Thoughts on Post-Presidential Incentives

Back in 1999, William Green and Joan Caplin wrote an article for Money on how former presidents come to amass great wealth, looking ahead to the Clintons’ economic future. Gerald Ford was particularly conspicuous for having used the prestige associated with having served as president to dramatically increase his personal wealth:

Gerald Ford was no millionaire when he replaced Richard Nixon in 1974. His net worth in late 1973 was $256,378. He had $1,282 in cash in the bank, he owned one stock, $3,240 worth of Central Telephone of Illinois, and he had $1,299 in the Stein Roe Farnum Balanced Fund.

In 1972, the year before he became Vice President, Ford grossed $68,000 as a congressman from Grand Rapids, Mich. So the presidential salary of $200,000 was a windfall. “Ford was a poor boy who made more by being President than he’d made in any other job he ever had,” says Robert Hartmann, his Chief of Staff when he was Vice President.

But it wasn’t until Ford left office in 1977 that the money really poured in. Ford hired an agent from the William Morris Agency who negotiated a sweet TV deal, with Ford earning a fat income for his appearances on NBC. Ford and his wife Betty agreed to write their memoirs, and they pulled in a $1 million advance for the two books.

Breaking with presidential tradition, Ford also joined the boards of a slew of companies, including Amax and Travelers Group, and he signed on as an “adviser” to American Express. The Los Angeles Times calculated that he hauled in $541,300 in 1986 as a corporate director and consultant. Bill Seidman, a friend and economic affairs assistant in the Ford Administration, says he remembers questioning Ford’s decision to become an American Express adviser: “I told him I didn’t think it was the right thing to do. He did it anyway…. He’d been an honest congressman for 25 years and he had four kids. He had not seen the sunny side of the street financially, and I don’t blame him for wanting to see it.”

And Ford continued to earn prodigious sums until shortly before his demise.

More recently, Al Gore has built a fortune as an investor and entrepreneur. Estimates of Gore’s net worth vary, but the consensus view is that he is a centimillionaire. Though Gore’s entrepreneurial ventures don’t have an unblemished record of success (Current TV’s troubles have been very much in the news), his brand was sufficiently valuable after his highly controversial defeat in the 2000 presidential election that he was given access to a number of lucrative investment opportunities in the technology world, thanks in part to his close relationship with John Doerr and other noted Silicon Valley venture capitalists. He is also chairman and co-founder of Generation Investment Management, among other ventures in the financial space. 

One gets the strong impression that Gore’s financial success has been closely related to his public prestige. Gore’s celebrated film An Inconvenient Truth and his subsequent Nobel Peace Prize greatly enhanced his global stature. Indeed, it is hardly surprising that he chose not to run for president in 2004, as a rematch would have had a tremendously high opportunity cost. And his decision to endorse Howard Dean helped further rehabilitate his cultural as well as his political brand. As late as the latter days of the Clinton administration, Gore was seen as belonging to the right of the Democratic party, having championed an idiosyncratic mix of cold war hawkishness, fiscal rigor, and environmentalism throughout his national career. He had been sharply critical of more left-leaning Democrats like Jesse Jackson and Michael Dukakis. During his 2000 presidential campaign, however, he established himself as a stalwart progressive profoundly concerned about inequality and related issues, thus earning him the allegiance and enthusiasm of many culturally influential and affluent voters. His affect, and his self-conscious celebration of intellect, helped him build a brand that connected him to the small but politically powerful coterie of women and men who had made sizable fortunes during the late 1990s in technology and finance. 

Though there is no question that Gore’s reinvention was political in orientation — that it was designed to help him secure the presidency, and to distance himself from the (seemingly) problematic legacy of President Bill Clinton — it proved in hindsight to be extremely savvy. 

Life is an iterative game, and it seems likely that the experience of Ford shaped the post-presidential careers of his successors, e.g., it is now expected that former presidents will give lucrative speeches. After Clinton and Gore, however, a new vista has opened up. Instead of merely leading a prosperous life, both men have demonstrated that one can retain considerable political and cultural influence through charitable efforts on a grand scale and through deep involvement in the corporate world.

Different individuals will, of course, have different preferences. Some will prefer to emphasize cultural prestige over the attainment of wealth. Or rather different individuals will choose different points along a complex continuum. One could choose to work in the oil and gas industry, recognizing that it will damage your cultural capital in some quarters while enhancing it in others. You get the basic idea.

I see Barack Obama’s decision-making over the past week through this lens. If we accept the story being offered by anonymous White House sources in Politico, the president fully intended to endorse same-sex marriage at some point before November. Yet Joe Biden “forced his hand,” thus causing considerable strain between the two men. 

Now, however, the president is capitalizing on the opportunity presented by his evolution. A fundraiser held the night after his announcement at the home of television and film actor George Clooney raised an extraordinary $15 million, per a report in the Los Angeles Times. This raises a number of interesting conceptual questions in itself, e.g., were there considered discussions of the relative value of crafting a policy position that would be less likely to alienate non-college-educated, culturally conservative swing voters in swing states in the Midwest versus one that would generate enthusiasm among affluent donors? If we believe that swing voters are relatively indifferent to policy nuance (anonymous White House sources have suggested that voters believed that the president supported same-sex civil marriage regardless of his stated position, so the electoral benefit of not explicitly doing so was minimal) but that television advertising and expensive, labor-intensive voter contact efforts do make a difference, it seems reasonable to emphasize fundraising. 

But let’s look beyond this strategic calculation from the perspective of the campaign and consider the strategic calculation from the perspective of the president’s own interests. Unlike Ford, Obama is a high-earner, as is his wife. Both are high human capital individuals with prestigious law degrees, and Michelle Obama has worked in the upper echelons on the non-profit sector. The president is also an accomplished author, who generated tremendous book sales during his unlikely rise to political prominence. It is easy to imagine that both of them will be extremely well-placed to earn large sums after leaving the White House, whether that is in 2013 or 2017. This doesn’t mean that the Obamas are immune to financial considerations. As Jim Geraghty has observed, Jodi Kantor’s book offers great insight:

Even the president made uncomfortable jokes about why his wife needed so many things. Behind the scenes, aides said, the Obamas were concerned about money: the president’s books could only sell so many copies, and it would be years until he could write more and the first lady could write her own. From vacation rental homes big enough to accommodate the Secret Service to all the personal entertaining they did at the White House, their lifestyle had grown fearsomely expensive.

This might sound ridiculous, but as we often hear, inequality is fractal. Many of the people the president encounters, including many of his subordinates, have far more money than he does. It is absolutely unimaginable that this keeps him up at night. He is at the top of a very steep hierarchy, and he is consuming a tremendous amount of prestige. But as the father of two young children who has long had a keen interest in finding the most demanding, strenuous, and visible work he can, he presumably gives at least some thought to his earning power. There is no question that he’ll be a wealthy and influential man. Yet he does have some say in terms of how wealthy and influential he will become, and how he might use this wealth and influence to achieve broader objectives.  

Here we return to the example of Al Gore. Had Al Gore served as president, he would have no doubt alienated many people in the course of trying to retain power. Instead, he’s remained a (relatively) untouched vessel for the hopes and aspirations of his admirers, and he has had the luxury of taking a number of stances that would have proven extremely problematic had he remained in electoral politics yet that have greatly enhanced his reputation in the elite circles in which he travels. It is not obvious that Gore’s (semi-) defeat in 2000 was the worst outcome for his personal well-being. Had Gore remained “political” during this period, or rather politic; had he been less willing to characterize those with whom he disagrees as enemies of enlightenment and progress, etc., it is likely that he would have sold fewer books and movie tickets, and also that he would have generated somewhat less enthusiasm in the right circles.

Let me emphasize that I don’t assume that these calculations are constant, self-conscious, or exact. Rather, I think that these shifting incentives color our interpretation of the choices before us. 

At his Los Angeles fundraiser, President Obama made the following remarks:

“Obviously yesterday we made some news,” Obama said to applause. “But the truth is it was a logical extension of what America is supposed to be. It grew directly out of this difference in visions. Are we a country that includes everybody and gives everybody a shot and treats everybody fairly and is that going to make us stronger? Are we welcoming to immigrants? Are we welcoming to people who aren’t like us — does that make us stronger? I believe it does. So that’s what’s at stake.”

In light of the fact that until relatively recently, Barack Obama had taken a very different view of same-sex civil marriage, this seems like an odd pronouncement. Yet there is no question that his remarks made a strong impression on the relevant audience. 

Had Barack Obama failed to change his position around now — had he been defeated this November and, say, signed a petition of cut a television advertisement in favor of same-sex civil marriage in 2013 — how might affluent, socially liberal individuals for whom same-sex civil marriage is an issue of vital importance have interpreted him? One assumes that they’d see him in mostly the same way, i.e., as a good and honorable man undone by an intransigent Republican opposition, with a certain level of ingenuousness about the unbelievable ruthlessness of his political opponents, etc. Now, however, he looks more like a man of courage and principle, willing to take the fight to people who (remarkably) don’t believe that America is “a country that includes everybody and gives everybody a shot and treats everybody fairly,” and who do not welcome immigrants or people who aren’t like us, etc. 

Having offered an empathetic and in many ways quite intelligent (if fundamentally unsound) characterization of working class white voters as people full of bitterness, who cling to guns and religion and antipathy to people who aren’t like them out of a profound sense of dislocation caused by rapid economic change and the deterioration of their labor market position, the president must recognize that his characterization of the central disagreements in the so-called culture wars will prove alienating to at least some people who would at least consider voting for him. 

Yet even the savviest politician isn’t simply governed by political calculation. We want to be esteemed by the people for whom we have great esteem. We value the opinions of the people we think of as intelligent and thoughtful, and we want them to think of us in the same way. When these people also serve as gatekeepers in the economic and cultural spheres, this is all the more important.

I don’t know if Barack Obama will want to go the Gore route or if he’d prefer to, say, take on a low-lift teaching position as a university professor at an elite U.S. university while running a vast charitable concern. Perhaps he’ll want to pursue some combination of both. I do think that his set of post-presidential options has become somewhat more attractive this week, even if he has suffered a slight political reversal. 

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

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