The Curious Economics of Walter

I have a friend named Walter.  Walter is a bit of a hard case.  Lazy to a fault, inconsiderate to a high degree, and self-centered. But most of all, Walter is cheap, constantly looking for bargains, always never paying full price.

Walter has been unemployed at least since I first met him two years ago. It is a condition that accentuates his faults. In my childhood, he would have been known as a sponge.

He came to visit me earlier this week, greeting me with the good news that he was now gainfully employed, a condition that surprised me to the point of disbelief.

The obvious question: what was Walter employment? The not-so-obvious answer:  I will try to explain Walter’s answer as best I can.

He started by asking a question,  “Have you seen any of the automobile insurance company’s ads on television?”

I responded that I, of course, had. Companies like Liberty Mutual and Geico can spend a million dollars or more for a single 30-second spot on prime-time television.  That number can climb to $8 million or even $10 million for major events such as the Super Bowl.

I added that I had favorite insurance company advertisers and some that I disliked immensely.  He showed great interest in my opinion of the ads.  I was happy to explain that I thought that the Geico ads were both entertaining and informative.  They have been so for years.  The use of the geko is genius.  His personality and accent make him likable and engaging, even when discussing trivial matters.  On the other hand, the Liberty Mutual ads are inane and often insane.  They seldom are informative, dealing with subjects that often have little to do with insurance.  The introduction of the emu was a disaster.  It is an unlikeable animal, ugly and voiceless.

I imagine the Liberty Mutual advertising department went to their agency complaining that the geko was making Geico the better insurance company.  The agency came up with the emu to battle for the minds of the insurance public.  What a disaster.  Show me a fan of the emu, and I’ll show you a limp personality, and chances are a Liberty Mutual insured.

I asked Walter what these ads had to do with his new job.  He replied that the ads I was referring to were not the ones he was dealing with in his new occupation.

He said, “Let’s start from the beginning.  The first thing I had to do was buy a car.”

I understood that he would need a car for his new job, but he quickly added that the car was not to be used for his new job, and that he definitely needed it.

“I need the car so that I can buy insurance,” he said.  “That is why I asked you if you had seen the television ads.”

“Everyone has to buy insurance,” I said, not understanding the point he was making.

“Well, that is the starting point for my new job,” he said.  “I buy the cheapest insurance I can find.  That’s not the easiest part of the job.  It is just the beginning.”

“So you buy the insurance.  Then what?”

“I have been keeping track of those ads on television.  Not just the Geico and Liberty Mutual ones, but everyone that offers what they call ‘savings’.  I decided I would take them at their word and collect the savings they were talking about.”

“I am not following.  You collect the “savings”?”

“You're jumping ahead of me,” he said.  “They say ‘you switch’ and ‘you save’.  So I switched my insurance company to the one that said ‘Switch and save $614”.

“You can’t be serious.”

“Wait, I am not through.  I haven’t received the payment yet, but it is only a week. There’s another company that says you can save $800.  So I switched to that company.  Tomorrow I might switch to Liberty Mutual.  I might have a problem with them.  They say that I have to switch and bundle.  I am not sure what that bundle is all about. I might postpone that for a while.  I have other companies lined up. A company in Ohio is offering $715 for a switch.  One right here is giving $475 for a switch.  So far, I have over $5,100 lined up in switches.”

For a week, I tried very hard to explain to Walter that his new “job” was not a job at all.  It was a total misunderstanding of what those television ads were promising.  At first, he was unaccepting of my explanation. It was only the passage of time and the absence of any “switch” payments that led him to accept the truth and start using his car in his role as an Uber driver.