Sunday, September 29, 2013

Too Much Kindness

I like Megan McCardle. Well, I like her writing and, by extension, I'm guessing I'd like her as a person. She's got a typically good analysis of the Detroit pension mess over at Bloomberg which describes how the pension trustees handed out extra money to the retirees because they felt like it. However, Megan is too logical to understand that what the trustees said was exactly what they meant.
It’s very hard for me to attribute this to something benign, like total economic illiteracy or gross inattention to their responsibilities as pension trustees. I can’t imagine that anyone who can read and do basic arithmetic ever thought that draining off the “excess earnings” in the good years could result in anything other than exactly what it has wrought: a pension fund so disastrously underfunded that it may not be salvageable. No, wait, that’s too kind: they were also draining off … what should we call them? “excess non-earnings”? in years when the economy was melting down, the Dow Jones was trading for less than a Mickey Mantle rookie card and the region’s chief industry was teetering on the brink of extinction. What could they possibly have been thinking?
Megan read precisely what they were thinking and refused to believe it.
“People were having a hard time, living hand-to-mouth, and we thought we would give them some extra,” Ms. Bassett said.
Ms. Bassett cared. That's all that mattered. Ms. Bassett, like so many progressives,  felt certain that the excess money she was handing out would be replaced somehow. "How" didn't matter when she saw "need." That "how" hasn't turned up for any of the other cities or counties or nations where this same sort of thinking has predominated didn't matter either and that's the point Megan is missing.

If you had asked the people in Detroit or Greece or Japan why they handed out money they didn't have and were never going to earn, they'd look at you like you were crazy. Yes, there was graft and corruption and power-hungry political demagogues, but the folks making the financial decisions are all living on a foundational principle of caring. Caring and kindness trumps math. You can see it over and over again, whether it's in Obama's speeches or the harangues of your progressive friends on Facebook and Twitter.

So, yes, Megan, you're absolutely right. They can read and do basic arithmetic. They just don't think those things matter as much as compassion.

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