It seems that the shelf-life on political promises is exceedingly short these days. Last week, it was revealed that yet another promise, this one made less than four months ago, is slated to go onto the ash heap of history. This isn’t a reference to the Republican promise to repeal Obamacare or President Trump’s inability to fund his fabulous wall. Today we refer to Barack Obama’s reversal on going to Wall Street to cash in on his ex-president status.
It seems like only yesterday. As the Obamas readied themselves to move out of the White House and Donald Trump prepared to take the oath of office, then-President Obama took a few moments away from packing his golf gear to speak with Steve Kroft of CBS News.
Kroft queried the president about his plans for the post-Obama era. “You’re not going to go to Wall Street, make a lot of money?” Kroft asked the soon-to-be-unemployed statesman.
“I’m not going to Wall Street.,” Obama stated. “The amount of time that I’ll be investing in issues is going to be high. But it’ll be necessarily in a different capacity.”
Given President Obama’s vaunted reputation for veracity, we should be unsurprised that a deal has already been made that will earn the former critic of Wall Street greed a cool $400,000 for a 60-minute speech to a conference hosted by investment firm Cantor Fitzgerald this September. For those of you doing the math, that’s an hourly rate of $400,000.
This means that the president’s rates have already gone up. Newsweek reported that the former warrior against income inequality has already raked in $400,000 for a 90-minute interview with a presidential historian in Manhattan. That translated to a paltry rate of $266,666 per hour. Newsweek’s Chris Riotta notes that among the topics discussed was – wait for it – income inequality. I’m guessing that the president didn’t address how he is making incomes more unequal with his speaking fees.
Speaking fees aren’t Obama’s only source of income as he settles into life as a private citizen. The ex-president also receives a $200,000 pension – roughly equivalent to his rate for a half-hour speech – at taxpayer expense. He has also inked a book deal worth $65 million or 162,500 speeches.
The obvious question is why Wall Street bankers would want to pay megabucks to listen to a man who called them “greedy” and painted them as the root of America’s problems. The answer is two-fold. First, Wall Street is in New York, one of the most liberal cities in the country. Even many Wall Street capitalists consider themselves social liberals and fans of Obama despite his failure to invigorate the economy.
The wealthy often vote Democrat. The New York Times notes that the median income of Democrat households is higher than that of Republicans. Democrats also represent a majority of the most affluent districts in the country. The 2016 election was no exception with Democrats winning voters who earn less than $50,000 annually as well as those with incomes above $200,000 according to CNN exit polls.
Second, Wall Street made a lot of money off President Obama. Fortune points out that the stock market rose an average of 12 percent per year under Obama. This is the third best showing for the markets of any president since World War II. Only Bill Clinton and Gerald Ford saw better performance by stocks.
Of course, the Obama stock market, with its 140 percent jump in the Dow, benefitted from the fact that Obama took office four months after the largest single-day decline in US stock market history, September 29, 2008, when the markets lost seven percent of their value in one day. Even though much of the Obama market was simply making up lost ground, markets did reach record highs during his term. In fact, the stock market was one of the few bright spots of the Obama era.
As a free trader, I don’t begrudge Obama’s success in his dealings as a private individual with other private companies. The former president’s capitalist tendencies are showing. He is simply charging what the market will pay for his services.
I only wish that Obama and the other Democrats would allow the rest of us the same courtesy.