I’m not in the tank for Bernie or Hillary. I would describe myself as a Republican leaning Libertarian. That said, I love following political races and enjoyed the Democratic debate this past Thursday. One of the most contentious moments was when Hillary accused Bernie of attack by insinuation, saying that he is calling her ‘bought.’ For those that don’t follow politics, the issue is whether Hillary is influenced by her paid speeches. She has made millions of dollars from these engagements since leaving office. Let’s take a look at why Sanders has been able to make this such a big issue in the Democratic race for President and how lessons from this can apply to your everyday life.
How Much Money Have the Clintons Made Since Leaving Office
The salary of the Secretary of State is $203,700 a year. The salary of the President of the United States is $400,000. Clearly, even at its highest levels, the government is not a place to go to become rich. However, that truism has become less and less true over the past several decades. When the federal government was smaller and less involved in everything from wind farms to personal healthcare decisions, there was less money to be made in being a former federal employee.
In 2001 at the end of the Clinton presidency, the couple was effectively broke. By 2002, they had a modest net worth of about $4 million. Having served in the public sector all their lives, the Clintons had not previously had the opportunity to become independently wealthy. According to Forbes, they have made $230 million since the end of the Clinton White House. Most of this comes from payments for giving speeches, while a smaller but still significant portion comes from book royalties. In 2014, Secretary Clinton got $14 million for her book Hard Choices. However, the lion’s share of both of their income is still from speeches.
The average payment per speech is over $200,000. Of the $230 million total income, $153 million of it is from speeches, according to CNN. Compare that to the Secretary of State salary above. Secretary Clinton is compensated more for a two hour event than she is for an entire year representing America on the world stage.
Insinuating She’s Bought Is Wrong, But So Is Saying She’s Not Being Influenced
Ben Franklin believed that government should be run by wealthy citizens. Not because he wanted to give them undue influence, but rather because he felt that the wealthy would be more immune to the attempts of monied interests seeking to gain favor.
Hillary Clinton is incensed that anyone could say that she would change her vote based on how much money is given to her by the private sector. Ignore the fact that politicians do that all the time. Why would a company, trade group, or Wall Street Firm want to hear from Secretary Clinton? The answer is obvious, it is because she’s powerful. Why would she get so much more money speaking than former Secretaries of State like Condoleeza Rice or Madeleine Albright? It’s because she is expected to have a 50/50 shot at the highest office in the land.
Goldman Sachs does not need to pay $225,000 to hear her say nice things about the company. Rather, these events are private, catered functions that often allow the individuals in the audience a private conversation or two with one of the most powerful persons in the world. The Clintons have given over 700 of these speeches, so it’s fair to say that any one of them probably does not cause undue influence.
However, many policy decisions do not involve a vote. It could be an executive action, a nomination, an abstention, a nonenforcement of an existing regulation, and other situations. When a junior Democratic Senator wants to sponsor a bill allowing Tesla to compete directly against the national car dealer network, a simple wave of the hand from a President Clinton could be enough to kill it. When the Consumer Financial Protection Bureau wants to put in place regulations targeting too big to fail financial institutions, a call by a mid level White House official could soften those rules and save Wall Street millions of dollars.
By Paying Big Dollars In Speaker Fees, the Private Sector Is Buying Access
When the Big Pharma or Wall Street wants to buy a political insurance policy, they would find few high return ways to spend their money than bringing in former and future politicians with paid speeches. It’s much more difficult to bite the hand that feeds you. The Clintons were broke, and now they’re not, and the vast majority of the reason is because hundreds of private sector groups wanted to pay $200,000 each to have their ear for a couple hours.
This is not just true for the Clintons. Other brand name former and future politicians receive big money for their speeches too, Republicans as well as Democrats. In a general election, Secretary Clinton’s paid speeches would be a non issue because the average independent voter isn’t concerned with those kinds of things. However, in a Democratic primary where voters want more regulation on Wall Street and the private sector, they are right to doubt the ability to serve two masters.
Goldman Sachs is full of some of the most sophisticated people on the planet. They know that if they can get big name policy makers in the door and whisper in enough of their ears that they stand a better chance of making more money. That’s their job. I don’t think Hillary is a dishonest person. I just think she is a politician and a human being subject to the incentives that influence the rest of us.
Hillary Is Influenced By Her Paid Speeches, and So Would Anybody
I personally don’t believe that it’s healthy for the President to have a combative relationship with the private sector. However, if you want someone who is free from influence and thus will be hard on the companies and individuals making money in this country, by all means Senator Sanders is your candidate.
Hillary is responding in the way that anyone would if they were accused of being unduly influenced by their incentives. However, consider the case of car salesmen or commissioned financial advisors. No matter how ethical they are, they are always going to tell you to buy a lot of car and a lot of life insurance. When your real estate agent tries to sell your house, they will be looking for a price that’s fair and not the price that maximizes every dollar of value. The reason is that they get paid a high amount if the house sells, and only a little bit more if it goes for a few thousand extra. They make far more money selling more houses at fair prices than selling a few houses at excellent prices.
In every business transaction, you have to think what the incentives are from the other side. Incentives influence everything we do in our capitalist economy, from how many procedures doctors perform to how eager furniture salesmen are to close a deal regardless of your credit score. Politicians are not special and apart from the incentives that govern the rest of us.
I feel as if Hillary and Bill Clinton have a mutual ambition for her to win the White House, but they had a financing problem. Campaign finance has changed, with big money having much more influence than when Bill Clinton was President. To pay for a White House bid, the Clintons needed a lot of money, and the easiest way to get a bunch of it is to give a lot of speeches. In exchange for the money, the paying recipients of their speeches expect a friendly administration or at least one that’s not hostile. Republicans and Democrats both will be influenced by whichever parties give them campaign contributions and personal checks when they’re not in office. If you have a problem with that, you need to try and elect Bernie Sanders or Donald Trump.
Think Hillary is influenced by her paid speeches? Do you think the media is being too hard or unfair with her? Comment below!