In Defense of Barack Obama's Speaking Fees
How does a progressive know when his friends are getting cross with him? When he reads about it in the New York Times or The New Yorker. Former President Obama ought to know that now since he is the target of a Times’ editorial, complaining he is speaking to rich people for high fees.
The editorial writers do not like it. No siree.
They are fine with the $65 million he and Michelle Obama pocketed for their book deal. After all, they are “pathbreaking,” as the Times rightly says, and their thoughts about the White House years will be interesting to read.
It’s the post-presidency speeches that are a problem. Not only is the former president speaking to rich people, he is, gasp, keeping their money! “Why not elevate a new generation of political leaders and stay true to his values,” the editorialists say, “by giving his speech fees to his foundation and other charities focused on those goals?” The Times seems to think Barack lost his bearings on the way to Sherwood Forest.
Are there any reasonable objections to high speaking fees?
What's wrong with any retired politician speaking to very rich people and pocketing their money? One can imagine several objections, some quite reasonable. Let's see if any apply in this case—or any others.
It would be hypocritical of Obama, a lifelong advocate for the poor, if he were not also speaking to other groups who cannot afford him. Good point, if true. But there is no evidence it is. He is just beginning his speaking career but has already begun speaking to community groups and aspiring young people.
It would be problematic if his speaking fees were buying access to someone expected to return to government service and dole out favors from the public trough.
I can't recall any political figures doing that recently. If they had, I’m sure the New York Times would be all over it. To pay someone, say $700,000, for a speech when you expect them or their spouse to be in high office soon, might seem problematic if the expectation is that the transaction greases the way for future access. Legal, but sleazy.
True, some part of these high fees come from the speakers’ celebrity, to make donors feel the frisson of proximity to power and glamor. How much? An approximate calculation can be made easily enough. Simply take Bill, Hillary, or Chelsea’s speaking fees a couple of years ago and subtract their “going out of business” fees today.
Obama’s fees would also be ethically questionable (but still legal) if he were not also raising funds for public projects. But he is. Granted, they are mostly for his presidential library but that is understandable. It needs over $1 billion.
Whether it would be better to allocate the speaking fees to a charity depends on whether the charity itself is self-serving and self-aggrandizing. Presidential libraries certainly are. They are modern America's equivalent of Pharaoh’s tombs. The problem is compounded because all presidents begin raising money privately for these monuments while they are in office. The donors’ names can be kept secret. That’s normally fine for charities but, in this case, the donors could well have business with the president and his administration. That would be worth the Times’ attention.
But, of course, the gold standard for self-serving, un-audited personal foundations is the Clintons’ enterprise. If only the Times had investigated it seriously when it really mattered to voters.
Finally, Obama's speeches would raise questions about hypocrisy if he were saying one thing to rich people behind closed doors and something very different to ordinary people in public. We have no reason to think that he is. If we did, we might ask him to release transcripts. He would not be legally obliged to do so, but refusing would certainly indicate he had something to hide.
If the NYT ever discovers a person like that -- someone who hides his (or her) private comments to the wealthy financiers from ordinary voters -- its editors will certainly want to highlight it and use the paper’s ample resources to publish the secret transcripts. So far, crickets.
What Else Is Wrong With the Times’ Slant?
The basic problem with the editorial is not only its hypocrisy and moral smugness, it is a failure to understand some key features of market economics and the ethics that should govern them.
First, it is possible to do well for yourself without making others worse off. That is Adam Smith’s most fundamental contribution. Yet it is the single most ignored lesson in all economics. Steve Jobs did not get rich by making others worse off. He got rich by creating things people really wanted. That hasn’t always been true in human history, of course. Grand antebellum plantation houses were built on the backs of slaves. So were the pyramids. But nearly all wealth created in today's America is done through voluntary market transactions, which make all parties better off.
Second, although progressives are right to worry about inequality (and conservatives wrong to ignore it), they should also worry about crony capitalism. Economists call it "rent extraction," and the Clintons practiced it on an industrial scale. The government has huge financial prizes to hand out. Every government does. That's why shrewd operators ingratiate themselves to the people who award those prizes. That's why road construction companies take public officials out for steak dinners. That's why some pay super-high speaking fees and others donate to foundations beloved by the local mayor. They hope to be repaid amply—with public money.
That is not why people are paying Barack Obama. They want to hear him because he is a historic figure and a celebrity, not because he is expected to direct government money their way. The difference is crucial.
Again, if the Times finds anyone doing something more troubling, perhaps at the very heart of the Democratic Party for the past three decades, they really should let us know.