6

MONEY!

CONSIDER THIS:

Only one president in our nation’s history—Andrew Jackson—ever paid off the national debt.

GREED! CORRUPTION! GRAFT!

It’s a problem.

On an almost consistent basis over time, those presidents who campaigned the longest and hardest to end corruption in government had the most corrupt administrations.

“Why would that be,” you ask?

Theories abound. One suggests that those who scream the loudest about corruption are probably the most corrupt. Others postulate that the presidents who went down in history for having corrupt administrations are those who devoted the most to rooting the corruption out.

INTRODUCING THE KING OF CORRUPTION

The three presidents who made the biggest stink about government corruption were probably Buchanan, Grant, and Truman. Ironically, they also had three of the most corrupt administrations in history.

To be fair, no one has ever pointed a finger at Harry Truman or Ulysses S. Grant and accused them personally of any wrongdoing. In both cases they were upright and honest guys who made the same mistake: they appointed their good buddies from back home to key positions in their administrations—but their buddies were neither qualified to hold those jobs, nor did they bring to their jobs the strong moral backbone needed to serve their country without serving themselves (quite liberally and profitably) first.

Buchanan, on the other hand, knew exactly what was going on. In fact, in one case Buchanan received a letter suggesting he give a lucrative navy contract to a particular company in Philadelphia that in return promised to help influence the congressional reelection of one of Buchanan’s close friends. Buchanan initialed the letter, sent it to the Navy Department, and the Philadelphia firm was awarded the contract.

Ten days later Buchanan’s friend won reelection.

Corrupt? No. Just stupid.

Chester A. Arthur once sold twenty-six

wagonloads of White House furniture for a

total of eight thousand dollars.

What he apparently didn’t know was that

some of the furniture was priceless.

BUCHANAN, ON THE OTHER HAND, WAS A SNAKE

“Next in importance to the maintenance of the Constitution and the Union is the duty of preserving the government free from the taint, or even the suspicion, of corruption.”

—from the inauguration speech of James Buchanan

Even before he was elected:

• Buchanan promised lucrative government contracts to friends in exchange for large campaign contributions.

• Supporters in some states arranged for aliens to be illegally naturalized and then transported to the polls. And after he was elected:

• Buchanan promised to award handsome contracts to a contributor who gave $16,000 to his campaign.

• A large navy contract was given to a company in Philadelphia that promised to influence the reelection of a close friend of Buchanan’s.

• Giant printing contracts were given to another close friend, who then subcontracted them at half the price to printers who made large contributions to the president’s election campaign. Printing contracts were also used to twist the arms of various members of Congress—if members voted with the president, the large contracts would be awarded to printers in their states or districts.

• The postmaster of New York embezzled $155,000 and fled the country.

• The secretary of war resigned after bilking the government of five million dollars.

• The personal banker of the secretary of war won the right to buy a military reservation in Minnesota.

• The House doorkeeper was found guilty of falsifying accounts and had to resign.

How bad could it get, you ask?

* * *

James Buchanan’s administration was so corrupt that given a chance to buy Cuba for only thirty million dollars, Congress voted to pass on the deal because there was a collective fear that Buchanan and his cronies would somehow abscond with the money.

Not Even Quicken Could Help

As Ulysses S. Grant’s presidency showed, he was not terribly good with money. But he was a war hero, and he did have a good name, and that was worth something. After he left the White House, he became a partner in the investment house of Grant & Ward—which subsequently failed and left him in debt. Although he had cancer at the time, he put pen to paper and wrote his memoirs to pay off his creditors.

While the book was a huge success and earned more than $450,000, Grant died four days after he finished writing it.

Bringing new meaning to the phrase “PayPal”

* * *

Harding’s administration was overrun with corruption as well, but at least he never got on a soapbox about it before taking office.

Like Truman and Grant, it was his friends who were on the take, not Harding himself. In fact, when he died, he was deeply in debt.

“IT’S THE ECONOMY, STUPID”

Let’s face it, dealing with money is half the job. Chances are that’s why Jimmy Carter didn’t get reelected.

And, short of getting lucky, there’s only one way to win the money game when you’re president: you’ve got to have great financial advisers.

The funny thing about Carter is that if he wanted good economic advice, he didn’t have to look any further than his own daughter. After all, while he was running for president in 1976, she set herself up with her own booming business right on the lawn of the Georgia governor’s mansion.

Had Jimmy used the same simple techniques to run the government that Amy used out on the lawn, the country might not have been saddled with skyrocketing inflation and prime interest rates in the range of 20 percent during his term in office.

But at least, we presume, Carter is doing better with his own finances—unlike Thomas Jefferson, James Monroe, Andrew Jackson, Ulysses S. Grant, and Warren Harding.

All five of these guys were so bad at managing their own money they died poor and (with the exception of Jefferson) in debt.

DID AMY CARTER LEARN ABOUT $$$ FROM LBJ?

Lyndon Johnson made his first foray into the world of business when he opened Johnson’s Shoe Shine Shop inside Cecil Maddox’s barbershop. For the first few weeks the business ran fine, in part thanks to Cecil’s existing customer base and the ads LBJ ran in the local paper. But then disaster struck: LBJ’s father shut the business down because he didn’t think it was any way for a nine-year-old to spend his time.

While her father was running for president, Amy Carter was outside with friends selling lemonade to tourists and members of the press. Initially, the price was a nickel, but Amy soon realized the market could bear a price increase.

So she raised the price to a dime. Yet business was still booming, so the three young entrepreneurs expanded and added new products to their line: three varieties of sandwiches and Frisbee rentals. The business was suddenly closed, however, when the Secret Service declared it a potential security risk.

FOR LOVE OR MONEY

While a young man, JFK appeared at a rally for candidates who were running for the Massachusetts legislature. He waited patiently as candidate after candidate went before the audience and spoke—and he noticed a similarity in the stories each of them told.

When his turn finally came to address the assembly he began: “I seem to be the only person here tonight who didn’t come up the hard way!”

While life for Kennedy was relatively easy in his younger years, the same was not true for all of our presidents. Some, in fact, had to do some pretty odd things to make ends meet before making it into the Oval Office.

PRESIDENT:	George Washington
JOB:	During his first year as president, he ran a ferry service back and forth across the Potomac.
PRESIDENT:	Thomas Jefferson
JOB:	Given a choice, he once said, he would have rather been a gardener than president. He imported plants from other countries to study them, and while conventional wisdom of the time said tomatoes were poisonous, he grew and ate them for dinner. He was also an inventor and was responsible for the development of the dumbwaiter, the lazy Susan, an automatic closing door the design of which is still—fundamentally—in use on buses today, the revolving chair, the folding chair, and a machine that enabled him to make a duplicate copy of a letter as he wrote it. He was also an inventive chef and created both Baked Alaska and Chicken à la King (which George Washington loved!).
PRESIDENT:	John Quincy Adams
JOB:	Okay, he didn’t exactly come up the hard way, either, but at age fourteen he was made private secretary to the American envoy to Russia, and at fifteen he was secretary to the American emissaries negotiating peace with England. In addition, he is the only president to be a published poet.
PRESIDENT:	Zachary Taylor
JOB:	He was a career military man. Before being elected president he spent most of his adult life fighting Indians and the Mexican army during the Mexican-American War. Funny thing was, he was a very short war hero, so he needed someone to give him a boost every time he got up on his horse.
PRESIDENT:	James Buchanan
JOB:	He was once a prizefighter.
PRESIDENT:	Grover Cleveland
JOB:	In the span of just three and a half years he was the mayor of Buffalo, New York, the governor of the state of New York, and the president of the United States. Before becoming mayor of Buffalo, he was the sheriff of Erie County, New York, and was called upon twice to spring the trap at a hanging—thus making him the only president in history with the job of hangman on his résumé.
PRESIDENT:	William McKinley
JOB:	He drove a coffee wagon out to soldiers on the battlefield during the Civil War. His commanding officer was Rutherford B. Hayes.
PRESIDENT:	Teddy Roosevelt
JOB:	He spent several years working as a cowboy in the Dakota Badlands—and after he rounded up a gang of rustlers, he wore the badge of a deputy sheriff.
PRESIDENT:	Warren G. Harding
JOB:	He was a newspaper man … and a poker player. In fact, he won controlling interest in the Marion Daily Star, his local newspaper, in a card game.
As Harding used to say at his weekly poker game: “Forget that I’m president of the United States. I’m Warren Harding, playing poker with friends, and I’m going to beat hell out of them.” (And when he was short of cash, he would ante up by putting pieces of White House china into the pot.)
PRESIDENT:	Herbert Hoover
JOB:	Hoover was an orphan, and his first job was picking bugs off potato plants—for which he was paid a dollar per hundred (bugs, that is, not plants). His first job out of college was as a mine worker—for seventy hours a week he pushed an ore cart in a California gold mine. Using what he learned while getting a degree in mining engineering from Stanford, he went on to become a millionaire.
	But everything Hoover touched didn’t turn to gold. In fact, he aspired to be a political writer and wrote many books containing his views and commentary on the state of the world … that no one wanted to read. On the other hand, he did write two books that did rather well. The first, which he wrote twenty-one years before he became president, was called Principles of Mining. In fact, it became the definitive text for mining engineering students until it went out of print almost sixty years later. His second success as an author? It was Fishing for Fun and to Wash Your Soul, which he wrote thirty-three years after leaving the White House.
PRESIDENT:	Harry Truman
JOB:	After World War I, he opened a haberdashery in Kansas City with a friend. Three years later they were broke.
PRESIDENT:	LBJ
JOB:	He worked on a road gang after high school. Later, he put himself through college by working as the college janitor and picking up trash on campus.
PRESIDENT:	Richard Nixon
JOB:	He spent his summers working as a carnival barker for the Wheel of Chance at the Slippery Gulch Rodeo. Later, he owned the only hamburger stand in the South Pacific, Nixon’s Snack Shack, during World War II.
“I have often thought that if there had been a good rap group around in those days, I would have chosen a career in music instead of politics.” —RICHARD NIXON
PRESIDENT:	Jimmy Carter
JOB:	Flew blimps for the navy.
PRESIDENT:	Gerald Ford
JOB:	As a college senior he was recruited to play for the Detroit Lions and the Green Bay Packers—but he decided to go to law school instead. While at Yale Law School, he worked as an assistant football coach, a boxing instructor, and a magazine model. He also worked as a forest ranger at Yellowstone National Park. His chief duties: directing traffic and feeding the bears.
PRESIDENT:	Ronald Reagan
JOB:	According to Reagan, he saved the lives of seventy-seven people as a boy when he worked as lifeguard at the river near his family home in Dixon, Illinois.
PRESIDENT:	George H. W. Bush
JOB:	His first job after he left the navy was in the Texas oilfields. His responsibilities included painting machinery and sweeping floors.
PRESIDENT:	Bill Clinton
JOB:	Clinton’s first boss was his grandfather, who owned Cassidy’s General Store in Hope, Arkansas. Bill’s job was to greet customers with a smile and a hearty handshake as they came through the door of the store.
PRESIDENT:	George W. Bush
JOB:	In between his years as an undergraduate at Yale and getting his MBA at Harvard, he worked as a social worker tutoring underprivileged children.
PRESIDENT:	Barack Obama
JOB:	Everyone knows he was a community organizer before he became President. But long before he was a community organizer, he had a job scooping ice cream for Baskin-Robbins.

Baskin-Robbins takes a full scoop’s worth of credit for putting their past employee on the path to the presidency:

“Scooping for America’s favorite neighborhood ice cream shop can result in obtaining basic lifelong job skills, like handling consumer care in real time and keeping calm under pressure … The crew member who communicates effectively is both a diplomat and a terrific brand ambassador, serving guests of all flavor preferences.”

—SUE THIRLWALL, FROM BASKIN-ROBBINS

Presidents who were never lawyers or never studied the law:

• George Washington

• William Henry Harrison

• Zachary Taylor

• Andrew Johnson

• Ulysses S. Grant

• Warren G. Harding

• Herbert Hoover

• Harry Truman

• Dwight Eisenhower

• JFK

• Jimmy Carter

• Ronald Reagan

• George H. W. Bush

• George W. Bush (he tried, but he was rejected by the University of Texas Law School)

DOES CRIME PAY?

After Gerald Ford granted Richard Nixon a full pardon for any crimes he may have committed in relationship to Watergate, he then lobbied Congress to pay Nixon $850,000 to cover his expenses while making the transition from the presidency to civilian life.

The sum of $850,000 was considered to be a compromise deal since The Presidential Transition Act of 1963 provides ex-presidents who complete their full term in office with one million dollars to cover their expenses during this six-month transition period.

In a compromise deal of its own, Congress agreed to pay Nixon two hundred thousand dollars for his transition expenses.

A FEW GOOD MEN …

• George Washington refused to accept his salary as president.

• Herbert Hoover and JFK both took the money and donated it to charity.

• Barack Obama returned five percent of his salary to the US Treasury when other federal employees faced pay cuts or furloughs during the budget sequestration in 2013.

• When Eddie Cantor and the Lone Ranger asked the children of America to each send a dime to the president to help the March of Dimes—of which FDR was the founder and chairman—so many dimes were sent to the White House (sometimes as many as 150,000 a day) that fifty extra postal workers had to be hired to handle the increased volume. In total, more than three million dimes were received.

… One Stinker …

In 1991 Spy magazine reported that it cost the Secret Service three million dollars a year to protect the life of former President Gerald Ford and that the government was also spending $420,000 a year to maintain his office.

Meanwhile, Ford was leveraging his role as chief executive for every dollar he could get.

Consider this: when Ford turned the White House over to Jimmy Carter in 1977, his net worth was about $250,000. Just a few years later, after allowing a variety of companies ranging from American Express to Commercial Credit to Spectradyne (the company that pumps pay-per-view movies, including porn, into many hotels) buy him for as much as $140,000 a year each, he was a millionaire.

Okay, “buy him” is a bit harsh. Let’s say they paid him to be a consultant or a member of the board of directors. He got the dough (as much as $1.7 million a year in the late 1980s)—they got the prestige. So, to the degree that Ford was still cutting these kinds of deals, he supported himself the same way Michael Jordan did.

Not a bad deal for a guy who was appointed vice president when Spiro Agnew resigned, who succeeded to the presidency when Richard Nixon resigned, and who then lost to Jimmy Carter when he ran for reelection. (In other words, unless you’re from his home state of Michigan, this is one president you never had a chance to elect.)

But here’s the rub: in 1993 Congress voted to stop funding the offices of former presidents starting in 1998, although they’d still receive an annual pension equal to that of a cabinet secretary (currently $199,700/year) and Secret Service protection for life.

Ford, however, who made a fortune by lending his name and presidential status to a myriad of corporate sponsors that could afford to pay for it, lobbied Congress hard to push that cutoff date further into the future so he could stay on the US government gravy train as long as humanly possible.

… And One Guy Who Wasn’t Too Bright

James Monroe entered politics at the age of twenty-four and worked in public service for the rest of his life. He was a member of the Virginia Assembly and the Continental Congress, a senator, a minister to France, the governor of Virginia, secretary of state, and president for two terms. He was a man truly devoted to his country.

Only one problem: for many of the forty-nine years he spent as a public servant, he spent more than he earned. Therefore, when he retired in 1825 after his second term as president, he was broke. So he did the only logical thing: he turned to the government for a handout.

His rationale was that if he served his country for close to fifty years and had less money than he started with, then much of the money he spent on the expenses of being a public servant must have been his own. Therefore, didn’t it seem reasonable that he should be reimbursed?

It took them seven years to do it, but Congress finally reimbursed Monroe thirty thousand dollars—just a fraction of what Monroe claimed to have spent. Not that it mattered. By the time Congress made the decision, Monroe had sold off all his land to pay his debts and had gone to live with his daughter and son-in-law. He died shortly afterward.

ANOTHER CASE OF INCOME INEQUALITY?

You may recall that at the beginning of this book we made the assertion that the president’s job, ultimately, is to entertain the rest of us. But as the CEO of a top entertainment company, the president is woefully underpaid when compared to other powerful CEOs in the entertainment industry:

David M. Zaslav:	Chief executive of Discovery Channel and other associated brands: Total compensation in 2015: $156 million
Les Moonves:	Chief executive of CBS Total compensation in 2015: $54 million
Philippe P. Dauman:	Chief executive of Viacom Total compensation in 2015: $44 million
Robert Iger:	Chief executive of Walt Disney Total compensation in 2015: 43.7 million
Joshua W. Sapan:	Chief executive of AMC Networks Total compensation in 2015: $40.3 million
Jeffrey L. Bewkes:	Chief executive of Time Warner Total compensation in 2015: $32.6 million
Barack Obama:	Chief executive of the United States Total compensation in 2015: * Salary of $400,000 * A bunch of other perks with cash value of about $1 million or so

Here Are the Perks of Being President:

• You don’t ever have to make your own bed.

• You don’t ever have to cook your own breakfast (although that was something Gerald Ford liked to do anyway).

• You don’t ever have to do your own laundry or take your own clothes to the dry cleaner (but you do have to pay for the dry cleaning yourself; you will be billed for it at the beginning of each month).

But Wait! There’s More!!

The following free perks also come with the job:

• Ballpoint pens

• Personalized stationary

• High-speed Internet access

• Toothbrush cups emblazoned with the presidential seal

• Nightly turn-down service

• Breath mints

And Even More!

There’s more!!

In addition to your $400,000/year salary, you also get:

• A no-questions-asked $50,000 expense account—in other words, you’re not required to provide receipts to get reimbursed. But if you don’t spend it all, you have to give what’s left back to the Treasury Department every year.

• To live rent-free in a nice big house that includes a bowling alley, putting green, jogging track, billiard room, tennis courts, swimming pool, and movie theater (with various contacts in Hollywood providing all first-run movies for free).

• Five full-time chefs who are standing by to prepare the food you paid for (see above). A nice, secluded, 180-acre vacation home in Maryland called Camp David that includes numerous cabins for the president and guests, a heated pool, tennis, horseshoes, bowling, a three-hole golf course, an archery range, and a trout stream.

• The presidential version of “public” transportation: limos, helicopters, and your own personal jets.

• Up to one million dollars you can spend every year for “unanticipated needs,” in case you ever go over budget somewhere else.

But Don’t Even Think of Soaking Taxpayers for This:

You have to pay for your own:

• Food (although you may be able to defray some of these costs with various expense accounts)

• Clothes

• Haircuts and manicures

• Toothpaste, hairspray, razor blades

BETTER ODDS THAN BUYING A LOTTERY TICKET

In 2014, USA Today teamed up with the blog 247wallst.com to offer this report on the ten richest US Presidents, with numbers below adjusted to reflect 2010 dollars:

10. John Fitzgerald Kennedy (35th president)

• Net worth: Estimated at $1 billion if he had inherited his father’s fortune, but he didn’t. Pinning down a figure for JFK’s net worth without his father’s money is a lot harder, but take our word for it: he was rich.

• In office: 1961 to 1963

Kennedy was born into wealth and married into it. His father was one of the wealthiest men in America and the first chairman of the Securities and Exchange Commission. His wife, too, was an oil heiress. Almost all of JFK’s income and property came from a trust shared with other family members.

9. William Jefferson Clinton (42nd president)

• Net Worth: $55 million

• In office: 1993–2001

Unlike some other presidents, Clinton did not inherit any wealth and gained little net worth during 20 plus years of public service. After his time in the White House, however, he earned a substantial income as an author and public speaker. In 2005, Clinton earned a $15 million advance on his book My Life. Former Secretary Clinton’s advance for her autobiography Living History was about half that. In 2011, the former president was paid $750,000 alone to speak in Hong Kong for Ericsson. By 2012, he was estimated to have earned over $100 million. Secretary Clinton has started contributing to the family fortune since leaving office. It is reported that she has earned more than $200,000 per speech.

8. Franklin Delano Roosevelt (32nd president)

• Net worth: $60 million

• In office: 1933 to 1945

Roosevelt’s wealth came through inheritance and marriage. He owned the 800-acre Springwood estate, as well as properties in Georgia, Maine, and New York. In 1919, his mother had to bail him out of financial difficulty. He spent most of his adult life in public service. Before he was president, Roosevelt was appointed assistant secretary of the Navy by President Wilson.

7. Herbert Clark Hoover (31st president)

• Net worth: $75 million

• In office: 1929 to 1933

An orphan, Hoover was raised by his uncle, a doctor. Hoover made a fortune as a mining company executive. He had a generous salary for 17 years and had extensive holdings in mining companies. Hoover donated his presidential salary to charity. He also owned “Hoover House” in Monterey, California.

6. Lyndon Baines Johnson (36th president)

• Net worth: $98 million

• In office: 1963 to 1969

Johnson’s father lost all the family’s money when LBJ was a boy. Over time, the 36th president had accumulated 1,500 acres in Blanco County, Texas, which included his home, called the Texas White House. He and his wife owned a radio and television station in Austin, and they had a variety of other moderate holdings, including livestock and private aircraft.

5. James Madison (4th president)

• Net worth: $101 million

• In office: 1809 to 1817

Madison was the largest landowner in Orange County, Virginia. His land holding consisted of 5,000 acres and the Montpelier estate. He made significant wealth as secretary of state and president. Madison lost money at the end of his life due to the steady financial collapse of his plantation.

4. Andrew Jackson (7th president)

• Net worth: $119 million

• In office: 1829 to 1837

While he was considered to be in touch with the average middle-class American, Jackson quietly became one of the wealthiest presidents of the 1800s. “Old Hickory” married into wealth and made money in the military. His homestead, The Hermitage, included 1,050 acres of prime real estate. Over the course of his life, he owned as many as three hundred slaves. Jackson entered considerable debt later in life.

3. Theodore Roosevelt (26th president)

• Net worth: $125 million

• In office: 1901 to 1909

Born to a prominent and wealthy family, Roosevelt received a sizable trust fund. He lost most of his money on a ranching venture in the Dakotas and had to work as an author to pay the bills. Roosevelt spent most of his adult years in public service. His 235-acre estate, Sagamore Hill, now sits on some of the most valuable real estate in Long Island.

2. Thomas Jefferson (3rd president)

• Net worth: $212 million

• In office: 1801 to 1809

Jefferson was left three thousand acres and several dozen slaves by his father. Monticello, Jefferson’s home on a five-thousand-acre plantation in Virginia, was one of the architectural wonders of its time. He made considerable money in various political positions before becoming president, but he was mired in debt towards the end of his life.

But what about Barack Obama?

* * *

According to the same report from USA Today and 247wallst.com:

“President Obama is not one of the richest presidents. The president receives a salary of $400,000 a year as president, which, while generous, isn’t even close to today’s top executives’ salaries. The President’s annual income has actually dropped steadily since he entered office. In 2009, the President’s adjusted gross income was $5.5 million. That figure fell to less than $1 million in 2012. This is primarily due to a drop-off in revenue from his prior book deals. 24/7 Wall St. estimates the President’s net worth to be $7.5 million.”

1. George Washington (1st president)

• Net worth: $525 million

• In office: 1789 to 1797

Washington’s Virginia plantation, Mount Vernon, consisted of five separate farms on eight thousand acres of prime farmland run by more than three hundred slaves. His wife, Martha, inherited significant property from her father. As president, Washington earned well more than subsequent presidents: his salary was two percent of the total US budget in 1789.

Barack Obama: the millionaire next door … but not his wife

* * *

While an Illinois senator, Barack Obama rented a modest Washington, D.C., apartment at 227 6th Street NE with an old bathroom, a tiny kitchen, and just a half-sized stove. The apartment was good enough for the future president and was used by various staffers after Obama was elected; but Michelle Obama has reportedly said in an interview that it was not up to her standards and she never would have stayed there.

His Just Reward

Isn’t it an amazing coincidence that

FDR was the chairman of the

March of Dimes and also happens

to be pictured on the dime?

No coincidence at all, as it turns out.

In fact, after FDR died in 1945,

Congress voted to commemorate

the work he did on behalf of the

March of Dimes by putting his

profile on the coin.