Hillary Clinton’s money problem
Hillary Clinton is shown. | AP Photo
It’s unclear whether a wealthy Democratic 2016 aspirant can succeed in a populist era. | AP Photo
By BEN WHITE | 6/29/14 6:59 PM EDT
Hillary Clinton is having a very hard time being rich.
After two weeks of verbal gaffes and unflattering headlines, Democratic operatives, political historians and counselors to the nation’s wealthy agree that Clinton’s current strategy — acting like she’s not incredibly rich and made her money the old-fashioned way — is not working and needs to change. Fast.
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“Her responses so far have come off as somewhat disingenuous, probably because she has a lot of ambivalence about her own wealth,” said Jamie Traeger-Muney, a psychologist whose Wealth Legacy Group focuses on counseling the affluent, an especially busy business in the current era of hostility to the 1 percent. “It feels like there is a lot of shame in there, and that is very common for wealth holders, especially in today’s climate.”
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It’s unclear whether a super-wealthy Democratic presidential aspirant can succeed in a populist era defined by a tepid economy, flat wages and the Occupy Wall Street movement. Some Democrats argue these early dust-ups won’t matter unless Clinton gets a primary challenge from the left. But the current criticism over her wealth could influence her decision to run — and if she runs and gets the nomination, Republicans could paint her as out of touch with average Americans, much as Democrats did to Mitt Romney in 2012. There’s also a chance Republicans will wind up nominating a populist, Wall Street-basher of their own, such as Kentucky Sen. Rand Paul.
What is clear now is that the status quo for Clinton and the conundrum of what to do about it are quickly giving new meaning to the phrase “Hard Choices.”
Traeger-Muney said Clinton needs to figure out a way to “own” her own wealth and success and not sound defensive about it while continuing her current strategy of pointing to all the work she’s done for the middle class and poor over her long career in public service.
“It would be great for her to explore her own ambivalence around wealth and what it means to have her policy views and be a wealth holder,” Traeger-Muney said. “The moment she’s at peace with that for herself, the need for coaching would diminish.”
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Many Democrats are offering a version of the same advice. Sen. Claire McCaskill (D-Mo.) last week told MSNBC that Clinton “needs to be comfortable that they’ve made a lot of money,” adding that it’s “very American, making a lot of money. Many of our modern-day presidents have made a lot of money, so I don’t think she needs to be defensive about that.”
The defensiveness began with Clinton’s comment that she and her husband were “dead broke” upon leaving the White House. Then she suggested she was not among the “truly well off” and banked all her huge speaking fees by “dint of hard work.” She also said she pays “ordinary income tax,” unlike those real fat cats on Wall Street.
If Clinton can’t figure out how to get beyond this and wear her riches more comfortably, the next bit of advice from Democrats is pretty simple: Stop talking about it.
“The appropriate solution is to never discuss it again,” said Hank Sheinkopf, a veteran Democratic operative. “Whatever she says is going to wind up in negative ads run by independent committees lined up against her and will probably include a backdrop of a lot of poor people.”
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Republicans are already having a field day with Clinton’s comments, calling her the Democrats’ version of Romney. Republican National Committee Chairman Reince Priebus said on NBC’s “Meet the Press” Sunday that all the stories about Clinton’s wealth are giving Americans “Hillary fatigue.”
Even Clinton’s possible 2016 rival, Vice President Joe Biden, jumped in last week, noting that he was the “poorest man in Congress” and did not even have a savings account or own any stocks and bonds. (According to disclosure reports, Biden does in fact have both a savings account and mutual funds.)
Sheinkopf, echoing a number of other Democrats who did not want to go on record discussing the party’s possible presidential nominee, said there’s little Clinton can do to eliminate negative press around the hundreds of thousands of dollars she earns speaking to bankers and other industry groups or the way she talks about it.
“By talking about money you automatically raise the hackles of people who are never, ever going to be able to make that kind of money,” he said.
One other possible solution? A strengthening economy that finally raises wages enough to ease the current deeply negative views Americans hold about their own prospects and the direction of the national economy. “Should the economy improve significantly between now and 2016, it will be a lot easier,” Sheinkopf said. “The attacks will have a lot less value.”
The problem with that hope is the economy actually contracted by nearly 3 percent in the first quarter. And while the rest of the year promises to be significantly better, there is very little chance that a fresh economic boom will arrive in the next two years to blow out the current mood that President Barack Obama himself recently diagnosed as “sour.”
And even a new boom might not be enough to erase Clinton’s problem.
Some observers say Clinton’s real trouble is not the amount of money she and her husband have racked up — The Washington Post reported that Bill Clinton has made $104.9 million in speaking fees since leaving office — but how they made it, mostly through massive checks for talking to special interest groups. Stopping the speeches now might help Clinton, observers say, but that won’t change the money that’s already in the bank.
“How have they made all this money? Speaking fees? Book advances? These are not the ways that Americans are comfortable with Americans making a lot of money,” said Louis Hyman, a historian of capitalism at Cornell. “There is no way her wealth can reflect on her doing better for other people. It’s not like she became rich through the creation of a business that employs a lot of people.”
This is where Clinton gets in trouble for comments like the one she made to The Guardian in which she said her money came through “dint of hard work.” Americans generally do not view getting hundreds of thousands of dollars to speak to Goldman Sachs executives and other well-to-do audiences as “hard work.”
“With Hillary Clinton, you get the feeling that it’s just knowing the right people,” Hyman said. “And in the aftermath of the financial crisis, people are just much more suspicious of wealth and how it’s acquired than they were before.”
Romney faced this problem in 2012, especially in Ohio and other swing states where Democrats successfully hammered him for sometimes breaking up companies as a private equity executive. The GOP nominee was never able to recover from the infamous “47 percent” video or criticism that he was a vulture capitalist rather than a job creator.
Clinton’s supporters say her money issues are nowhere near those of Romney, who was widely seen as promoting economic policies to further aid wealthy people like himself. And they argue that while some of the comments have been problematic, they are often plucked out of context and amplified by a gaffe-obsessed media.
They note that in the full transcript of the Guardian interview, Clinton talks about “how blessed” she and her husband are. “We were neither of us raised with these kinds of opportunities, and we worked really hard for them,” Clinton said, according to the transcript. And some argue that Clinton was including herself in the “truly well off” category while noting that others who are equally well-off pay the lower capital gains tax rate on investment income.
Even on this front, Clinton has a problem. Because it was her husband, along with congressional Republicans, who lowered the capital gains rate to 20 percent from 28 percent in 1997.
Clinton herself has acknowledged that some of her comments on her wealth have been not been helpful. “Well, I shouldn’t have said the five or so words that I said, but my inartful use of those few words doesn’t change who I am, what I’ve stood for my entire life, what I stand for today,” Clinton told PBS’ Gwen Ifill last week.
But the controversies show no signs of stopping. Last week, students from the University of Nevada Las Vegas demanded that Clinton return some or all of a $225,000 fee for speaking at a university event. And The Wall Street Journal reported that Clinton received $300,000 for a speech earlier this year at UCLA. The high fees for speaking at schools are particularly troubling for Clinton at a time when the issue of high tuition and big student debt loads are prominent in the national policy conversation, especially on the left.
Sen. Elizabeth Warren (D-Mass.), often invoked as the model of a potential populist challenger to Clinton, has made student debt one of her signature issues. Warren spent a good bit of her own recent book, “A Fighting Chance,” recounting her humble roots in Oklahoma, where her father was a maintenance worker and her mother operated phones at Sears.
Warren has said repeatedly that she is “not running” for president. But some on the left openly pine for her or someone like her to take on Clinton.
Even if no Democratic challenger emerges, many in the party say figuring out how to deal with the wealth issue is an urgent project for Clinton.
“Unlike those with inherited wealth like the Rockefellers and Roosevelts, the Clintons don’t have long experience with this sort of thing,” said Democratic consultant Paul Equale. “Their rhetorical approach is guided by middle-class values which require them to almost deny their wealth, and when that doesn’t work, to discuss it in overarching terms that can sound disingenuous to some who are not quite as lucky.”
Equale’s advice is to drop the “flat broke” line and start this way: “Yes, we are very comfortable, but it wasn’t always that way …’”
And Traeger-Muney said Clinton should immediately lose the line about taxes: “Even if she pays ordinary tax rates, she is very far from ordinary.”
Ben White (@morningmoneyben)
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Hillary Clinton, 2016 Elections, Democrats, Gaffes, Hard Choices, Elections
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