A Capital Writing interview with the author of Filthy Rich Politicians.
A Capital Writing interview with the author of Filthy Rich Politicians.
As part of a project for Capital Matters, called Capital Writing, I’ll be interviewing authors of economics books for the National Review Institute’s YouTube channel. This time, I talked to columnist Matt Lewis about his book Filthy Rich Politicians. Below you will find an edited transcript of a few key parts of our conversation as well as the full video of our interview.
Dominic Pino: Being filthy rich, it’s usually something we think about with CEOs or actors or entertainers or people like that. But a lot of politicians actually end up making a lot of money.
Matt Lewis: Yeah, I think it’s really two parts. First, rich people tend to get elected, so it’s self-selecting. And then once people get elected, they tend to get richer. I think that’s the more troubling part of this, to the degree that it’s troubling. I would say it’s a more recent phenomenon whereby this is becoming problematic, and I think it’s beginning to erode trust in our elected officials and our institutions, and partly because of the sense that they are using their perch to feather their nests.
DP: And when you say “feather their nests,” that includes the other members of their family too a lot of times, right?
ML: Absolutely, I have a whole chapter in there about spreading the wealth around. And it kind of works both ways. There are a lot of politicians who made their money or who got rich by virtue of marriage. And then there are a lot of politicians who once they get elected, not only do they themselves get rich, but their entire families essentially get on the payroll. You know, in the case of Joe Biden, for example, going back to his presidential campaign in 1988, the Atlantic reported he raised about $11 million for that presidential race. And about 20 percent of it went to the Biden family or companies that they worked for. And so, you know, again, it’s not just the politicians, but it is their friends and family who oftentimes reap the benefits as well.
DP: When you look at the salary for a House member, it’s $174,000 a year. When you look at the salary for the president, it’s $400,000 a year. And obviously that’s a lot of money compared to the median household income in the United States. And of course, these are people that were asking to do really serious work. And so it makes sense that it would be a relatively high-paid job, but that doesn’t explain how these people become millionaires and it doesn’t explain how they, in some cases, become multimillionaires. So, what is it that’s going on that allows them to get so much more money than the salaries that they receive?
ML: Nancy Pelosi, for example makes $200,000 a year, give or take. She would have to work 500 years at that salary to have her current net wealth. And that money primarily comes through stock trading by her husband, Paul Pelosi. I think that’s very common for members of Congress, that their wealth is certainly not by virtue of their salary, but by virtue of investments. In the case of the Pelosis, some of these investments look very suspicious, very sketchy, look very much like insider trading.
But I think we’ve gotten to a point where it’s becoming more problematic. We’ve always had rich politicians. George Washington was incredibly rich, as was Theodore Roosevelt. Presidents especially have been, by and large, much richer than the rest of us. We are now at a point, though, where members of the House of Representatives, the lower chamber that’s supposed to be the closest to we the people, are something like twelve times richer than the average American household. And I think it was in 2014 when the average member of Congress became a millionaire.
In the last three or four decades, the gap has widened between how rich the politicians are and how rich we the people are. I’m not into class warfare, but I do think at a certain point it becomes an issue and people begin to feel like the game is rigged. I think that sense has been helped along by some demagogic politicians, but nevertheless, there is reason to believe that the game is rigged.
DP: You say you’re not a fan of class warfare. I’m not either. But the point you’re making in the book is basically that if we want to remain a society where we don’t engage in class warfare, we should kind of stop giving reasons to believe in class warfare, right? These things that you point out about members of Congress being so much wealthier than the average American kind of does give some reason behind that, and it doesn’t have to be a demagogic argument against it, right? You can make a principled case, and I think that’s what you’re trying to do in the book.
ML: Definitely, and I propose reforms that I think would certainly not fix the problem, because I just don’t believe in the perfectibility of anything, but I do believe that we can have reforms that will mitigate problems. I’ve got probably 15 proposals and reforms that at some degree or another would help to mitigate these problems, but banning stock trading for members of Congress, I think is the most obvious thing we could do because there really is a sense — and this is a bipartisan problem — there really is a sense that members of Congress are using insider information, not only to get rich, but to avoid losses that other normal people might suffer, by using information that only they have access to. I do think that’s especially corrosive when you’re out there working a hard job and you’re seeing these politicians, these fat cats getting rich. And by the way, then of course they pay a lower tax rate than you would make off of your salary. So I think that’s contributing. I don’t think this is the cause of our populist zeitgeist, but I do think it’s a contributing factor.
DP: One of the problems that you talk about in the book is as this relates to marriages. And one of the problems with that, in terms of reform is that there is going to be a certain amount of intermarriage within the class of high-level politicians, just like there’s intermarriage within every different industry that exists everywhere else in the country. And obviously a spouse is going to support you in your campaign, or at least you certainly hope they would. So what kind of reforms are possible there to make that seem less fishy, while also understanding that there is going to be a certain amount of mixing that’s just inevitable?
ML: I think maybe the most prominent example of this was Roy Blunt, former senator from Missouri, who I think three or four of his children are lobbyists. His wife was a lobbyist. I think she was a tobacco lobbyist. And then he retired and went to work at a lobbying firm. And by the way, his opponents tried to use it against him in his last campaign. Nobody cared. Didn’t work.
Obviously I think that you have to really go out of your way to avoid even the appearance of impropriety and to try your best to avoid conflicts of interest. Having said that, you know, Roy Blunt’s wife was a professional lobbyist when they married. Is she supposed to quit? Is he supposed to quit being a senator? One of Blunt’s sons was the governor of Missouri before becoming a lobbyist. Can’t he be a lobbyist? He was the governor. So you start to look at it, and it gets really it gets complicated and messy.
I have no illusion that we can fix these problems. Just like murder is already illegal, but we can’t stop murders from happening. I think policies can impact the crime rate and can lower the murder rate and can disincentivize things, and I think the same thing is true in our politics when it comes to corruption, that we can have policies and incentives that make it worse or make it better. And so that’s kind of what I’m advocating. So one of the things I would do would be outlaw hiring family, immediate family, to either work on your campaign or to work in your congressional office. They could do it for free if they want to. If you want to volunteer on a campaign, by all means do it. But that would avoid being able to kind of launder money to family members. By the way, it’s not the politician’s money. It’s taxpayer money or it’s campaign donor money. It’s not really yours to spread around.
DP: You talk a little bit about the Founders’ vision for public service and how there’s a difference between that and what we think of today. The idea at that time was not career politicians. The idea was, this is a thing you do for a while. And then once your time is done, either because the voters send you home or because you’ve just been there for too long, you go back to your farm and you retire. Nowadays, of course, we have these people who serve for a very long time, and in the process of doing that, become wealthy through politics, not through doing something else that would be more productive, let’s say. So what do you think it takes to get that idea of public service back? Because that’s really not something you can just sign a law and get people to think differently about. It’s really a culture problem to a certain extent, isn’t it?
ML: It really is. And I think that part of it is the whole career-politician thing. I mean, you’re right. People used to come to Washington and then go back to the farm. Now they’d rather buy the farm than go back to it. You know, we have people like Joe Biden is a classic example. I think of someone who’s been in the Senate, I think probably longer than I’ve been alive or very close to as long as I’ve been alive. And is not ready to give it up. And Dianne Feinstein is another example of someone who’s in a very similar category. They do not want to leave for a variety of reasons. In some cases, they may feel like we really need them. And to be honest, maybe we do in some cases. But I also think that there’s a feeling that this is all they have. It’s like an ego trip or something. They don’t want to give it up. And I do think that the longer you’re there and sort of the richer you get, you will become out-of-touch with the average American. And I think that a lot of Americans perceive that they are out-of-touch with their elected officials. And I think that is corrosive to liberal democracy.
I have just in the past few years become for the first time a supporter of term limits. And I used to be opposed to term limits for a whole bunch of reasons, including the notion that, well, we have term limits, they’re called elections, and if we get rid of the politicians, then we’ll have these bureaucrats and staffers who are sort of the permanent entrenched bureaucracy. I’ve come to change my mind on that and I think partly because I think that the system has been rigged to the extent that elections are really not holding politicians accountable. In so many cases they’re in gerrymandered districts. Their only competition is in a primary, and just look around at the gerontocracy we have.
DP: It creates these problems with accountability, it creates problems with transparency with the voters and things like that. And yet, you point out in the book, we keep voting for these people. And there’s a lot of times that campaigns will try to make an issue of it, and they’ll try to say, you know, so-and-so is making their family member wealthy or so-and-so did this stock trade that looks very suspicious. And voters most of the time they just kind of shrug at it. Why does it not seem to transfer, even in competitive races where it seems like this should be a bigger issue?
ML: I looked at a whole bunch of examples. John Hoeven, senator from North Dakota, was attacked for doubling his wealth in the time he’s been in the U.S. Senate the last decade. I think he went from like $20 million to $40 million or something. There’s Daniel Goldman, the heir to the Levi fortune, who was attacked in the primary for trying to buy the election. Even though we’re in this populist era, a lot of the populists are super rich, and being rich doesn’t seem — well, certainly the downsides of being rich from a PR standpoint do not outweigh the benefits of being rich in terms of what that may allow you to do, the freedom that may give you and the ability to tap those resources to get your message out. At the same time, there is plenty of data in this book that suggests that the filthy rich politician, the impression that politicians, that the rich get elected and the elected get rich, is actually eroding trust in our elected officials and our democracy.
And so my hypothesis is that at the micro level, when you’re talking about voting for someone for Congress, it doesn’t matter. You are going to vote based on something like ideology. Like, “Yeah, this guy’s rich, but the other person likes Trump.” Or, “Yeah, this guy’s rich, but the other person’s a leftist.” And so it doesn’t trump the other issues. So I think at the micro level or at the individual level, it doesn’t work to kind of demagogue the issue and talk about how rich or how out of touch someone is. That rarely works. Having said that, I think at the macro level, there’s a general sense that the game is rigged, that there are swamp creatures, that they’re using their perch to get rich. And I think that this is having almost like a low-grade corrosive effect on how people view elected officials in general.
