Friday, October 19, 2007

Marginalizing Cheapskates

I was once drinking and bullsh*tting down at my old golf course in Philadelphia with the guys and I suggested that we create "All" foursomes.

We could have an All-Talking foursome which would be JoJo, Frankie, and two other talk-the-balls-off-a-pool-table blabbermouths.

We could form an All-Cheating foursome of Bruno, Fat Johnny, and two other guys widely known to have flexible relationships with the rules of golf.

We quickly formed an All-Slow Play foursome of the four most brutally slow players.

And so on and so on.

Then I suggested we conjure up the All-Cheap Foursome. To which, after a moment's contemplation, one of the guys quipped, "Never mind a foursome - we have enough for an All-Cheap league!"

Indeed it was true.

Every family and every social group has its cheap members. You know, the ones who buy the worst Christmas presents. The ones who nurse their beer when it looks like it might be their turn to buy a round. They've got the short arms and often the deep pockets. They've never had to ring your doorbell with their elbows!

So how does one manage them? Do you just buy them drinks and bear the disproportionate expense? Do you call them out and try to guilt them into pulling their own weight? No doubt innumerable relationships have been ruptured by one party's resolute cheapness.

What if, in a given friendship, one person makes substantially more money than the others? Are they morally obligated to ante up a little more of the restaurant tabs and whatnot?

Which particular groups are the cheapest?

Well, I liken this bigotry query to the one I posed in an earlier post about who were the worst drivers. For nearly every group/ethnicity/creed, you can find someone who thinks they are the cheapest (or worst drivers).

Of course in terms of ethnicities, Jews might bear the most stereotypy for penny-pinching but from my own experience, I can tell of extremely cheap genes apparent in certain Asians, Irish, Italians, Hispanics and blacks that I know. There are cheap old people and miserly young'uns. Women can be just as cheap as men - or is it vice versa? Rich people can be just as cheap as poor people. There simply is no winner in the cheap contest.

Let's throw out some examples.

Patrick Ewing, retired NBA baller was known to be notoriously cheap. He would regularly go out to restaurants in Manhattan and when the bill came would assert that he had forgotten his wallet. He was making $18 million per year his last few years in the league!

Michael Milken, the disgraced junk bond king of 1980s used to take NJ Transit to work rather than pay up for Amtrak. He also wore cheap suits and a bad toupee despite making several hundred million dollars.

My sister was recently invited over to her cheap friend's house for fajitas. He asked her to bring tomatoes. Turns out, he asked everyone attending to bring one of the ingredients. Someone had to bring the tortillas. Someone else had to tote the chicken, etc. It's a wonder they didn't all bump into each other in the supermarket beforehand!

There is a big shot trader on the Philly Stock Exchange nicknamed "Cheese". Cheese won't so much as buy himself lunch despite the millions jingling in his pockets. I used to watch him everyday not order lunch when everyone else was doing so. Then, around 1:00 pm or so he would procure the second half of some clerk's sandwich or the extra slices of pizza from a broker. The guy drives clunkers and once, took a trip to New Orleans with some other traders. Get this, the guy decided to room at the YMCA for something like $13 a night! Oh, and you should have seen him scramble to get his ticket in for a juicy one lot trade. He really needed that quarter ($25)!

There is one guy, a friend of a friend, on the periphery of my wife's high school social net. He's another one of these guys that has been out at a restaurant and insisted he "forgot" his wallet. The more egregious story with this guy happened one drunken night out in the Hamptons. Remember what alcohol does, it removes inhibitions. A bunch of people including this particular miser crashed at my wife's family's house in Southampton. The next day, while vacuuming we discovered a few kaiser rolls under a bed. It turns out, the cheapskate came back late at night and assessed that there wasn't much food left so he stashed away the remaining rolls under his bed LIKE A STARVING PRISONER. We would never of unlocked this mystery if we didn't find out that in the wee hours he was assuring one of the guys not to worry about eating because "We've got some bread". This was an odd episode to say the least. All other experience has shown this guy to be as tight as they come. How did he get way? Who knows. But supposedly his dad is demented similarly despite being a high level executive for News Corporation.

I worked for a guy, another multi-millionaire, who I listened to spend 20 minutes on the phone arguing with a customer (on his side business) over who would have to pay a $9 FedEx bill. This was a dozen years ago and the customer was across the country. The cost of the phone call had to be near half the disputed amount all by itself. I couldn't believe this boss of mine fussed so much over a pittance while he had a trading firm that flung around hundreds of thousands of dollars on a daily basis. It was surreal. Declare your bigotry and guess his ethnicity!

Now on to tipping.

The best tippers are, well, people who work for tips themselves: other bartenders and waiters. I used to sell food and beer at a golf course and this one guy, JoJo the bartender, was an absolutely insane tipper. It was two bucks for every little thing from coffee right down to if you told him the score of the Eagles game. I am not kidding. This guy would tip at toll booths and at McDonald's.

The worst tippers are blacks, Europeans, and younger people in general. All sorts of explanations abound but who really cares. This is an empirical blog, wholly insensitive to apologetic idealists. (By the way, I don't buy the 'the tip is included in Europe' so-they-don't-know-any-better excuse.) Blacks simply do not tip. Go google it - a ton of stuff comes up. When blacks come into a restaurant, waiters vie for other tables - including black waitstaff.

Also, I was a bit shocked when I was in South Beach a couple of years ago to see a $.41 tip included on my breakfast from Johnny Rockets. Miami has apparently taken it upon itself to automatically include tips on a everything - thank the Euros who've taken over the city. (Or is it the rappers' fault?)

I was always a good tipper. I guess it made me feel like a "big shot" and of course I worked for tips myself so I was sensitive to the practice. In fact I had to really work at NOT TIPPING piss poor service. I have found the profoundly rude Boston restaurants and bars to be really helpful in teaching me to tone down my gratuities.

At the conclusion of a wedding I attended in Vineland, New Jersey, I did what I always do. I sauntered over to the bar and left a tip - usually $20. The bartenders, all six of them, thanked me profusely. So I asked how they did for tips that night and they said they got "nothing at all". I couldn't believe it, there were 350 guests from all over the globe ordering pina coladas and glasses of white zinfandel (Hah! Old people drink that stuff). I wouldn't be surprised if any of those bar servers called out "sick" for the next wedding at that synagogue.

I know a girl who's worked at a wedding/catering hall for years. She also claims that blacks tip the worst. She said they can be nice as pie; they'll hug you and kiss you; but they won't leave a nickel. She also told me that cops and firefighters are the best tippers in her experience.

Bad tipping doesn't necessarily imply cheapness but they are kissing cousins.

There are so many ways cheapness can manifest itself. For sure you have older relatives that would go into cardiac arrest if you rolled the car windows down when they had the air conditioning on. As I have mentioned before, older folk are extremely cheap with food, technology, and energy. They should however get a bit of a pass because they grew up in a poorer generation and are mostly on fixed incomes. Well-traveled, wealthy, younger penny-pinchers who should know better get no pass at all.

I would surmise that most people are irrationally cheap about something. Me, I hate when cab drivers rip me off for $3-$5. I can't tell you how many times I have gotten into fights with cab drivers and jumped out without paying. I also hate to pay for haircuts. My head is essentially shaved and I can't pay someone $25 to spend the 4 minutes it takes to cut my luscious hair. So what if I have to walk the back alleys for a week or two after my self-administered cut? I also loathe spending money on housekeeping, yard work, snow shoveling, and childcare. I would rather do it myself than pay what I feel are ridiculous market wages.

There are many places that attract cheapos. Parks, bookstores and libraries immediately come to mind. I know a guy who used to manage a Waldenbooks. He told me that people would come in every day, take a newspaper, sit down with it, and do the crossword. Then they would put the paper back in the stack for sale. Now I would never pay a nickel for a newspaper myself, as they are vile worthless slabs of propaganda, but I'd never deface a 50 cent paper in a store without buying it.

I remember sitting in an economics class in college and getting blown away by a remark made by the esteemed Wharton professor (Robert Inman). The class was talking about tipping and the prof derided, "I just think of tipping as 'income redistribution'." It may not sound that bad by itself, but it was in a wider context of why would anyone tip a waitress in a diner while traveling. In other words, if one is eating in a restaurant that they'll likely never return to, it is irrational to leave any tip at all. I couldn't believe it. I was 19 and I fully understood the entire concept of tipping but this nerd teacher (Harvard PhD) and assorted other student nerds hadn't a clue about it.

I would have forgotten about this little incident if I hadn't more recently read a post of that Total Loser Greg Mankiw's a short while back. Here's what he said about tipping:

No, really, it's up to you

Economists do not have a good theory of tipping. Normally, we assume that consumers pay as little as they have to when buying the products they want. Yet, when buying meals, haircuts, and taxi services, most consumers voluntarily pay more than they are legally required. Why does this happen? Why is it more true for some services than for others? Why do tipping customs vary from country to country? I have no idea.

The rock band Radiohead is putting this phenomenon to the test: You can buy the download of their latest album for whatever price you choose. You can pay as little a penny or, they hope, much more. The whole price you pay is, in essence, a tip (but paid before the service is rendered).

Since we economists don't understand tipping, we can't really say whether this new scheme will work. But if it does, during my next ec 10 class, I will put a hat next to the lectern.

Oftentimes, a frank admission of ignorance demonstrates genuine wisdom - but not here. Mankiw, like the other Harvard-educated professor whose lectures I had to bear, doesn't understand why consumers ever tip. In his convoluted mind, the lumpen consumers are simply "not rational" (nor are voters). This is just his gutless, elegant way of asserting his intellectual supremacy. It's the professorial way of calling everyone else stupid.

I really wish he had left the comments in place. If he had, you'd be able to read several comments from incipient little socialists (students) echoing, less tactfully, the sentiments of these scumbag professors.

I failed somewhat in this post to stay on topic. My screed on the generic cheapskate devolved into a screed on bad tippers. I guess tipping is where cheapness most manifests itself. But in no way are customers the only penny pinchers in town.

I knew the now-deceased bar owner of Chaucers in Philadelphia pretty well and he was one cheap bastard. He regulated the amount of soap his bartenders used to wash glasses. He demanded a head on draught beer to shave his keg costs that 2%. He even put weird tape contraptions on the waitstaff's pens because he was convinced that they often rolled off the bar and into the trashcan. Meanwhile this filthy rich tightwad was always telling me about his million dollar semiconductor bets.

I also got a bagel recently from Bruegger's. It was early and for some reason the manager ended up serving me. He was very slow and quite stingy with the cream cheese. I very politely asked him for "extra"; without breaking any speed limits, he niggardly dabbed a bit more. I asked again for some more and he looked up at me above his nerdy accounting glasses and declaimed that he already put "extra" on it. I said, "I will pay you whatever you want for the bagel but if you don't put more cheese on it I won't take it!".

Man, you'd think I asked him for a pound of flesh...

Cheapness must of course be a gene but like everything else, I suspect it can also be an environmentally wrought disposition.


Anonymous said...

One grandma I know would not turn on the interior house lights until she couldn't see where she was going. The family would come over, and she'd be cooking with the lights out.

Another one sent my step-brother to the store for some cat food. He bought some decent cat food, maybe it was the "gourmet" type. She saw it and made him return to the store and swap it for the cheapest brand they carried. Since she was worth 3/4 mil and he was a likely inheritor, he did as he was told.

CaptiousNut said...

Yeah, my parents' house is pretty darn dark as well!

They run around turning lights off to save 2 cents (?) and then when they get their roof redone or central AC installed, they haven't sense enough to get a second estimate....and they get ripped for THOUSANDS.

I once went to get a *greeting card* for my wife's incapacitated, miserly uncle.

When I handed him the card he went ballistic, "YOU PAID $3.50 FOR A CARD!!!"

And it's not like he even had any plans of compensating me - which is fine. Just don't yell at me for doing you a favor, right?

Cheapness is a disease - of course, so is extravagance.