Friday, August 29, 2014

Only a rich person could go as broke as Hillary Clinton

In an interview with ABC News' Diane Sawyer, Hillary Clinton addressed a question about the vast sums of money she and her husband have earned from speaking fees and book advances by claiming that when they left the White House they were "not only dead broke but in debt."

ABC US News | ABC Celebrity News

This has been greeted with incredulity in some quarters, but it's absolutely correct. Philip Bump quite persuasively shows using Open Secrets financial disclosure data, that in 2000 the Clinton's had a net worth of approximately negative $10 million.

But here's the thing. You need to be really rich to go that deeply into debt. Nobody would lend a normal person $10 million or anything remotely in that vicinity.

A similar problem arises when you try to compile a list of the poorest members of congress. Instead of having the lifestyles of actual poor people — or even actual middle class people — the members of congress with the lowest net worths are guys like David Valadao with negative $4.10 million to his name (a result of his families' business interests in dairy farming) or Alcee Hastings who's $2.23 million in debt (related to legal fees).

The story with the Clintons is that they left office millions of dollars in hock to various law firms. But this wasn't some random financial misfortune that could have happened to anyone. If you found yourself in legal hot water, you wouldn't possibly be able to hire the Clinton's lawyers. No firm would let you run a multi-million dollar tab. The reason the Clintons were able to get away with it is that it was always obvious that Bill had enormous post-presidential earnings potential. This is a situation where the Clintons' ability to go so deeply into debt is a sign of the vast economic privileges they enjoyed. Not just the ability to become millionaires after leaving office, but the ability to access certain aspects of the millionaire lifestyle even before leaving office.

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