March 13, 2008

"Kill my neighbor's cow!"

As recently as 2004, the Obama family enjoyed merely the kind of upper middle class income ($250k) that many Americans could imagine themselves making if a few breaks had gone their way. This comprehensibility of the Obama family financial situation can put them at a PR disadvantage relative to the Clintons, whose finances are evidently way, way up in the Davos Man stratosphere, as Bill jets around with Ron Burkle and the like, introducing the odd mining magnate to his close personal friend the Grand Khan of Boratstan.

For example, consider the Obama house controversy revolving around Tony Rezko purchasing the adjoining empty lot for the full asking price at the same moment the Obamas were buying their house from the same seller for $300k off the asking price. I could imagine scenarios where Rezko's "investment" in Senator Obama ranged all the way from $0 to a few hundred thousand dollars, but my best guest would be around $70,000. (This assumes that two participants in an honest deal would have split the discount off the list price proportional to their investments. Instead, the fixer apparently let the politician have the entire discount.)

Man, wouldn't it be nice if some old buddy of yours slipped you $70k in return for all the favors you've done for him and will do for him over the years? That would be great! Or wouldn't it be awesome if your spouse got a raise of something like $150k per year, plus a signing bonus of almost $50k because you've now got even more power over her employer? Can you imagine all the things you could do with that kind of extra money?

Yes, I can.

So, it's easy for me to get in a huff over the Obama's relatively human scale corner-cutting, while Clinton-level shenanigans are just the way of the world.

I really can't grasp the kind of money Mr. Clinton rakes in for things like giving speeches to companies whose profits are heavily dependent upon votes by Senators like, say, Mrs. Clinton, such as the $250,000 that Citigroup paid Mr. Clinton for one speech in 2004. Now, Citigroup is currently desirous of Congress voting for a massive bailout of the financial industry, but I'm sure that kind of eventuality never crossed Citigroup's mind when hiring Mr. Clinton. Instead, they clearly must have done a cost-benefit analysis of the value of Mr. Clinton's oratory and saw that his wisdom was indeed worth $100 per second.

A long time ago I reported to an entrepreneur who for awhile had his own jet (I am told that that's the dividing line between the merely affluent and the really rich), but riding on it was kind of uncomfortable because the thing was so obviously hugely expensive relative to his ample but still finite net worth (for example, you have to employ two pilots full time).

So, even though I've been around private jet-rich people in the past, the idea of me ever being that rich just seems oppressive, with two pilots sitting around all day at the local airport drinking coffee, waiting for me to come up with some place to zoom off to where I can make enough money to keep paying them to sit around and drink coffee while I dream up more places to go to make more money to pay them. Yeeesh. So, I never think about having that kind of money.

But if you are Bill Clinton, you don't even have to bother owning a jet because zillionaires are constantly offering to lend you their private jets for free.

But I do think now and then about the 8,000 stock options I had in a company where I worked. They had a strike price of 14. I'd had them for years, but the stock was usually trading a little below $14. One day in the 1990s, I checked the stock price on a whim for the first time in months and it had gone up to 19. Wow, I should pick up the phone and cash cash them in for $40,000! But, then, I had an even better idea -- I'll just wait until the stock hits 20. A nice round number! It'll probably get there by tomorrow. But, as I watched the computer screen, the stock slipped to 18 7/8, 18 3/4, and so on. Within a few weeks, it was underwater and never resurfaced.

$40,000. Gone.

That's the kind of number I can dwell upon, like that $70,000 I'm guessing was Obama's cut from Rezko.

Bill Clinton doesn't get out of bed for $70,000.

This whole Clinton-Obama financial scandal comparison makes me feel like some poor 19th Century Russian peasant. That the czar has rooms full of rubies and diamonds is simply the natural order of things, but that my neighbor has a cow while I have none is an outrage.

My published articles are archived at iSteve.com -- Steve Sailer

21 comments:

Anonymous said...

THAT is a very good insight. And yes it will hurt Obama greatly.

daveg said...

Hey Steve,

Did Bonfires score another hit with Spitzer?

Is Spitzer the hard charging prosecutor who sought fame, approval and advancement through prosecuting wall st big shots at the expense of some moral center?

This character was later caught at the end of the book keeping an ex-juror as his mistress in a rent controlled apartment?

Or are those characterizations too general?

Ben Franklin said...

I’d guess that the Obama’s were actually better off than the Clinton’s were at the point Bill & Hill ran for president and co-president back in 1992. I seem to recall that Bill Clinton’s salary as governor was around just $36,000(thirty-six thousand dollars) per years. Hillary was making about $125,000 at the Rose law firm, a real commercial law firm. By contrast, the Obama’s were making slightly more even a decade ago, while neither was really as accomplished in terms of either a high ranking government official or a useful player in the private sector.

It is after the Clinton’s left office that they really cashed in, via book deals an Bill’s relentless speeches and deal making. There really hasn’t been that much grumbling about it in the MSM, although there should’ve been. It is as if the media now wants to make up for giving the Clinton’s all that favorable coverage, so now they make the same mistake in favor of Obama.

Buckaroo said...

Steve,
That's a pretty perceptive observation. I vaguely recall (although I couldn't come up with a citation on the spot) some study that looked at debates of non-specialist groups of people about budgets. These could be parent boards in a school, owners in a condominium association, etc. They found that the greatest amount of time was spent discussing items that cost roughly $10K. The convincing (to me, anyway) explanation was that smaller items were just too piddly to get worked up over and the really big ones were too abstract and too far removed from people's experience to get any traction (e.g., how many people can really say that the new gym should cost $1 million rathern than $1.5 million?) But we all have a feel for what $10K can get you and it seems big enough to matter.

From a different angle, Hill's and Barry O's various financial shenanigans should serve to remind us that we are not Sweden and that what may work there, i.e., socialism, (for the time being, anyway) might run into slightly stronger headwinds here. For example, Sweden had an enormously popular (young, female) government minister. There was then a "scandal" whereby it was revealed that she had charged a few hundred dollars worth of toys for her children (sic !) to her government credit card. Apparently she had repaid this debt before anything was published about it. But she still resigned. Sitting in Chicago, one doesn't know whether to laugh or to cry.

Ben Franklyn said...

Fact is, Clinton was a very popular president. The Clinton years were golden years for America.

The Lewinsky witch hunt disgraced the Republicans more than anyone else, by making them look like idiots out of the Scarlet Letter. The only thing that changed the tacit Evangelical tone of Bush Jr.'s presidency was 9/11.

This whole Obama-Republican smear campaign of "we don't want a repeat of the Clinton years" is coming out of la-la land.

Obama is tacitly referring to Bush and implying for blacks and young whites that we don't want older white people in charge anymore. I have no idea what the Republicans think they are implying by getting on that bandwagon. The fact that Republicans are getting on Obama's rhetorical bandwagon makes me wonder if they are simply washed up at the moment.

At least I can rest assured that good time boy John McCain is not going to spend our national resources finding out who gave whom a hummer. At least wars employ people and remind America's enemies who is boss.

Quercus said...

ben franklin,

In 1992, Clinton had been a southern governor for 12 of the previous 14 years. Arkansas might not be as corrupt as Louisiana or Chicago, but I'm sure it's corrupt enough for its governor to earn some private, bonus income. Didn't Whitewater and the cattle futures happen while Clinton was still governor?

Anonymous said...

This is why the morality of a man in politics is so important and why tells like histories of divorces, cheating, lying, threats, and extortion are important and revelent predictors of how much power will corrupt a man.

Low brows like the Clintons and Huckabees inevitably go hog wild when in power trying to sell or steal anything not nailed down. Only a well publicized outcries stoped both from selling even the furniture from the Whitehouse/AK governor's mansions.

However, the high-born also can be deft swindlers although it's not as clear if they would've acquired such wealth without trading political favors. Bush Sr. has done exceptionally well with the Carlyle Group and his Saudi connects in retirement. More unlikely, Gore has been invited to status and wealth via venture capital and media interests that he certainly would've have earned on merit.

That is why it was so disappointing to see Romney bounced by the MSM and conservative Christians. He obviously had the morals and money to best withstand the temptations of power and at least temporarily reverse the corruption of the POTUS office. That and the fact that he's was the only one who actually accomplished anything remarkable both in government and the real world.

Spawn of Yacub said...

It's amazing the media hasn't paid more attention to the huge fortunes Bill and Al have wracked up since leaving office. The last estimates I saw - well over a year ago - were $50 million and $100 million for Bill and Al, respectively. My guess is that they've done substantially better than the Dow over the past year.

What honest work could they have done that could have earned two lifelong career politicians that much loot? It's influence peddling, pure and simple.

Bill's huge fortune is to Hillary what Rev. Wright is to Obama - a major, untapped vein of scandal and controversy that could play off for McCain in the general election.

Martin said...

Of course, in this case, your neighbor with a cow aspires to be the Czar, so that he can get his hands on that palace full of rubies and diamonds.

When Ronald Reagan left office, he was offered (and intended to accept) $2 million from a japanese millionaire for a speaking tour in Japan. The press hounded him for it (and rightly so), and he eventually had to decline the offer.

It seems that Bill Clinton is doing the smae thing, although perhaps in smaller chunks. Of course, you might argue that Citigroup is an American entity - not a foreign one. Yeah, right. Citigroup probably has less loyalty to America than that did that japanese millionaire of 20 years ago.

It all goes to proove that the key to getting away with scandalous behavour, is simply not being the FIRST to get caught at it.

dearieme said...

"Hillary was making about $125,000 at the Rose law firm, a real commercial law firm." Yeah, but they were probably paying her that for being the Governor's wife.

Martin said...

"Ben Franklyn said...

The Lewinsky witch hunt disgraced the Republicans more than anyone else, by making them look like idiots out of the Scarlet Letter......

At least I can rest assured that good time boy John McCain is not going to spend our national resources finding out who gave whom a hummer."

Clinton was getting hummers in the oval office while conducting state business (like talking to congressmen on the phone). And you don't think that's shameful? And relevant?

So, if you hired a plumber to come to your place of business and fix the faucet, and he brought along a hooker to get him off while he was working, you wouldn't have any problems with that?

The President is OUR employee, just like that plumber is.

franklyn said...

With apologies to ben franklin - I didn't see your nick.

If my plumber is getting hummers in my kitchen, we have a problem. If he is getting hummers in his plumber mobile, whatev. What if the president rents porn or plays Super Nintendo or yegads, watches Nascar. What of it?

And what is the big deal with ex presidents getting paid to go on speaking tours? Give these guys a break. What else are they supposed to do in their twilight years?

Now, real estate zoning shenanigans: that is another story. That is directly misusing power to corrupt the system. That one does buzz my sleaze alert.

I remember when Bill Clinton hosted a talk with Steven Hawking and actually came across as passingly familiar with his work. Fat chance of seeing anything like that in the future, a president with any intellectual curiosity. Maybe Michelle can host a conference on the Isis Papers or Nuwaubianism (look it up, it's worth it).

tommy said...

Fox News indicates what they've shown so far is "just the tip of the iceberg" and that it has "hours of tapes" of Wright's crazy talk.

It's all right. I'm certain Obama just happened to miss every Sunday the good pastor spouted off.

I get the feeling Fox is going to drag this out real slow. Hannity is a real sleaze and will play this to a hilt. Wright has just provided McCain some ready-made political ads and heaven forbid the faces of Barack and Michelle are visible on any of these tapes during an occasion Barack claims he wasn't there.

Senator Obama is going to have to change his story on the matter just like he's been changing his story on the extent of his financial involvement with Rezko.

Obama may be the candidate of change, but the more things change...

Truth said...

Of course there's all that profit the Clintons reaped in through allowing all of the major southern US drug traffic to flow from Colombia through Mena Airport in Arkansas; but why split hairs, huh?

William said...

Fact is, Clinton was a very popular president. The Clinton years were golden years for America.

Yeah, and retirement is often referred to as the "Golden Years," then follows death.

Nearly all of the problems we now face, save the idiotic response to the 9/11 attacks, were present and growing during the Clinton years: growing technology transfers to India and China, often via H1B workers; soaring levels of legal and illegal immigration and declining enforcement; soaring trade deficits; the continuing decline of America's education system, ad infinitum.

Let's! said...

$250K as upper-middle class? I'm not saying you should divide lower/middle/upper into neat thirds since like you said there's a huge difference between the affluent and the really rich.

But $250K family income puts you at the very least in the top 4-5 percent. If that's not, at a minimum, lower-upper class, I don't know what is.

Of course the term "lower-upper class" is rare, confusing to some and doesn't carry the snide emotional baggage of the term "upper-middle class."

assetmgmt said...

>>…I'm sure that kind of eventuality never crossed Citigroup's mind when hiring Mr. Clinton. Instead, they clearly must have done a cost-benefit analysis of the value of Mr. Clinton's oratory and saw that his wisdom was indeed worth $100 per second.

I know about the financial services industry, and it just doesn’t make sense to consider speaking fees as a source of political bribery. First, these firms are huge, and Conference Planner A has no idea what the political motives of Executive B might be.

Second, it’s much more about client relations. Having Bill Clinton (and others) speak at your conference generates buzz for your firm. The fees that a firm like Citigroup can collect from a single institutional account can run into the millions of dollars. If the average annual fee from an institutional client was $250K, and Citi manages to attract or retain just one client as a result of hiring Clinton, then the speaking fee pays for itself.

Anonymous said...

Per "william",no one has pressed Hillary on what really happened with Osama bin Alladin. The story was that Clinton had several chances to grab that filthy S.O.B. but for whatever reasons,it never happened,much to the chagrin of our putative friends,like the Pakistanis and the Sudanese. Ditto for Marc Rich,who made so much money trading Iraqi oil on the black market. Why dont reporters ask some hard questions!?? As for Barry it comes out today that,oops,ha ha,he just remebered that Tony Rezko gave him more money than he had allowed before. "This time,I'm really telling the truth...y'all!" And $250,000 for a Hillary speech?? I had never heard of that one! But look,guys,Bill is trying to economize. he put his offices in Harlem...not downtown! -Josh

none of the above said...

ben franklin: Maybe, but the comparisons aren't simple. Chicago is *much* more expensive that Arkansas, and we've had consistent low-level inflation for the 10 or so years that separate the Clintons' and Obamas' situations, especially in housing. And failing local public services impose extra costs--if the local schools are bad, you have to send your kids to private schools or move to a better neighborhood; if the police and courts can't keep the streets safe, you have to move to a better neighborhood, install an alarm system, limit when and where you go, etc.

Anonymous said...

Anyone making 250k/year would qualify as Rich/Upper-Class anywhere in the US except New York, LA and DC. Since the cost of living in these places is so high (and virtually the entire mediacracy lives in these cities), upper-class status there requires at least 1 million/year.

Martin said...

"franklyn said...

If he is getting hummers in his plumber mobile, whatev. What if the president rents porn or plays Super Nintendo or yegads, watches Nascar. What of it?"

I don't own the plumbers van. We DO own the white house. It is the President's house. It is ours. And if you really don't think there's anything wrong with the President of the United States, the chief magistrate of the Republic, getting serviced by an intern in his - in our - official place of business, then you're beyond reasoning with, as far as I'm concerned.


"And what is the big deal with ex presidents getting paid to go on speaking tours? Give these guys a break. What else are they supposed to do in their twilight years?"

Play golf, write their memoirs, and collect their pension. Period.

"I know about the financial services industry, and it just doesn’t make sense to consider speaking fees as a source of political bribery. First, these firms are huge, and Conference Planner A has no idea what the political motives of Executive B might be."

Here's a hint: Conference planner A doesn't need to know anything. Executive B tells A to give $250,000 as speaking fees to politician C. Executive B then talks to politician C informally, on the golf course, at the hunting lodge, in the mens room at Davos, wherever. What are policitian C's inclinations thereafter? Probably a lot more in line with those of Executive B.

Speaking fees are an excellent way of bribing people - it's completely legit. The speaker really speaks, collects his dough, and reports it to the IRS. And as there seems to be no limit to what can be charged, it would seem to be a very lucrative form of corruption.

A lot better than what Edwin Edwards, a former governor of Lousiana, did. He claimed that the $400,000 windfall (i.e., bribe) that he got from casino interests was money that he had won playing craps.