On the Death, Sex and Money podcast, there’s an episode titled “A Dirty Cop Comes Clean“. It has some fascinating insights into the decision-making of a freshly-minted criminal. And I think it’s worth a listen.

The Episode Background

The episode was recorded to coincide with the arrival of a documentary called “The Seven Five“. Here is the blurb from the promotional website:

In the late 1980s and early ‘90s Brooklyn, NY was the murder capital of America and ground zero for the crack cocaine epidemic. One man led his crew on a rampage through the streets of East New York, robbing dope dealers at gunpoint, stealing countless kilos of cocaine and hundreds of thousands dollars in cash. He was a New York City cop. This is his story — a high-octane documentary thriller about Michael Dowd, the dirtiest cop ever. His arrest in 1992 led to the largest police corruption scandal in New York City history.

It all began in a Brooklyn precinct known as The Seven Five.

And here is the trailer.

The guy being interviewed in the podcast was Michael Dowd’s partner, Ken Eurell – who went crooked with Dowd, and then became a drug dealer. But eventually, he turned state’s witness and helped to get Dowd convicted.

I’m sure that many people would shake their heads. And be appalled that Ken Eurell still gets to collect his police pension. They might also ask “What kind of men would do such a thing?” In the trailer, there’s a very clear suggestion that these guys were psychopaths – because “they weren’t afraid of being caught.”

For me, that kind of explanation is not interesting or helpful. All it says is “Bad people do bad things because they are bad people” or “Shameless people do shameful things because they are shameless.”

It also seems wrong, because: it’s good people that do the bad things most of the time. We know this because we’ve watched Breaking Bad. But also, because of empirical evidence: very few of us self-identify as evil, but all of us have misdemeanours hiding skeleton-like in the closet. And when you’re dealing with social crimes (like drug-dealing, embezzlement, etc), we need better answers than “must be a psycho“. Especially when you hear these apparent sociopaths expressing remorse and almost disbelief at the situation in which they now find themselves.

So I have a theory, but first…

Poor Decision-Making: How Ken Eurell Got Started

The background, from his interview:

  1. Ken Eurell was in his early twenties when he joined the police force.
  2. He was allocated Michael Down as his squad-car partner.
  3. Other cops told him that he should turn down the assignment – and opt for a neighbourhood patrol, or something less exciting, rather than work with Michael Dowd.
  4. Because Michael Dowd was “bad news” and would turn him.
  5. But Ken Eurell just *knew* that he could not be turned, and that he would be fine. So he took the job.

Then, there was that first incident, from where it all went downhill. It went something like this:

  1. Dowd and Eurell were called to go and investigate a possible home invasion.
  2. They arrived at the house, and the daughter of the homeowner was outside, not wanting to go in.
  3. Dowd and Eurell went in and did a sweep of the house to see if there were still intruders inside.
  4. Dowd then asked the girl to call her mother to find out if there were any valuables inside the house, so that they could see if they were missing and file a report.
  5. She said that there was money and jewellery stored in a closet inside one of the bedrooms.
  6. Dowd went inside, and checked to see if the valuables were missing. They were, apparently.
  7. As Dowd and Eurell drove away, Dowd offered Eurell a $100 note that he’d taken from the closet.
  8. Eurell was then presented with this moral dilemma:
    1. He now knew that Dowd was a crooked cop.
    2. If he reported Dowd, then he would ruin his career and become known as a snitch. And Eurell had a wife and children to think about.
    3. Not taking the money while failing to report that Dowd was a crooked cop would make him equally responsible for the crime. At least taking the money would give him something to be responsible for.
    4. And all this moral crisis over $100, which could have been taken by those thieves anyway.

In that situation, all the possible outcomes were bad. Perhaps we could get creative about it now, and after careful thought, come up with a clever and less-awkward solution. But in the brief moment when Eurell was deciding whether or not to take the note, there was no obvious “good” option.

A Hunch About When Decision-Making Turns Bad

In some ways, I suspect that the reason that good people find themselves in criminal circumstances is very similar to the reason that good people don’t have enough money for retirement: we’re not good with compounding.

Or, more accurately, we underestimate multipliers.


  1. Man knows that Man should save for retirement, because the earlier Man saves, the more money that Man makes.
  2. But Man wants a milkshake.
  3. Surely this $5 milkshake won’t make much of a difference? Surely?

Well, if you look at the specific $5 purchase, it doesn’t make much of a difference. Math:

  • Take $5 today
  • Invest for 20 years at compounding interest rate of 5% (in real terms)
  • Lost future purchasing power = $13.27

Conclusion: this particular milkshake is worth it. Carpe diem. Et cetera.

Cumulate it

Where it starts to go wrong is when that same thought process gets applied every time you want a $5 treat. And let’s assume that happens once a day. That thinking habit then has its own math:

  • Take $5 every day for 20 years
  • Assume invested at compounding interest rate of 5% in real terms
  • Net value = ±$39,000

At which point, you really should be taking that number, and asking “Would I be willing to pay $39,000 today in exchange for a lifetime of daily treats?” And that decision can then be weighed up between how much happiness you get from the daily delights and how much happiness you could achieve with all the trips-of-a-lifetime that you could take in a lifetime with that saving.

Big Picture Thinking isn’t for minor decisions

The trouble is that we don’t think about the multiplier effect of a particular decision in the moment. We mostly look at it separate from the perspective, or the big picture, or whatever you want to call it. Because big picture thinking is for big picture decisions – not daily decisions.

And that manner of thinking gets to repeat itself, because why shouldn’t it:

  1. I justified the milkshake decision by working out that I’d only save a small amount of money if I didn’t have it.
  2. The milkshake was delicious.
  3. There wasn’t any negative outcome from drinking the milkshake.
  4. I still had enough money at month-end.
  5. I should do that again.

So the small decision becomes habitual because the “negative” consequence is either hypothetical, or too disconnected from the current moment. That is: the full impact of the habit might only be felt in 20 years’ time – at which point, way to late to change it. And it can become a really costly habit if I extend that thought pattern to larger purchases, or more regular purchases, or both.

The point is: underestimating the potential multiplier effect of a decision, or disregarding it completely, is dangerous. Perhaps we could call it “the delusion of mutually-exclusive decisions”.

And I think that the same thing happens with minor indiscretions. It starts with “What harm can this one small thing do?”

Until eventually, one seemingly-inconsequential decision at a time, it ends in front of a jury of one’s peers.

Which is well awkward. Since, because one’s peers tend to operate under the same delusion, they cannot see that each of those decisions lacked malice of forethought. Rather, there is only a pattern of small decisions showing your inner criminal “revealing” himself.

The Conclusion, then

Most people aren’t bad. They’re just bad at math.

And being bad at math means that your decision-making is blind. At which point, your moral and financial decision-making may as well be flips of a coin.

Just a scary thought.

Rolling Alpha posts opinions on finance, economics, and sometimes things that are only loosely related. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.