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The late Buddhist master Chogyam Trungpa described a dynamic he called “idiot compassion” as follows:
Idiot compassion .  .stems from not having enough courage to say no. . . .In order that your compassion doesn’t become idiot compassion, you have to use your intelligence. Otherwise, there could be self-indulgence of thinking that you are creating a compassionate situation when in fact you are feeding the other person’s aggression. If you go to a shop and the shopkeeper cheats you and you go back and let him cheat you again, that doesn’t seem to be a very healthy thing to do for others (from Glimpses of Mahayana, pgs 36, 39-40).

This principle came to mind not long ago when I read an article about young people living in Williamsburg, Brooklyn (near where I live) who make $150 a day panhandling in Manhattan. That’s almost $40,000/yr, with the weekends off. The article implies that much of that income funds substance abuse in most cases, which is consistent with what I’ve been told by social workers in the field.

As a New Yorker, I’m confronted with panhandlers on an almost daily basis. More or less without exception, I completely ignore them, and don’t think twice about it.

I’m not going to pretend that this isn’t self-serving. It’s often rather horrifying to confront other people’s suffering and wretchedness, and much more comfortable not too. But I tend to think it is nonetheless the right thing to do, and I don’t feel much in the way of misgivings about it. Giving money to panhandlers, it seems to me, not only prolongs and enables addictions, but it also enables exploitative behavior and degrades the fabric of the public realm. That is not to say I believe that it is appropriate to lord over anyone in judgement, or that the very real needs of people in desperate situations should go unaddressed.
I know other people feel differently. What do you think?
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