Should being President make one rich, how rich?

April 30, 2017

                                                   White House | by Tom Lohdan/courtesy of Flickr

 

There is no doubt that Obama will be a rich man.

 

In one of his first acts to earn money since leaving the presidency, agreed to make a speech to a Wall Street Investment firm. He will be paid $400,000, a sum equal to what he was paid in salary for each of the eight years he was president. In addition to his salary while president, Obama got a $50,000 annual expense account, a $100,000 nontaxable travel account, and $19,000 for entertainment. And he got to live in the White House rent free, and to travel wherever on the Presidential plane. Oh, and Obama will get the usual presidential pension starting at $207,800 in the first year he is no longer president. And he gets health insurance coverage.

 

If Obama made just two of those $400,000 speeches a year he will be earning $800,000 annually. That would put him among the top 1% percent of all earners in the United States. And the suspicion is that Obama's earnings could, without much effort, easily top a few billion dollars a year. Compare this to the the 2015 nationwide median household income of $56,516. On any account, the Obama's will be rich, not even counting what Michelle will earn. In fact, Michelle and Barack have already signed a dual book deal with Random House for a reported $65 million.

 

So, in the age of heightened anxiety about growing income inequality, is all this unseemly? Probably. And it's symptomatic of the high incomes of the one per centers - the group Obama will join -  relative to the median household income in the United States.

 

Obama didn't become rich upon entering the White House. In fact, his income in 2009, in just his second year as president, as shown in his income tax return was over $5.5 million. Though, even here we can see the effect the presidency had on his earnings. Most of his earnings in 2009 were from the sale of his books. It is unlikely his book sales would have been as high, had he not been president.

 

What if Barack Obama had never become President of the United States? What would his earnings potential have been? That can't be answered conclusively because it would depend on what other choices he would have made, and what opportunities he would have come across, and how he would have taken advantage of them. But let's have a look at his resume.

 

Barack Obama has a bachelor's degree in political science from the ivy league Columbia University and a law degree, Magna Cum Laude, from Harvard University, and while at Harvard he became president of the Harvard Law Review. Then from 1992 to 2004 he was a lecturer/senior lecturer at the University of Chicago Law School. What if he had remained teaching law and rose to the rank of professor?

 

Well, according to salary.com, the median salary for a law professor in March 2017 was $159,427. However, with his resume, Obama may have not been just the median salary earner in the profession. He may, in fact, have reached into the upper ends of the salary range. Over 90% of law professors were earning $275,000 or more annually.

 

But that is still a far cry from what Obama will be earning from this point on.

 

Obama isn't the only former president to become rich after leaving the oval office. Before him, the Clinton's did it. In 1989, then former president Ronald Reagan earned $2 million for a few speeches in Japan. George W. Bush who succeeded Clinton as president was quoted as saying he will give some speeches to "replenish the ol' coffers," and he had an estimated net worth of $20 million.

 

Jimmy Carter was one of the least money grabbers after leaving the presidency, dedicating his post presidential years to peace keeping missions and humanitarian causes in America and around the globe. But he was already well off, having an estimated net worth of $7 million.

 

Poor Harry Truman had a measly $1 million net worth in his post presidential life. But in today's dollars that would make Harry a billionaire. Why in the world did he continue to live in that modest clapboard house in Independence, MO?

 

Of course, today we have multi-billionaire Donald Trump in the white house. Is he bent on capitalizing on his presidency to making himself and his family many more billions?      

 

 

 

 

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