Obama's Big-Money Paid Speeches Aren't So Bad
President Barack Obama is once again receiving big-money fees for giving talks to financial firms, according to a new report from Bloomberg, but is that really so bad?
The news is bound to infuriate the Bernie Sanders wing of the Democratic Party, which is always furious at Wall Street and is still miffed that the Obama Justice Department only sent one banker to jail for the financial crisis. And it’s likely to be greeted with a big yawn from donor-class Democrats and Obama fans who see it as a former president, like so many others, enjoying his electoral retirement getting paid by a vibrant sector of the economy. The answer is somewhere in between.
First, the new facts: Bloomberg reported Monday that Obama spoke before the Carlyle Group last week, at the famed private equity company's headquarters in Washington, D.C., where he reminisced about his White House days and talked policy. The former president was criticized back in April as he was making his return to the public stage when it emerged that he’d accepted a $400,000 fee for agreeing to speak at a health care conference sponsored by Cantor, Fitzgerald, an investment banking firm that lost more than 600 people on 9/11. Bloomberg also reported that Obama recently received the same amount from Northern Trust Company.
So what’s the big deal? It’s not as if Obama is running for office, which makes his speeches a lot less controversial than those given by Hillary Clinton as she began her 2016 bid for the presidency and could have been in a position to directly affect policy for those companies. And it’s not as if Obama is the first ex-president to rake in big bucks. After all, Ronald Reagan crossed the million-dollar mark for two speeches he gave in Japan after leaving office in 1989. Buckraking has become a big part of the post presidency as presidents seek comfort and erect huge presidential centers. Obama lives in a nine-bedroom mansion in Washington, D.C.’s tony Kalorama neighborhood, a few blocks from Jared and Ivanka Trump. Amazon founder Jeff Bezos also owns a house nearby, The Washington Post reported.
Complaining about Obama’s post-presidential speaking fees may seem absurd during the Trump era when the president doesn’t bother with divesting himself from his business. Trump merely turned over their management to his sons, Donald Jr. and Eric. As they profit, so does he, with each new foreign deal or each new lobbying group filling the Trump hotel in Washington, D.C. And since Trump is not disclosing his tax returns, we’re still left guessing about how much he’s making and to what degree his policies, like his recently unveiled tax cut ideas, would benefit him.
But the Obama controversy does raise questions about how the ex-presidents club has become a big business in which former commanders-in-chief haul in cash ad nauseam, and build giant centers and libraries in their names in ways that are still jarring.
It wasn’t always this way. In the early days of the Republic, most presidents were wealthy and retired to their estates; think George Washington and Thomas Jefferson. Ulysses S. Grant changed the game. When he left office in 1876, Grant was so broke that he wrote a best-selling memoir that financed his last years.
Still, buckraking was pretty uncommon. When Harry S. Truman left office in January 1953, he took the train back to his hometown of Independence, Missouri. He had practically no savings—having been a haberdasher and politician for most of his life—just a measly $112.50 a month pension from the Army for his service in World War I. He declined several highly paid positions, saying it would be unseemly. "I could never lend myself to any transaction, however respectable," Truman later wrote, "that would commercialize on the prestige and dignity of the office of the presidency." (He did sell his story to Life magazine, but that was about it.) Truman’s successor, Dwight Eisenhower, and Lyndon Johnson, had quiet post presidencies writing books and returning to their homes.
But things changed in the 1970s. Richard Nixon, eager to redeem himself after being forced to resign because of the Watergate scandal, aggressively sold books. Gerald Ford charted new territory by serving on corporate boards, a first for an ex-president. Ronald Reagan crossed the million-dollar mark for those two speeches in Japan. Bill Clinton took in a cool $65 million in speaking fees between 2001 and 2009. And before Obama’s first term was over, George W. Bush had already made some $20 million.
But it’s not as if presidents need the money from corporate speeches. After Truman’s near decent into penury, Congress passed the Former Presidents Act of 1958 which gives them a healthy pension, now $200,000 a year plus an office, assistants, and Secret Service protection. Earning money through memoirs—as opposed to payouts from corporations—is still incredibly lucrative. Barack and Michelle Obama have reportedly received some $65 million to write books about their White House years.
Part of the reason presidents earn so much personally is that they’ve become determined to erect huge edifices to themselves. The government provides the archives from a president’s time in office and staff the library, but it’s up to the former president to build the building that houses it. The first such presidential library was set up by Franklin Roosevelt, but it only cost around $10 million in today’s dollars. By contrast, the George W. Bush Presidential Center at Southern Methodist University cost $500 million and Obama’s forthcoming center at the University of Chicago could top a billion.
There’s no returning to Truman’s modest time. (After he returned to Independence, Truman and his wife Bess took a driving tour of the U.S., sans Secret Service, surprising farmers and waitresses and everyone they met along the way.)
But Jimmy Carter has found a middle ground that seems to make sense. He "seldom accepts speaking fees," The Associated Press wrote in 2002, "and when he does he typically donates the proceeds to his charitable foundation." He lives a more modest life in Plains, Georgia. It’s not so glitzy but it doesn’t require a steady stream of special interest money to sustain it. That seems like a healthy balance between total abstention of giving well-paid speeches and supping at the trough.
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