Financial planning, James Comey, and the least bad alternative

Not to decide is to decide

-Harvey Cox

I’ve been fascinated to listen to James Comey describe his decision process on the interviews with George Stephanopoulos and Stephen Colbert. When discussing his decisions surrounding the Hillary Clinton email revelations and retractions, he is adamant that there were no good options and he believes he chose the least bad alternative.

As always, it depends on what standards you use, what time period you’re talking about, and where your loyalties rest. Here’s where I think Comey went wrong—he seems to have considered the least bad alternative for the reputation of the FBI, not the country. I haven’t read the book (although I intend to) but am just gleaning his statements at the moment. However, who among us hasn’t made decisions by what we thought was true at the time and then found, to our horror, that the consequences were completely different? That describes an awful lot of marriages that end in divorce. (He believed Clinton had a significant lead and although he knew his revelations might hurt her, he didn’t seem to think he would turn an election).

Let’s take a frequent example where we’re faced with all bad alternatives: you haven’t saved any, or enough, money to put your kid through college and they get into a great one with no, or inadequate, financial aid. Do you drain your 401k, co-sign a loan, or tell the kid they’re not going to that college? For a lot of parents, out comes the pen (or they drain the 401k). So you think you’ve demonstrated loyalty and caring to your family, and the co-sign seems like the best alternative. Until the kid drops out, or gets sick, or can’t get a job that will cover the loan payment. But with a little longer time horizon of consequences, you might have (should have) concluded differently.

I’d propose that, in many financial decisions and also the one Comey made, it would have been better to cast the situation in a slightly different role: choose the best alternative among the ones available to you. (Note: this is NOT the theoretical best that could possible exist in some alternate universe, but what’s available to you at the time.)

Phrasing a decision this way often opens up more options than either/or. Comey has repeatedly said there were only two doors he could open, and he chose the least bad. Had he instead considered the “best available” he might have waited until the emails had been reviewed, taking the long view that going off half-cocked had a very good chance of electing a president far more profoundly careless than the woman he was investigating. And since, at the time he was also beginning the Russia probe, he might have considered several other available alternatives: reveal everything about everyone if you’re choosing to disclose unfinished investigations, or wait until investigations actually have evidence before disclosing anything at all, or valuing the good of the country even beyond the supposed impact on the reputation of the FBI (which hasn’t always been stellar for non-partisanship; I’m looking at you, J. Edgar Hoover). These would have required taking a longer view, and perhaps a higher loyalty.

Similarly, the financing-of-college decision can look a bit differently when we look for best available and take a longer view. Here, best available might be negotiating with the school, taking a gap year for the student to earn money, going with the school you can pay for, or having a serious discussion with the student about the possibilities and drawbacks of taking on debt for which they alone will be responsible. It may be deciding to rein in spending (if possible) so that you might help the student pay off debt if and when they graduate. Asking “best available” rather than “least bad” seems, to me, to generate more possibilities.

Comey, and all of us, have made decisions which were agonizing at the time, still seem like they were the only possibility, and yet are tortured by the consequences. The decision to pay off loans or credit cards rather than save for retirement, stay with the spouse for the children, invest in your brother’s now-failed business, report a sexual harasser to the ruin of your career, and dozens of other life decisions that seemed right but have terrible consequences, are simply unavoidable over the course of a life. We can’t make it all perfect, but there is a kind of peace in knowing you chose the best available to you at the time.

So too with investments. No one makes an investment believing they will lose money. But you have a much better chance if you’ve balanced all the alternatives and made the best choice available based on your research and belief in the future. And, you insure your decisions if you consider multiple alternatives rather than a hot tip, and act out of careful consideration and a long view rather than fear, desperation, or unwarranted pessimism.

 

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