Romney’s Money

Paul H. Rubin —  30 March 2012

Mitt Romney made a lot of money at Bain Capital.  The press seems to view this as a negative; even the Wall Street Journal is piling on, and the Obama Campaign is paying attention. 

This is misguided.  The lesson to take away from Romney’s high earnings is that he is more dedicated than most politicians; he has actually given up a chance to earn vast sums in order to serve.  This is not an option for most politicians.  For example, Obama was a community organizer and his income from book sales was enhanced by his political career.  Gingrich was a professor and his income has also  been enhanced by his political career. Santorum was a lawyer but did not practice much before entering politics.  Other politicians (e.g., Cheney) have been wealthy, but their wealth came after their political careers.  So the Romney campaign should spin his earning power as a sign of his dedication, rather than trying to finesse it.

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Paul H. Rubin

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PAUL H. RUBIN is Samuel Candler Dobbs Professor of Economics at Emory University in Atlanta and formerly editor in chief of Managerial and Decision Economics. He blogs at Truth on the Market. He was President of the Southern Economic Association in 2013. He is a Fellow of the Public Choice Society and is associated with the Technology Policy Institute, the American Enterprise Institute, and the Independent Institute. Dr. Rubin has been a Senior Economist at President Reagan's Council of Economic Advisers, Chief Economist at the U.S. Consumer Product Safety Commission, Director of Advertising Economics at the Federal Trade Commission, and vice-president of Glassman-Oliver Economic Consultants, Inc., a litigation consulting firm in Washington. He has taught economics at the University of Georgia, City University of New York, VPI, and George Washington University Law School. Dr. Rubin has written or edited eleven books, and published over two hundred and fifty articles and chapters on economics, law, regulation, and evolution in journals including the American Economic Review, Journal of Political Economy, Quarterly Journal of Economics, Journal of Legal Studies, and the Journal of Law and Economics, and he frequently contributes to the Wall Street Journal and other leading newspapers. His work has been cited in the professional literature over 8000 times. Books include Managing Business Transactions, Free Press, 1990, Tort Reform by Contract, AEI, 1993, Privacy and the Commercial Use of Personal Information, Kluwer, 2001, (with Thomas Lenard), Darwinian Politics: The Evolutionary Origin of Freedom, Rutgers University Press, 2002, and Economics, Law and Individual Rights, Routledge, 2008 (edited, with Hugo Mialon). He has consulted widely on litigation related matters and has been an adviser to the Congressional Budget Office on tort reform. He has addressed numerous business, professional, policy, government and academic audiences. Dr. Rubin received his B.A. from the University of Cincinnati in 1963 and his Ph.D. from Purdue University in 1970.

One response to Romney’s Money

  1. 
    northfork investor 30 March 2012 at 7:32 am

    I think the conclusion of this blog is right on. Romney’s opportunity costs of pursuing a political career were higher than most and shows either dedication (or vanity–you pick). Following another path he would be a (multi-)billionaire.

    The premise however is incorrect that the press views earning a lot of money as a negative. Hell they don’t even mind when a presidential candidate inherits it (see “Kennedys”). What the press views as negative is the way leveraged buyout shops make their money and the way they earn and compound returns personally via tax policies favoring their business.