Stephanie Cutter, an adviser to the Obama re-election campaign, wrote a scathing memo the other day about Mitt Romney’s experience at Bain Capital, subtitled “Profit at Any Cost.”
Cutter sounded like a sworn enemy of private equity. Except a few years ago, she was a spokeswoman for J.C. Flowers, a private-equity firm. Why do work for J.C. Flowers when there are so many other worthy ventures needing communications help that don’t make insane amounts of money and pay incredibly well?
Presumably Cutter wanted to be as well-compensated as possible, by J.C. Flowers and the “several Fortune 500 companies” her communications firm served, according to her bio. This is utterly unremarkable but for the fact that she is part of an Obama team that argues there is something inherently wrong with income inequality. In his signature Osawatomie, Kan., speech, President Barack Obama asserted that rising inequality hampers those at the bottom. If that’s so, shouldn’t the people around him endeavor to keep from adding to the injustice by making too much money?
But none of them goes out and gets poor. Very few of them, it seems, even go out and get middle class. They get rich. Many of them climb right into the 1 percent. Obama economic adviser Alan Krueger gave a speech recently lamenting the shrinking middle class, without mentioning that the reason for its diminishment is that so many people have risen all the way out of the middle. By Krueger’s (perverse) standard, major Obama officials have heedlessly contributed to the destruction of the American middle class by earning too much.
Consider only the chief of staffs. President Obama’s new chief of staff, Jacob Lew, made $1.1 million in one year working for Citigroup. His prior chief of staff, William Daley, made $8.7 million in roughly one year working for JPMorgan Chase. His original chief of staff, Rahm Emanuel, made $16 million working for an investment firm. Judging by this record, President Obama only feels comfortable entrusting his affairs to men who have earned outrageous paydays.
The Obama 1-percenters abound. President Obama’s first national economic director, Larry Summers, earned $600,000 as president of Harvard, then went to a hedge fund where he made $5 million in one year, before joining the administration. His first budget director, Peter Orszag, left to make $2 million to $3 million a year at Citigroup. His current national-security adviser, Tom Donilon, got $7 million from his work at Fannie Mae from 2000 to 2003.
Certainly Obama’s top aides don’t have to make millions in finance, but they’d almost have to go out of their way not to get rich. In the aggregate, they are smart, highly educated and hard-working. They tend to marry people with the same characteristics. They have relatively stable families. They have success — indeed, the 1 percent — written all over them. They probably would be scandalized to work at a private-sector job paying “only” $50,000, the median household income in the U.S.
In a report that has the tone of a revelation about it, The New York Times discovered the 1 percent is a “varied group, one that includes podiatrists and actuaries, executives and entrepreneurs, the self-made and the silver spoon set.” By one estimate, the 1 percent starts at households making $380,000 a year. That means in 2005, Michelle Obama alone was almost making enough to hoist the Obama household into the dreaded 1 percent with her $316,962 job at the University of Chicago Hospital.
Is it too much to ask that one high-profile Obama official leave government and refuse to make more than $70,000 a year out of solidarity with the middle class and commitment to income equality? Of course it is. Just as the definition of a depression is when someone else loses a job, greed is when someone else makes a lot of money. For anyone hoping to get to the top, the collective message of current and former Obama officials should be clear: Do as they do, not as they say.
— Rich Lowry can be reached via e-mail: firstname.lastname@example.org.