Should Collective Bargaining be Constrained or Outlawed to Balance State and Local Budgets?

My last memo generated significant feedback. It was suggested that we need to bring the Mafia back to run the unions and that would take care of the problem. (This was a well thought out premise, I might point out. It was a “little extreme” but you have to admit when Jimmy Hoffa was running the Teamsters it was powerful organization and Governor Walker would have to think twice about his stance.) Others pointed out that we should be comparing apples to apples and State and Federal workers have many differences between them and the average private sector worker. The biggest difference is education and skill set.

I want to make my point clear from the last memo. It was a simple statement that the ship was going in circles because of the lack of leadership. The Wisconsin focus is ideological and not targeted on the real problem of reducing deficits and creating jobs. There seems to be no common ground. Moderates on both sides do not exist.

Before we look at the problems in comparing private versus public sector compensation let’s look a theory of collective bargaining. (I apologize to those who like my humor spread throughout the Memo’s but this one will be more technical.)

First, let us assume only perfect competition where there are an infinite number of sellers and buyers. Supply and demand set the wages and compensation.

Now let us add the Monopsony, which is the single employer. This is the company town where you work for the company that owns the town or you get out.

Some people say a man is made out of mud

 well a poor man's made outta muscle and blood..

Muscle and blood and skin and bone..

and a mind that's weak..but a back thats strong.

And he was born one morning when the sun didn't shine.. 

He picked up his shovel and he went to the mines

 He loaded 16 tons of that number 9 coal..

Til- the Straw boss said Well-uh b-less my soul! 

You load 16 tons and whaddaya get?? 

another day older and deeper in dept 

Saint Peter don'tcha call me 'Cause- I can't go...

I owe my soul to the Company Store

Tennessee Ernie Ford is my hero!

In this Monopsony case the company says that they can hire one worker at say $1 but when they go to hire another worker they need to pay the first worker more to keep them working. So if the second worker demands $2 then the cost to the company is $3 ($2 for the new worker and an extra $1 for the first worker.) This is called Marginal Resource Cost (MRC).

Now that we have considered extra costs, it should be noted that the demand for labor is determined by the extra revenue an additional worker brings into the company (Marginal Revenue Product or MRP).

For reasons I will not go into now the company will find the point that maximizes their resource hires at the point where MRC =MRP.

That means the actual wage for the monopsony is found by dropping the line where
MRC=MRP until it hits the supply line. As you can see this wage is lower than the
perfectly competitive wage, which is what you would expect since the company
(Government) has monopoly power.

Now we have to consider the Union wage. If the Union exists and it faces a
market where there are many buyers and sellers it will set the wage higher than the
perfectly competitive wage. The union in this case has the monopoly power. It says:

"Take this wage or we will strike."

In the case of Government workers versus the Government you have the big union and the monopsony employer. If they have equal power and offset each other then you end up with the perfectly competitive wage. If one or the other has more power then you end up with a lower or higher wage than the market determined wage. The result is there is a bargaining area which generally ends up with a close to competitive wage.

What you have going on in Wisconsin is a classic battle for power. Governor Walker wants to strip the unions of their power by force of law (force a monopsony wage). The Governor contends that the Unions have used their political power to elect local school board officials and therefore gotten a higher than competitive wage.

The Unions have countered by saying that is not correct and even if it were true we will allow the Governor to give us an 8% cut in wages and compensation by agreeing to paying part of our medical costs and retirement.

Walker, of course, has determined he wants the monopsony wage and nothing else will be accepted. This is the Big Union versus the Big Business. In a way they are currently determining what the bargaining area is going to be.

The question becomes: “Does the union have so much influence over the politics to have forced a Union wage higher than perfectly competitive equilibrium.” All the studies I have looked at including the Ultra conservative Cato institute agree that the wage itself is not skewed and wages in the private sector and public sector are about even.

Where they differ is in total compensation, particularly in medical contributions and retirement. (Note, these are concessions that the Wisconsin teachers have already agreed to give in to.) Most private workers have been stuck with paying more and more of their medical costs. This is no longer an issue in Wisconsin since the Union gave in on the issue.

With the Wisconsin Republican legislature passing the law last night it significantly lowers the top part of the bargaining area. The result is the new bargaining area will be between slightly above the perfectly competitive wage and the monopsony wage. Teachers in Wisconsin will most likely end up with a wage that is below the competitive wage in most states over the next few years.

A side issue that has not been talked about is the question of gender and race.

Historically, better educated African-Americans have found more job opportunities and higher pay in the public sector than in the private sector. This was first true for the Federal Government and more recently for State and local governments.
More educated women also have preferred jobs and received higher pay in the public sector.

Now I feel all is right. I have framed the question for you to determine yourself.

Economic Memo #14 The Immigration Issue

Ok, so here I sit with snow up the wazoo and frozen, thinking big thoughts. (Did you ever wonder where the term wazoo came from? I got curious so I looked it up. Here is the answer: “Slang for butt. Originally derived from the Pama-Nyungan languages (the family of Indigenous Australian languages), and thought to refer to the butt of an animal, particularly the kangaroo.” Next time I think I will lay down until the thought goes away!)

Anyway, back on the ranch. It occurred to me that we have not gotten the conservatives in the audience “riled up” in a while and that’s not good. So let’s have some fun.

 I gave my online students a discussion item on immigration last week. It was as follows:

I say that the cheaper labor costs that arise from illegal labor increase the supply of goods and decrease the price of consumer goods making them cheaper. Using milk as an example you can see the theory nicely backs my view.

2.  The farmer hirers the illegal to lower his or her costs and meet the competitive price. Does that mean my milk and eggs are cheaper? Does that mean the price of a meal at a restaurant is cheaper?  That is what the theory tells me.


Now if we believe Karl Marx's labor theory was correct, the illegal makes a subsistence wage plus a surplus. Now Marx went wrong when he thought there had to be a revolution to overthrow the business person who was stealing the surplus. With the rise of the middle class buying voting stock in the corporation it turned out the revolution was not needed since the worker (illegal) ultimately became the owner too. Theoretically the second generation illegal will progress on the economic latter and become the stock owner. So the production possibilities curve says that I will get a higher production by increasing labor Quantity (illegal’s) or Quality (their kids become lawyers, doctors, etc. (The movement for A to B is subsistence wage and from B to C is the surplus. Obviously, I win because I share in the surplus.))


3. Doesn't the illegal force my legal work force to increase their productivity so they add more output at the same cost and thus lowering the unit cost to meet the illegal lower wage? The profit formula can be used to prove that point.

Profit = Total Revenue – Total Cost
Total = Price times Quantity sold

If the illegal takes a lower wage then that will drive the legal work force out of work unless they produce more product than the illegal due to higher skill levels. For example, let’s say I hire an illegal at $5 per hour and use them one hour. They produce 10 widgets and I sell them at $1 a piece. If the legal person gets paid $10 per hour, but produces 16 widgets which is the only way he or she can keep their job, the employer will kept them since the profit is higher.

Profit = (Price times quantity) – Cost

Illegal example:  $5 = ($1 *10) – ($5)

Legal person:      $6 = ($1 * 16) – ($10)

Now as a consumer, I am all for having the competition. Since we can assume at the old productivity of the unskilled legal worker without the competition of the illegal worker would lead to less profit to reinvest in America.

(Ok, so what is a widget? The web tells me: A Widget is a device placed in cans and bottles of beer to aid in the generation of froth. Now I can say: “Here I sit with my non alcoholic Coors, freezing in snow up to the kangaroo’s butt, with a frosty frothy beer thinking big thoughts. Now that’s heaven on earth. Can you beat that?”)

Ok, I get it. Back to the salt mines.


4. What about the kid who was born in Mexico brought to the US at the age of two. He or she is educated in the US, and has lived in the US all his or her life. Should we kick him or her out? If you have met any of these kids you know they have the same value system we do and a desire to achieve that leads to increased business and employment.

 So I got an idea let’s kick ourselves in the Wazoo and send them “back” to Warsaw, Dublin, and Mexico City reducing the production possibilities. Picture yourself kicking yourself. Not only would you look stupid, you really can not effectively do it, and even if you are successful your hurt your wazoo or foot or both. (Now you are sitting around with snow up the wazoo, freezing, drinking the frothy non alcoholic Coors Amber with a sore butt and foot. That not a pretty picture!)

5. Does the illegal using a fake Social Security card ever get the money back? If not then he or she makes social security cheaper for me, right? My unit cost decreases. The first graph will work here as well.

I can go on but what is the use. If this were a bar fight I would win. I punched the other guy in mouth before he or she knew he or she were in a bar fight, clobbered him or her (remember discrimination can not be proven economically as a benefit to me) with a bottle over the head, turned him or her around and kicked the person in wazoo, like John Wayne would have, right out the door. (You have probably had enough of the word wazoo, but I but I still think it is funny….. a kangaroo butt. I would never have thought of that. )

Ok. I will let the other person have a punch or two, but I get to wear my kid’s old hockey gear.

So Student #1 writes back.
I recognize that illegal workers provide a service to the workforce of this country.  However, I do not agree with illegal immigration.  Illegal immigration is just that, illegal.  I sympathized with those many people that escape their country looking for better lives.  I understand the need and would probably do it myself if necessary.

My response:  
Basically this is saying “Don’t confuse me with the facts.” I do not think that is a good response, it is a biased assertion. Where is the logic in that argument? We all assume that our relatives came over legally, but I am reminded of my grand mother. We held a 100th birthday party for her a few years ago. Six months later my uncle dies. Now grandma and I were never very close, so when she purposely sits down next to me I know this is not random event. She says: “I’m not 100 years old, I’m 96.” So I told her that was not a problem, she was still old as dirt!” (Just kidding of course, Grandma was a nice person and I would not have offended her. We just lived a good distance from her when I was growing up so we did not see her much.)
Anyway, back on the milk farm, she said that when her sister and she arrived at Ellis Island they were 17 and 15, and feared they would be sent back to Poland, so they added 4 years their ages” Also, remember, Georgia was originally populated by criminals by the crown and most indentured servants were let out of debtors prisons to go colonies.

Student #2 writes back:
 In my experience, the types of jobs that illegal obtain are low level, low paying jobs.  The unfortunate part of the situation is that they are treated in a lowly manner in many instances.  Is it morally acceptable that we allow illegals to stay in this country because we 'value' them as human beings or because as a nation we are spoiled and feel we are undeserved as an advanced species to perform the jobs they are willing to do?  If an illegal uses a fake social security number, they don't deserve that money back.  It is a necessary deduction we all have to pay in order to take care of our current elderly population.  Engaging in illegal activities means you do not get rewarded.  I feel this includes heath care as well.  I should not have to pay for the welfare or insurance for an illegal immigrant because they managed to navigate the borders.  In my job, I see cases all the time where citizens, legal aliens, and permanent residents get into accidents caused by illegal immigrants without the proper driver’s licenses and insurance.  The law abiders are the ones that end up paying.

My response: 
Now she has a few good points there. Even thought I am an economist and only care about the lower prices, I can invoke my moral code. It is called the Basic Economic Maxim. It states: Political considerations always win out over economic considerations. If it is politically right then we get it despite the economics. If it is economically right and politically wrong we do not get the good or service.

My answer goes on though. I would add... 

So have you been effective in sending these folks home? There are beavers at Argonne labs that build dams on the little river that runs through the campus. Grounds persons trap them and move them to the forest preserve many miles away. Two days later the beavers are back. They are not going to be forced leave behind years of capital improvements they have built.  How about the kid brought across the Rio Grande at the age of two. He or she is married with a three year old and a two year kid in Chicago and gets picked up for speeding. We send him or her to Mexico City, a city he or she has never been to, in a country they have never been to, away from all their friends, relatives, possessions, and network. Where do you think they are headed back to? Are you ever going to stop this person from coming back? They are great employees that never miss work, are  highly productive, have the same moral values as the employer, go to church each Sunday, play soccer with their kids, are Cub fans. Do you think I will hold his or job till they get back from vacation?

Another side story...

I had a young woman in class a few years ago. She was a great student, never missed class, articulate, worked two jobs, took an overload, etc. You can tell when a student is going to do well in life and the kid was ticketed for success. All of a sudden she disappears for two weeks. When she comes back she tells me that she got picked up for a tail light out on the way home from school and they send her to Mexico. Do you think I gave her excused absences for my quizzes, let her do the homework without penalty, and gave her a make up a test without penalty? You bet I did, and I would do it again in a heartbeat!

Has the billions we have spent keeping the illegal alien out of our country worked? If I have a family in Chicago and they caught me and sent me to Mexico, do you think I would not walk 3 days in 120 degrees across a desert, led by someone I paid $5000 to and do not trust. Would I climb into a railroad oil tank car and let someone close the hatch and ride for two days in the dark to get back to my family? Would you?

I think a better alternative, allowing a way for the illegal to become legal and take advantage of the above economic theory. I immediately get back the billions I am spending on the border for health care and the like. I get increased productivity and increased quantity of labor. Everyone would be a full payer in the system. It seems to me that if you admit you can not send back the illegal or stop the flow, then you take advantage of the economic benefits of making them legal.

I would like to leave you with another student’s response which I could not say better. 

Many immigrants are here legally because their expertise is very much needed. I'd like to cite some observations from personal experience. Few years ago while completing my associate degree; I discovered that most of my science classes were taught by professors who were not American born citizens. This trend has not changed in the academic arena. To the economist, the utilization of the technical skills of these immigrants ultimately increases the production of skilled scientists for the nation.

The healthcare industry is another classic example of an immigrant-run system. A significant percentage of healthcare professionals (doctors, pharmacists, nurses and therapists) are not bona fide Americans. Yet these so called foreigners continue to be the bedrock of major institutions of the American workforce! When hospitals are fully equipped with qualified healthcare personnel, the quality of care provided to patients become markedly improved. In other words, and from an economic standpoint, the increase in manpower increases productivity i.e. quality patient care.

It is possible that some employers are exploiting undocumented immigrants for their selfish financial advantage. In general, I think allowing "legal" immigrants to contribute their skills and potentials to the job market are ultimately good for the American economy.

Now I want to remind you that the Economic Memo’s are designed to provoke rational economic thought. My job is not to force my opinion onto you. It is to provide you with an understanding of the economic tools and arguments on contemporary issues. You can confirm your views or change them based on the tools. So those of you who passionately agree or disagree and want to respond, I ask you keep the discussion educational in nature.

I other words, you can kick the kangaroo, but only if you use economic arguments.

Economic Memo 11

Economic Memo #11

Why is America having so much trouble competing in the World Markets?

            So it was a great semester. How can I tell?  It’s easy! I just watch and see if my classes for next semester fill up at registration in late November within a day or so of when kids start to register. This year I was getting desperate emails, visits, and calls to get into my closed classes within hours of the beginning of registration. I have had to raise the class limits twice, but I love to teach so that’s not a problem. (Note, I did make a spot of the one student that said she wanted “to live the Hill experience” that a friend told her about my class. Now that was imaginative BS that had to be rewarded).

            Now there is a reason for my classes filling quickly. I firmly believe this is the best and brightest generation I have ever taught. The trouble is we have developed entertainment toys that have filled up their minds from the day they came home from the Hospital.

Think about it, we put them in a crib with a musical Fischer-Price toy that teaches them the ABC’s. They graduate to a Nintendo, X-boxes, Wii, computer games, texting for God’s sake, and don’t forget we sat them in the back seat of the van and showed them movies.

All the time we blast music at them that no one can understand the words that will make them deaf by the age of 30. (No Bill Haley and the Comets, No Paul Revere and the Raiders, not even a hint of  Sheb Wooley and Purple People Eater, Peter, Paul, and Mary, forget it).

They are the Nintendo Generation!

 My job is to find the hooks in their brains that are already tied to some piece of trivia or musical information and tie my economic concepts to that information so they remember it. You have to do that with the method they have been brought up on Entertainment. You have to continually make it fun to be in class and at the same time transfer the economic knowledge to them. This is a daunting task but it keeps you thinking. The balance between Scholar and Entertainer is critical to teaching this generation. If they say on the last day of class: ‘You worked me hard, you were fair, and I learned something valuable then you have done your job” It does not matter if you did it the tradition or non tradition way.

So I get this bright idea! I am going to raise the class to the next level next semester. I am thinking I will have built a small cart so I can have my computers (I use two now) and “props” right at my fingertips. Now I’m thinking that since the United States Economy is like one of our huge aircraft carriers that turns slowly and can not tilt more than 15 degrees without tipping over that would be a good concept to build it on. (Do you get the analogy that it takes months for stimulus and monetary changes to work out in the economy and there has to be a careful Captain at the controls………NOT George W. Bush!).

 I could shape the cart in the form of an aircraft carrier. I could put speakers and a LCD screen in it and set up entertaining computer driven clips and still keep my lecture on the other screen making my point.

So all I really need is a cart (2’ by 4’) with a couple of curved plywood panels painted gray that I could fold in front to look like the haul of the carrier. I could simply have another piece of plywood top painted as the deck of the carrier and unfold it and I have what I need.

I’d buy a LCD screen for $400 bucks myself so I could pull it out of the cart. This is really is not that complicated. I could take a few one by one boards, some screws, a little gray paint, a little plywood, some casters, a hammer, a saw, and in three hours and its done.  Nothing fancy but everyone will remember the economy is like a big aircraft carrier every time they see a picture, hear on the news, or see one of our aircraft carriers in person.

Now I will get to the economic point.

 I ask the College of Business secretary to have a Lewis carpenter come over since I figure a real carpenter could make it look better than I could. So I get the following message from a fellow I have known for decades back for Plant and Facility Services.

“I am not sure if Larry Hill is looking for Facilities to supply labor and material for his project? If he is he would need to meet with the Dean and make sure it is a priority for the College of Business and funded. Once that takes place and is approved it would go to the Provost and Administrative Council for final approval and priority/placement on the project list. You may or may not be aware that we have work scheduled through next semester and this is not on the list.

 If Larry Hill would like for one of our Carpenters to do this project on their own time and make arrangements to pay for it, I would need a detailed description of the project and some kind of sketch depicting the item he would like created. Once I have that, I will approach our carpenters to see if anyone would be willing to quote him a price for the project.”

            In 1968 when I first arrived on campus, I could walk up to Fred Ludemann, the only Carpenter/General maintenance person on campus, and say: “Hey Fred, I got this idea can you help me.” We would have had in class the next day.

            Now don’t get me wrong, I am not crabbing at Lewis or my friend of decades who wrote the email. What he wrote and the procedure he spelled out is endemic to the US economy today.

            I can not get a bright idea (or not so bright if it doesn’t work) and want pursue it while the thought is fresh. I must follow this procedure.

Step #1 Draw up a detailed plan.

 (No back of the envelope hen scratching here. Thomas Edison, get two draftsmen before you complete the thought……….I should note that due to a quirk in my education I am a fairly competent draftsman. It seems that in Junior High the “powers to be” ticketed me as not being able to succeed in college so I was thrown into two years of drafting classes. It probably had to do with me screwing around a lot. So here is what I would come with.) So this task only took me a couple of hours.

Step #2. Get permission from the boss and hand him a detailed plan. On pain of death do not bring a work in progress or just a concept to him. (There goes the discovery of the double helix and DNA. Did you know, the discoverer of insulin actually did not write down the formula and could not reproduce insulin for six months)? Ok, that is going to take a month. No, great loss yet!

Step #3. The idea must be designated as a priority for the College of Business. (OK, that probably ought to go through a committee or maybe two committees. Certainly it should go to the Business faculty for a vote.)  The next faculty meeting is in February, so there goes having it done by the first day of school.

Now you know they are going to want to know what the outcomes are and the results of surveying the students and a list of critical thinking methods to measure the progress of the students given this new methodology. Well the outcomes will have to have a subcommittee to set up the framework of the structure of the study. There will have to been meetings to go over and improve the structure, and then we will have to survey the students. This process will take a minimum of a year.

That is ok though because I am confident that it will pass all measures with flying colors. Now I am not complaining here. I recognize this is the way education and business work now. It is the norm not the exception. I really do appreciate the work Bill Marker, George Klemic and others of our College who do this work and pass on the results. They help me to understand why I do certain things and how to change the course to further my objectives. But the point is there is getting less and less room for experimentation and spontaneous creativity.

Let’s see, where am I time wise? Oh, February, 2012.

Step #4. Now I can go to the Provost.

The Provost will certainly take a deep look at this and lo and behold it turns out there are human subjects involved. Now we have to go to the human subjects committee, write a plan, evaluate it, chew over it, and submit it. That will take six months conservatively. (July, 2012 now)

Step #5. We finally get the Provost’s approval and off to the Administrative Council we go. (Frankly, I really don’t know what the Administrative Council is or who sits on it, but there is always a group like this in an organization and my gut tells me this is not going to be good for Larry!.)

            Now the Administrative Council takes a couple of months to review it and of course they determine it needs a National Environment and Preservation Act review. This takes another couple of months and it is determined that the report must be sent to Springfield and the State Historic Preservation Committee. Now mind you everyone agrees that there is not historic content here but we need the piece of paper from the State. That takes another two months.

Now were are in January, 2013, but we are getting there. The trouble is that the carpentry projects for the spring semester are already prioritized and in place. So we will have to wait for the fall of 2013 to get on the list.

My colleague, Dr. Bill Marker, after my last memo engaged me on the subject that service labor was very productive using the example that the people who plan the making of a forklift are really just as important and the foreigner who makes the forklift and ships it to the US. His reasoning is that the end product increased productivity and lowered costs. So the service labor value ultimately came out in the manufactured good. Given that reasoning I guess the two a half year delay in my getting the cart is the way to go.

This, of course, has it merits. As noted, I have learned a great deal from Bill and George Klemic and others that focus on outcomes and critical thinking about why I do certain things in class and how I can do them better.

In the end, I’m old school though. I will over Christmas break put together my cart. Take it to class and see if it works. Modify it, tinker with it, and in the end if I feel it takes away for the scholarship I will dump it.

Economically my point is that the US has set up government, business, social, politically correct and other constraints that business, industry, and governments outside the US are not constrained by. Is it a no wonder that we are having trouble competing.

I sound like a Tea Partier but I am not for throwing out the bathwater. I do not believe that all regulation and all review should be removed. I am however, in favor of revisiting how we stifle true creativity with our political, social, governmental and business norms today.

Economic Memo #10 Some Practical Economic Tips for the Holiday Protection

          One of the differences between the Lewis American Economy and Basic Macroeconomics classes from those at Harvard is the emphasis on Applied Practical economics. (Think about it, does the Harvard prep carry any money in his wallet? So what would they need to protect?)  Now this time of year those skills become more important than any other time of year.

          Identity thieves, pickpockets, shams and all sorts of other problems show up this time of year, so let’s review a few of the common things we should be watching for and what we can do to avoid the problems. A lot of this advice is common sense, but remember the basic rule: “It’s your money Stupid.”

TIP #1: Fake delivery messages.

It's that time of year again where people turn to online shopping which results in various delivery services attempting to get packages to them.  The result of that is hackers are now faking messages for most shipping companies (FedEx, DHL, UPS) with claims a package can't be delivered.  Open the attachment or link for details on package delivery options. You can imagine the rest.  Most of this is being tied to the Bredolab malware set.

Bredolab tends to be the first of several malware drops that will happen on a victim’s machine.  In most cases if this malware is successful, you are looking at a full rebuild of the system.  A report from last week indicates an infected machine was found with over 20 other infection files on it AFTER bredolab exploded.  Most of those infections were NOT picked up by the AV software solutions.

While things at Lewis and your internet home provider should be blocking this, the hackers are changing tech faster than we can update them.  Some stuff will get through.  Be especially concerned about anything indicating:

    Subject:  (contains one of the following strings)

        FedEx Delivery Problem

        FedEx Delivery refuse

        FedEx Shipment Status

        FedEx service. Get your parcel

        FedEx Invoice copy

        DHL Delivery Problem

        DHL Delivery refuse

        DHL Invoice copy

        USPS Delivery Problem

        USPS Delivery refuse

        USPS Invoice copy

        Track your parcel

        You need to get a parcel

My cyber security friends have seen several of these sent to home email address over the past few weeks.  I'm sure others have as well.

Tip #2 Purse Safety

So it is the holiday season and all the relatives are coming and you are focusing on getting the last minute groceries or a Target special for Thanksgiving. You put your purse in the “steal me spot” of the shopping cart, right there where the child seat is located.

The chances of you losing you wallet increase significantly when you leave the zipper open. Of course the whole purse can walk away in a split second if you move a few feet away from it to look at the tomatoes.

Oh yeah, don’t carry a steal me purse.

Tip #3 Close the garage door this time of year.

          I once had a radio stolen from my car that was sitting in my driveway and there was a blizzard outside. Thieves can be very bold so do not leave valuables inside you car in the driveway or open garage. (Reminds ME of the Einstein fraternity brother I had in college. It was snowing and he decided to steal a battery out of a car a block from his apartment. The next morning the cops followed his footsteps in the snow back to his apartment and got him.)

Tip #4: Beware of the Pick Pocket sign and where to carry your wallet

          So you are on

Michigan Avenue

with the million other Black Friday sleep walkers enjoying the Macy’s windows and shopping your socks off the day after Thanksgiving. You look up and see a sign that says “Watch out for Pickpockets”. What is the first thing you do when you see the sign? Grab to check where you wallet is?

DA! Who do you think put up the sign?

Of course, the pickpocket, they are waiting to see where you have your wallet stored.

Now this time of year in Columbia corporations are formed. They are stock held corporations and will share the profits of the short lived business. They will hire groups of six persons and train them to be pickpockets for three weeks. They will be split into two working groups of three persons each and given an airline ticket to Miami. They will work Miami for a week then go to NY, Chicago, Denver, San Francisco, LA, Dallas, Orlando, and back to Miami and then home. If one of the group is arrested it is a petty crime and they are released the next day and home they go.

The way they work is for the SHILL to distract you. (I had this happen to me and my wife in Caesar’s Palace in Las Vegas. The guy was acting like he was taking a picture but he did not look like a tourist and was purposely distracting me. In Europe around all the big attractions the Roma have their kids run up to you and pull on your pants leg or otherwise distract you.)  While you are distracted the WIRE moves in from behind and lifts your wallet or uses a box cutter and cuts the strap of your wife’s purse. The Wire moves out ahead of you into the crowd. When you lose track of him or her for a second the STICK is moving in the direction toward you and the purse or wallet is handed off.

Now you are probably thinking that Dumb Hill lost a bundle. Well, I did not lose a penny. First, I do not carry any credit cards in my wallet or ID while on vacation. And I would not have gone in a highly traveled area with Gucci stores animated fountains all around me with any big money in my wallet. Second, when I saw the guy distracting me I immediately and suddenly stopped and wheeled around. I scared the Blazes out the WIRE. He looked at me like a deer in the headlights and took off into the crowd like a fish.  I never saw the SHILL.

About a block later I wheeled again suddenly and there was both of the WIRE and SHILL right on top of me. They both turned and moved off quickly in the opposite direction.

I immediately went into a store and asked them to call security. Security showed up 35 minutes later. That tells you security is in on it or overwhelmed.

You should carry your wallet in your front pocket of the hand that is dominant. I am left handed so I will carry it in my front left hand pocket. You may want to carry a decoy wallet that is empty in your back pocket that will surprise the pickpockets when they get home.

Tip #5: Where should I store my computer on vacation?

          OK, so you are heading to Disney World for Thanksgiving and are taking your computer with you. Make sure you do not leave it in your room. Put it in the truck of your car.

The way hotel rooms are cleaned is by opening up all rooms on a floor and then cleaning them one by one. This allows the thief to sneak into a room ahead or behind the cleaning crew to help themselves.

TIP #6: If you get your wallet stolen what should you do?

First, don't carry large sums of cash with you - and if you must, then always keep most of it in a money belt under your clothing. (My favorite place is to buy a money pouch at Penny’s or Wal-Mart. I like the kind that has a zipper and a Velcro flap over that. Shorten the strap on the thing and place the flap toward your body and slip it under you under arm. The weight of your arm will keep it in place and if it slips you will feel it. After a minute or two you do not notice it is there. When you need your credit card simply go into a bathroom stall and take what you need, go make your purchase, and then go back and replace the card in the holder.

Second, keep a record of the credit card number and emergency phone number to call. Mix up the numbers on the record making sure you remember how you changed them and do not put the 4 or 5 at the beginning since that indicates it is Master Card or Visa.

Third, call the credit card agency and report the loss. Many cards have a service for $10 a month to call all the other agencies for you. The biggest problem you face is cutting off your credit right away. You need to call the three national credit report organizations immediately to place a fraud alert on your name and social security number.

Now you can set up a credit alert if you only “think” they are stolen and the credit issuing agencies will call you to ask if you have applied for credit. You do not want the thief to use your stolen information to set up credit and buy things and find in three months bills showing up out of the blue.

Although you are not liable as long as you have shown due diligence for more than $50 it is nightmare straightening things out. You can also buy for $25 a year from your insurance company legal representation up to $10,000 to have them straighten it out for you.

Fourth, call the police and report it. Now they are not going to do anything but you must show due diligence so get the police report number and give it to whoever asks.

Fifth, call the Social Security Administration and report the number as stolen.

Sixth, walk around a two block area from where you lost the wallet or purse. Look into the garbage cans. The thief does not want to be caught so they will ditch it wallet or purse ASAP and if you are lucky they have taken only your money and the credit cards are there.

TIP #7: How should I act if robbed?

If a robber comes up behind you and sticks finger or gun in your back and asks for your money then give it to him or her. This is a professional looking for your money. He is doing his job, so you have to do yours.

However, if he or she sticks a gun or finger in your back and tells you to walk down the block and turn left. Now you fall to ground and make a heck of a ruckus. What is the difference? In the first case the robber is after your money. In the second case the robber is after you. Your chances of being harmed increase as much as 400% when you are asked to move to a secondary location.

Tip #8: It can happen anywhere

Do not think you should let your guard down this time of year, especially in these hard times. Crowded places and high volume or fancy store areas are more likely to have robberies and non violent crimes, but as we know that is no guarantee it will not happen in a non crowded place.

If you feel threatened in a lesser populated area make sure you keep your mind alert and thinking. You should be considering your exits and always position yourself so you are not trapped.

I had an interesting one happen to me walking my son’s dog in a Silver Springs State Park in Yorkville last year. It was a nice summer day and we were walking around Loon Lake which is about a half mile long and quarter mile wide. People were around fishing but not too many.

A woman came out of the outdoor John’s as Bat and I rounded the end of the lake by that spot. She was three sheets to the wind, and was obviously not in very good condition. She began to fawn over the dog which is a very nice looking Blue Heeler. Two companions came up and one moved between me and my exit route so the lake was behind me. The other moved in front of me.

I saw the guy maneuvering around behind me and moved to the side so he could not cut off my exit and he was now between me and the lake but I now had an escape route. The dog is a very athletic animal and protective so I kept him in front of me.

The women got up and said: “Joey, that is such a beautiful dog, why don’t you hit the guy over the head and let’s take the dog?” NOW THAT IS A TRUE STORY!

Three things saved me that day. One, I was aware of the danger and did not panic. I moved to counter the guy from cutting off my exit. (Now those of you who are saying with a huge smile: Have you seen HILL? What did he think he was going to do out run the characters?” Once the image fades a little in your mind and you get off the floor from laughing so much, I want to point out that was not my thought.)

I moved so the guy on my side was now a simple push into the lake which would have created a scene and attracted the attention of the fishermen that were a few hundred feet away. This fellow had also been drinking so I was a match for him, especially if he were surprised.

Second, I placed the dog in front of me since any move would have put him in protective mode and certainly distracted the drunken woman.

Third, the third guy was sober and he assessed the situation. You could see his mind turning. He correctly observed that I had moved to keep my exit route open and that I was now completely aware of the danger. He knew that if this robbery was to be successful it had to have an element of surprise and had to be a crime of opportunity and quick. Clearly I had eliminated the quick part. He told her to get into the car and they left.

My point is that you can get yourself into a bad situation anywhere but do not lose your head………keep thinking.

Tip #9: Check the URL

When you get say a message that requires a response from say Google or PayPal, you need to check to make sure you are not getting scammed. The simplest way is to check between the /…../ in the response click. For example, if it is a message from Google it will say http:/google.com/.

If it is a scam it will have the true place the return is going to, say http:/bugariansecretservicescammers/.  Do not click on the response url, simply run your cursor over it and it will highlight it for you.

TIP #10: Computer Password Rules

The safest password has the following characteristics:

·        It is eight characters long

·        It does not start or end with a number

·        It has a character in it (*)

·        It does not contain a birthdates

·        It does not contain a nickname

·        It contains capital and non capital letters