The Light Rail card turns the railroads into an all-player tax, except for the guy who lands on it.

Illinois Ave. Well, well, well. The Rezko card. If you own Illinois Ave, the player on your right buys you the lot next door to each lot that he buys.

Anonymous said...

To answer Tom's question, the player with the shoe piece would be fined for using "sweat shop" labor.

Unknown said...

Wonderful! Here's another one with a board, money, and some new recession-based rules:

goethean said...

President decides to invade a country in order to increase his electoral prospects. You forfeit a child and $20,000.

Tom said...

Nah ... adolescent anti-war delusions aren't relevant to the game and they don't have anything to do with the way reality works.

Anonymous said...

Can I play

Court rules on Mount Laurel Township affordable housing. Sell all the houses on your most expensive property back to the bank for 1/2 price.

(this is to simulate the controversial "Mount Laurel Ruling" where towns had to provide low income housing and prices certain areas were devastated due to their new neighbors)

Anonymous said...

You need a "Section 8 Housing" card. The person who draws it keeps it and when he lands on a property he can present the card, pay ten dollars and the rest of the players have to pay the rest of the rent for him.

Anonymous said...


A personal injury lawyer in the same firm as the speaker of the State Legislature says your buildings violate the State building code.

Pay $1500 or forfeit your property.

Anonymous said...

Disability Jackpot

Hurt your back lifting beer keg and qualify for SSI disability payments. Hold card to collect extra $100 every time you pass Go.

Tom said...

LOL ... yeah ... it would have to be a beer keg.....

Anonymous said...

Transit Union Contract Renewal:

NJ Transit renegotiates contract. Owner of each railroad has to give each player $50 per railroad.

Federal Pork:

Congress passes highway bill with mass transit set asides. Owner of railroads receives $200 from bank for each one.

Anonymous said...

I would say to have a separate player called the government, but I guess that the bank is now the government anyway, so nevermind. You should haowever have a pre-game ritual I call the "election." The players would vote for who gets to be the president, I mean bank. That player would have to promise alot of things to the other players, but don't worry, they don't have to actually deliver on those promises. Then, halfway through the game is the interlude I like to call the "Re-Election." This is always fun to as new promises and recriminations abound.

Anonymous said...

"I could see a "gun ban" card for the artillery piece but what in the world could we come up with for the shoe?

I'll think about it though...."

I think that you could do a "Mileage Tax" for the shoe. Just like several states are considering this year (i.e. Oregon)

Warner Todd Huston said...

I would only make one change, that would be that all these undeserved payments go to the "player on the left" instead of the right. No one "on the right" would agree with these payments, only a typical, unAmerican, leftist would.

Anonymous said...

There are truths here, but plenty of fallacies too. Example: "...the very people whose irresponsible behavior caused the whole real estate problem in the first place" are NOT the "homeowners who couldn't afford their mortgages, but the banks who LOANED them the money"!

Anonymous said...

This is the most brilliant thing I've seen in a long time. If this were implemented in the real game, I suspect it would severely depress sales of Monopoly. But, since it's such an important game to our national history, they could make sure it's mandatory in schools...

Tom said...

To anonymous who thinks it was all the banks fault:

I know that’s what the politicians have told you but it isn’t actually so. That’s actually the members of congress doing their best to put down a smokescreen to hide their own culpability. And so far, as is apparent by your opinion, it’s been pretty effective.

The fact of the matter is no one ever forced a potential homeowner to take a massive mortgage they couldn’t actually afford. The banks never compelled anyone to make foolish financial decisions. And the banks were only responding to the incentives they were given by the politicians. The government was using all its powers of coercion to persuade them to loan as much money into the sub prime market as they could.

That isn’t to say that the banks didn’t play a role in the crisis, of course they did. So did the poorly thought out accounting rules that turned what would have been a temporary liquidity crisis into an utter economic collapse. Guilty too were all the inept regulators who allowed all those SPV and SIV’s to be formed as unregulated banks and insurance companies.

But make no mistake; it was definitely the homeowners who bought more than they could afford who were the source of the problem.

Mike Baughman said...

Very clever and funny! I like Warner Todd's suggestion that all payments go to "the player on the left". I also like the "Too Big to Fail" card, but I propose that it could only be used by the player with the most properties -- it would unmortgage all properties which that player has mortgaged, with all the other players evenly splitting the cost. If that causes one or more players to go bankrupt, too bad for them!

Anonymous said...

My husband has an addition for you...

You can check out anytime you like, but you gotta pay to leave.

Due to some bad real estate investments in Philadelphia, DRPA raises bridge tolls. Pay $10 to the bank, every time you leave, or cross, one of your properties, for the rest of the game.

Anonymous said...

I meant to add, these additions really having us ROFL here. I think we're going to add them to our game board... and send some to family too!

Anonymous said...

How about:

Community Organizer Card- Give 10 percent of every dollar you spend on houses, mortgages, or properties to the player who normally takes money from your pile when you leave to go to the bathroom.

Footbath Tax Card- You are required to build a footbath an all of your property or be sued by CAIR.

Madoff Exception Card- If you are the wealthiest player and you land on the Go To Jail space, you are hereby exempt from going to jail.

Mortgage Card- If a player mortgages a property and goes bankrupt all players must give 35% percent of their yearly income to that player.

Sub Prime offset card- The bank saw fit to give billions to people they knew would never pay it back. Give half of your current wealth, and borrow one and half times your current wealth from China(who probably built the monopoly board, cards and pieces) to help privitize gains and socialize loss.

Anonymous said...

Regarding Tom and the shoe, a soon-to-be-dated suggestion: Your size 10 loafer sends you directly to jail but the resulting media celebrity means you can avoid all subsequent fines and file a fatwa against another player, causing him or her either to lose or give you all properties in penance.

By the way, I thought government had laws to end Monopoly.

Anonymous said...

I love the cards, but the card categories need new names as well. My vote is for “Community Organizer Chest” and “Change,” in honor of our next president, Barack Obama:

Jennifer @ Conversion Diary said...

These are hilarious, thanks!

Anonymous said...

In the midst of a federal and state hiring freeze, that leaves staff shortages for probation, parole and pre-trial diversion, and while I'll still contribute 4% ot the Kansas Public Employees Retirement System, it's good to know our service is appreciated.

Tom said...

Personally I'm of the opinion that 'law enforcement' and those tasks where use of force is required, is the one thing that government should continue to do even if it doesn't do anything else. That your union shoves you into a retirement plan you apparently don't like is none of my business... take it up with them.

With all that said however, this post is just a little rebellious entertainment not serious social commentary, so lighten up Francis.

Anonymous said...

I'm late to the party, but this is great! I wasn't going to comment, but I had to address this:

Tom said, "But make no mistake; it was definitely the homeowners who bought more than they could afford who were the source of the problem."

Ah, but why would a whole segment of the population simultaneously make such a terrible error? Clearly, you must look deeper to find the source. (And I think you get stuck with the same problem when you say "banks are the source" as Anonymous did. Keep digging...)

Tom said...

That’s politely offered Kathryn, but in my experience, anyone who tells you to ‘keep digging’ is either selling you shovels, or selling someone else the holes.

My point is that your phrase ‘keep digging’ implies that there is some greater truth to this story that I’ve failed to uncover. I know you aren’t a regular reader of my blog but if you were, I’m sure you’d know that nothing could be further from the truth.

I don’t dig any deeper because beyond looking at the homeowners, you need to take someone intent into account. The homeowners decided if their own free will to be irresponsible. No one forced them. No one pulled out a gun and said “buy this house or the puppy gets it”. Some of them were out and out lied to, and the people that lied to them should be prosecuted, but mostly they just believed they were making a quick buck.

Beyond that you could blame the Chinese for exporting their inflation. You could blame the fed for not doing anything about it. You could blame the congress for the abominable Community Reinvestment Act, or the Treasury for not realizing that they should regulate SPV’s and SIV’s. You could blame Karl Rove and the Military Industrial complex, Barney Frank and the Gay lobby, or if all else fails you could probably blame the Jews.

But the people whose intentional decision caused the crisis… the people who thought they were gaming the system, were the homeowners.

Anonymous said...

Tom, I am not a regular reader, but I did browse your blog and believe that you are well-informed. I did not mean that you have to dig up facts, but rather dig deeper in your analysis (as does Anonymous who blamed bankers).

I am taking issue with your description of irresponsible home buyers as the cause. I am a biologist, so I'll give a medical analogy (imperfect, as analogies tend to be, but just to illustrate what I mean about the cause).

It has recently been discovered that cold, wet feet can, in fact, increase your susceptibility to the common cold. This jives with the old wives' tale. But, cold, wet feet do not cause colds. Without exposure to rhinovirus, it doesn't matter how cold or how wet your feet are, or how long your feet are cold and wet - you simply will not get a cold. Likewise, you can still get a cold even if you keep your feet warm and dry. So rhinovirus is the cause, while cold, wet feet "encourage" the infection.

It seems strange that all of a sudden millions of people would make the same bad decision in approximately the same time period - that is, buying homes they couldn't afford. Thus, there must be something that encouraged such action, without which, this crisis would never have happened. I'd argue that even with irresponsible homeowners, there was something at play that was going to cause a recession - it just happens that (this time) bad home buying decisions were encouraged.

If you say it's the banks, you have the same problem - why would bankers make terrible lending decisions all at the same time? You can point to the CRA and the like - yes, this encouraged bad lending habits, but the CRA has been in effect for decades, so it doesn't explain the timing. What did the banks need in order to actually make the loans? Money. Where did the banks get the money?

Something that fits with all of this is that the Fed held rates below 2% from 2002-2004 (and there are other things the Fed did during this time that would compound everything). This gave the banks easy money, which they irresponsibly lent (encouraged by the CRA) to irresponsible home buyers.

We all know that the housing bubble popped... we can say the homeowners caused the pop (I disagree, but anyway...), but what inflated the bubble? Bubbles are unsustainable, but we act like life with a continuing bubble was possible. Whatever it was that inflated the bubble (Fed policies) is the actual cause of the recession.

Tom said...

OK fair enough. I see your point. Clearly you've actually thought about it so I'm sorry I was so cavalier in my initial response.

The catch phrase in my industry is that “coincidence is not causality”, and I very much appreciate that idea. In fact, in my job determining actual causality is what it’s all about. The guys who can do it, like me, make money, and the guys who can’t… go do something else.

The problem here is that economics isn’t as deterministic as biology. It’s relatively easy to say that this virus (or whatever… I don’t know your field) caused that disease, or this enzyme does whatever it is exactly that enzymes do, but it isn’t so with economics. People… all people… even the people in government and at the Federal Reserve… respond to the various incentives placed before them. And those incentives affect every aspect of their lives, often in contradictory ways. Trying to identify which incentive came first is like trying to figure out who’s responsible for stirring up all the trouble in the Middle East. The answer is everyone….and it’s the same with incentives. It’s not really possible to put the single issue of monetary policy first.

By the way, I’m not disagreeing with you exactly. I think it’s pretty clear that the fed policies were certainly a big part of the problem. But for the reasons you said, I think it’s incorrect to point to them as ‘the cause’. For instance, it would be just as easy (and accurate) to say that the whole thing was “caused” by mark to market accounting. But for that this entire financial episode would have been a minor and momentary liquidity issue in the mortgage markets and would have never turned into the kind of global contagion that it has. It was far more detrimental than cheap money. Bear Stearns might have still folded up, but Lehman wouldn’t have, and neither would Freddy, Fanny, or AIG.

Yes cheap money was a big part of the problem, and in the long term and on a policy basis, it’s by far the biggest problem. But it didn’t cause a recession. Misallocated resources cause recessions, cheap money just causes more resources to be misallocated when the bad allocation decision is made. It’s oxygen for the fire, not the fuel.

In economics when you’re looking for a cause you look for the decisions that were made. You look at who did what and when. You can consider why they did it if you like, but that doesn’t make it causal. What and when determines cause… not why. Otherwise you’ll be going around and around like some liberal… always trying to read people’s minds and determine if their motives were pure enough to forgive their bad decision making.

The people who misallocated the resources were the home buyers, so this is their deal. And if you ask me, the rest really was nothing more than poor accounting.

But thanks for making your point so clearly and politely. With both conservatives and liberals all wishing me (and all the other evil hedge fund guys) dead, I haven’t gotten a lot of that lately.

Anonymous said...

Let's just buy houses from the bubble pop! We'll help the "bail out" by buying up these non-performing assets from the banks. Their loss and your tax money for bailout will be returned back to you when you buy discounted housed and sell for profit. That is what we are doing! It's working when you can buy a house at 60% and sell 65-85%. So, while the government is trying to bend me over for my extra change, i reach in the other piles and get dollars (and I get a tax break at it too!). Ironic.

Anonymous said...

Well, we agree that misallocated resources cause recessions. I just think that blaming "bankers" and "homebuyers" ignores that they are individuals acting in what they perceive to be their own best interest - and you and I may very well have done the same thing under the right circumstances. Of course, I don't think they should be bailed out, but the blame should be placed squarely on the knuckleheads in DC. (Thanks to you too for your polite response.)

Anonymous said...

How about a Gore tax for Global Warming. You would have to pay $100 to the fastest person at the table everytime you pass go.

Anonymous said...

congratulations! this blog is very interesting and has information most important we invite you to visit our blog and and you will find both. Prices will amaze you Great investment opportunity at Costa Rica Pacific Coast, costarica real estate ,

retirement in costa rica, costa rica condominiums. Visit us for more info at:

rich said...

LOL@carbon tax. These are hilarious, well done.

Libertas said...

I love this blog! Great ideas and explanations. Great work!

Eric Overton said...

How about a card that says, "This Project Funded by the Parker Brothers Reinvestment and Recovery Act?" It must be placed like a road sign on your most valuable property, at which point nothing about that property may change until the end of the game (no buying houses or building hotels), since wherever you see the sign go up, that's all you ever see happen.