Is it Fraud or Just an Honest Mistake?

A fool and his money were lucky to get together in the first place. ~ Harry Anderson

I have to admit I have a compulsion. Whenever I shop at a supermarket, I pay close attention to the price of everything I buy and I make sure that is what I pay come checkout time. Why do I do this? It is a compulsion, and because I have, on countless occasions, caught them mis-charging me for things.

Now, I have to admit it is becoming harder and harder to figure out in advance what the price of everything should be come checkout time. I was at a local supermarket this week, intending to buy a bottle of cheap white wine (it was for cooking, not drinking) and came across this price display:

It showed three prices. Since I belong to this particular supermarket’s “club” (you know, swipe the card and receive the discounted price), I assumed I would get the $5.99 price. I did not see that to pay $5.99 I had to buy six bottles. I did not see that because, well, I could not see that. The fine print below the price used five (5) point font, and since this bottle was on the bottom row (it was cheap wine), it was situated under the bottle’s shelf, about three inches above the floor.

As a form of cheap entertainment, I suggest you print out something on your printer written in five point font and see if you can read it when it is right in front of your face. Five point font is about seven hundredths (0.07″) of an inch high. The supermarket has no desire (or requirement) to make sure I understand what I am to be charged for anything. They understand that, unlike me, most people do not pay close attention to what they are paying at checkout. They swipe their debit or credit card and go on their way. They understand it, and maybe even take advantage of it, by purposefully mis-charging you.

Pay close attention to your shopping and soon enough you will catch them in a mistake, or is it? An honest mistake, by definition, should have a random outcome—without a bias. It is a mistake. Someone entered the wrong number by accident.

An truly honest mistake at the checkout counter would sometimes be to my benefit (under-charging) and sometimes to my determent (over-charging). But it isn’t. To the best of my recollection, 100% of the mistakes I have detected at the checkout were in favor of the house. Now, it could be that because they never mark prices up from the retail price and only mark prices down when the item is on sale, the only possible mistakes are over-charging. But we will never know if it is an honest mistake or fraud—which would have a bias to the outcomes, especially in the house’s favor. When you catch them making a mistake at checkout, they politely apologize and make the necessary adjustments. “Sorry, our bad, honest mistake.”

I know if I wanted to commit fraud and wanted to make sure it could never be proved, I would falsely charge someone too much at the checkout counter. There are only two possible outcomes when for this: either I get caught or I do not. If I get caught, I apologize and make the necessary adjustments. “Sorry, my bad, honest mistake.” If I do not get caught, I just committed a crime that not only will never get reported, the victim will not even know they were victimized. It is a perfect crime.

Unless an insider whistleblower spills the beans, we may never know if the mis-charging at the checkout counter is actually fraud, but that does not mean you should not protect yourself from this rampant epidemic. You need to be vigilant. You need to note the price of items you toss in your cart and you need to monitor the scanned price during checkout. And you need one more thing: a big damn magnifying glass.

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The Box – Economics Explained in One Movie

It is not the government’s job to spur the economy, it is their job to get out of its way ~ Carl Weisman

[This post was inspired by the book, Economics Explained in One Lesson, by Henry Hazlitt]

In 2009, a movie came out called The Box, starring Cameron Diaz and Frank Langella. If you have not seen it, and not many people have, it is a pseudo science fiction movie, and very average. On the movie website IMDb, it received 5.6 stars out of 10 from about 46,000 users. When I saw the movie, it left me with two thoughts: that was a very average movie but, there is something subtly profound about it. I just did not know what at that moment.

The plot of the movie is pretty straightforward. A mysterious stranger delivers a box to a young married couple that promises to bestow upon them $1 million if they press a button on the box. However, pressing the button will simultaneously cause the death of another human being somewhere in the world, someone they do not know.

Of course not too long into the movie, the character played by Cameron Diaz presses the button and soon after the mysterious stranger returns with a briefcase filled with $1 million. And in true Hollywood fashion, the movie culminates with another couple being offered the same deal and when the wife pushes the button on that box, the Cameron Diaz character dies.

Economics is such a complicated subject to grasp, people are always trying to find metaphors to explain certain aspects of it. It turns out that The Box is an exemplary metaphor.

Every economic transaction is really two transaction: the one you see—which usually affects you, and the one you do not see—the invisible one—the one that does not affect you. If you go down to your local Apple retailer and buy the latest iPad, the transaction you see is your handing money over to the cashier in exchange for the product. What you do not see is the person getting laid off at Google because you chose not to buy an Android-based tablet. And that is the story of The Box—the box with the million dollar button.

Whenever you get something in life you did not rightfully earn, for whatever reason, you are pushing the button. If you collect ninety-nine weeks of unemployment, you are pushing the button. If you receive union wages that are above the wage rate that the free market would ordinarily offer for your job, you are pushing the button. And when you live off food stamps or welfare or other unearned government assistance, you are pushing the button. Somewhere, out of sight, somebody else is “dying.”

But it is not just  individuals that push the button. Companies do it too. When a big corporation pays a lobbyist to make sure a beneficial tax loophole makes it into the tax code, it is pushing the button. And when farmers receive crop supports—or worse, get paid to not grow crops—they are pushing the button too.

Whether as an individual or part of a company, when you get something you did not earn you rarely think about the person you hurt. But when you are on the receiving end of the button, that is all you think about. The only question is, do you need to be on the receiving end of the button before you stop pushing it?

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Are We All Dependents Now?

…these walls are funny. First you hate ’em, then you get used to ’em. Enough time passes, it gets so you depend on ’em .~ from the movie The Shawshank Redemption

Terrific post by Rob Schwarzwalder at the Washington Times which highlights the destruction of self reliance caused by government assistance. He confirms something I have believed for a while which is that our over-sized dependence on government assistance is a direct outgrowth of our desire to avoid risk. And while at first it might seem nice that the government provides “the soothing assurance that should we fail” they will be there to catch us, that safety net does not come without unintended consequences, which he so eloquently captures in this observation:

Reliance on government deters growth not just because it drains money from the private sector but because it suffocates aspiration.

It suffocates aspiration. A terrible price to pay for safety.

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Lesson One: Everyone is Replaceable

Life’s not fair—get over it. ~ Many

I love watching NFL football, and I have to admit the replacement referees are not as quick or as consistent as the “real” referees. If you have not been following it, the real referees are on strike (they are actually locked out, but that is just semantics). Their union is striking over several issues, but apparently the key issue is that the league wants to freeze the referee’s long-running pension plans and switch them to less attractive 401(k)-style retirement plans. According the Huffington Post, “The key is the pension issue.” The pensions have been around since the mid-1970s and “a lot of guys have made life-career decisions based on assuming that pension would be there.”

Pensions were a bad idea from the beginning. Not the idea of pensions, but the math of pensions. They are referred to as a defined benefit plan, which means they guarantee the recipient a certain monthly income, no matter what. The problem of course is the “no matter what.” Most of us cannot guarantee what we will be making next year, how can a retirement plan guarantee what you will be receiving in thirty years. So, the NFL did the prudent thing (which many other firms are doing) and switched to the more-than-fair 401(k) plan. These plans, which are referred to as a defined contribution plan, depend on the individual saving their own money for retirement—a very self reliant thing to do. You want a comfortable retirement, save a lot of money.

I do not really care which side you take on the pension issue because there is a much bigger issue at stake here for the striking referees: the replacement referees are getting better, each week, little by little. At some point, in the not-so-distant future, the difference between the real referees and the replacement referees will be indistinguishable. And on that day, the striking referees are going to learn a very harsh lesson: everyone is replaceable. A lesson the air traffic controllers learned all too well back in the ‘80s.

Their failure will not be lack of foresight, but lack of flexibility. Years ago, when organizations felt pensions were viable, they offered them to the NFL referees. And now they don’t, so they are being flexible and switching to a more sustainable business model. If the referees were smart, they would match that flexibility and take the new retirement plan. Especially in this economy.

Because of their unwillingness to remain flexible in the face of life changes, the NFL referees may soon be demonstrating the ultimate act of flexibility by changing from striking union workers to the permanently unemployed. Their life decisions were based on their pension, now their life decisions will be based on being without a job. Everyone is replaceable; never forget it. And that is why at the apex on the Pyramid of Self Reliance you will find Flexibility. The final piece to the self reliant life.

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Mirror Mirror on the Wall – Damn You

The secret to success is to do something other than nothing. ~ Carl Weisman

If you do not like where you are at in life right now, I have some good news for you  and I have some bad news for you.

Maybe you are unemployed, or underemployed. Maybe you have a job, but you hate it—it does not fulfill you—and you feel trapped. Maybe you are deeply in debt or house poor. Maybe you cannot retire yet because you did not save enough. Maybe you are overweight and out of shape—or worse, sick. Whatever it is that makes you discontented, I have some good news and some bad news.

Maybe you think you are where you are because the government has not created enough jobs. Or your employer shipped your job overseas. Or your union let you down. Or medical care is too expensive. Or younger people have more current job skills. Or the bank lent you more money than you could reasonably afford to repay. Or society has too much fast food. Whatever your belief, I have some good news and some bad news.

The bad news first. The source of all your problems is in the mirror. Step up to the mirror and take a look. The first thing you will notice is that the mirror does not accept your lies. You can lie to everyone else about why you are where you are, but not the mirror. It is a cold and ruthless antagonist that knows the truth, and will not let you run from it. How long can you stand there and stare at the truth? You want to believe the source of your problems is somewhere other than in the mirror, but the mirror knows better. The only thing left for you is acceptance. How long will it take? Time is wasting.

Now for the good news. The solution to all of your problems is also in the mirror: the dream job, good health, financial security. Whatever it is you think you want or need can be found in the depths of the mirror. It is a one-stop shop for all that life has to offer—limited only by your imagination.

Now step up and take another look into the mirror. See the power, the potential, the light. It is there. It may have been dormant for a while, but it is there. You cannot deny that it is there, the mirror does not accept that lie either. It is there. The only thing left for you is acceptance. How long will it take? Time is wasting.

And how will you know of your acceptance, your belief in the power in the mirror? What will be the outward manifestation of your belief? You will take action. You will put one foot in front of the other and start walking away from your problems and toward the magnificent, self-reliant you. And on the day you take that first step, and not some other unknown day in the future, your life will be what you dreamt of it. Thank the damn mirror

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What Happens When Walmart Moves In?

I’d rather be a lousy salesman selling iPads than a great salesman selling buggy whips. ~ Carl Weisman

What Happens to Local Businesses When Walmart Moves In? makes the classical economics mistake of focusing on only half the story.  Here is what happens when Walmart moves into a community, according to the presentation:

  • Local entrepreneurs lose their livelihoods
  • Net job creation is negative
  • Civic participation, voter turnout and nonprofit organizations all decline



These are the consequences of focusing on a small subset of people: those who own or work at local businesses. But when Walmart moves into a community, those same local people choose to shop at Walmart—nobody puts a gun to their head. And why do they shop there? Because they can get the same products for less money. And that means these same people, thanks to Walmart, have “extra” money they did not have before. And they will not light that money on fire to stay warm. They will spend it: on the Internet, to pay for college tuition or in a retirement account. Somewhere, out of sight of the local community, jobs will be created. Because of Walmart.

As way of analogy, Walmart is an iPad and the local stores are buggy whips. I am sure when the automobile first appeared, the buggy whip manufacturers decried their evils and tried with all their resources to slow down the oncoming deluge. But the world wanted automobiles. And so the buggy whip manufacturers went out of business and their employees lost their jobs. And then found new, higher paying ones, making, you guessed it, automobiles.

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My First Post

Not really sure where The Self Reliance Journal will lead, but I am excited to find out.

Self reliance; what an interesting topic. It is made all the more current by its being thrust into the popular vernacular leading up to the 2012 presidential election. But politicians can only be trusted to toss the term “self reliance” about for political gain—not to actually foster any. It does not matter. I am certain that my life’s purpose has something to do with fostering self reliance in myself and others. Especially others.

I see “other dependence,” which is the opposite of  self reliance, as one of the biggest problems facing the world today. That is why I am so excited to try and do something about it. I believe that every problem has a solution and every solution has a price. If you show me an unsolved problem, I will show you someone not willing to pay the price to solve it.

For instance, today in the US we have very high unemployment. But we also have a ton unfilled job openings. That is a problem, and I am sure it has a solution. As it is with most problems the solution is probably easy to find if you look. Identifying someone to pay the price is another matter.

When I speak of self reliance, it is not the live-off-the-land type of self reliance so many people think about when they first hear those words. A solitary existence where you take responsibility for all of your needs and do not interface with anybody else. No, I am more interested in a “cooperative” self reliance, where we cooperate with each other, but in a self reliant way. It is a philosophy rooted in the ideals of the free-market: we expect to contribute our fair share, we never expect to get something for nothing and we take full responsibility for out lot in life.

So, this is how the journey begins.  I hope you join me. I look forward to meeting you, and maybe together we can make a tiny difference. As we embark on this journey I will leave you with the lyrics from my favorite Glenn Frey (formerly of Eagles fame) song.

I look at you your whole life stands before you
I look at me and I`m running out of time
Time has brought us here to share these moments
To look for something we may never find
Until we find a bridge across forever
Until this grand illusion brings us home
You and I will always be together
From this day on you`ll never walk alone

Ne Te Quaesiveris Extra


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