It was recently reported that Barack Obama is getting paid $400,000 to give a speech to a Wall Street bank. Obama’s a great speaker, but a lot of people seem to think nobody’s $400,000 great, and so the transaction smacks of corruption. The thinking is that the bank must be getting more than just a speech for their money.
Now, I don’t know if it’s true that the speech alone isn’t worth that much to the bank. There’s a lot of money flying around in banking, and the stakes are high. Maybe if people come to your dinner rather than your competitor’s dinner, you might get a big deal that makes the money back. Or maybe hosting dinners with Obama attracts employees that could otherwise only be attracted with those enormous banker’s bonuses that we love reading about.
But let’s suppose that the speech isn’t worth that much to the bank, and they’re getting something else. Or maybe it is worth it to them but they're still getting something else, because that's how the after dinner speech market works. One possibility is that Obama made a shady deal where he did the bank some kind of regulatory favour while he was in office, on the understanding that they would pay him $400,000, which they are now laundering as a speaking fee. I think that's unlikely, but it’s beyond the scope of this blogpost to persuade you to agree with me that it's unlikely.
What I think is much more likely is that there’s a general understanding that Wall Street banks, and other big businesses, are willing to pay massive speaking fees to politicians after they leave office, and that they offer the gigs to politicians who are friendly to Wall Street and so on while they’re in office, and that on some level this influences the way politicians govern. This kind of thing is insidious and I can see it affecting basically everyone to some extent, without anyone doing anything they could be prosecuted for. That’s not ideal.
What can we do about this? One thing we could do is demand that politicians declare future conflicts of interest. If you’re taking a gig in the medium-to-near future that would constitute a conflict of interest if you had it now, then you need to declare it as if you had it now. I don’t see that it makes sense to have laws or strong norms about present conflicts of interest while relying on the honour system for future conflicts of interest. But let’s assume that’s not going to happen. What can individuals do?
Some people think Obama shouldn’t take this kind of gig. He should set an example, he needs to go high where other people go low, and so on. Even if his governing wasn’t influenced by the prospect of lucrative speaking gigs, he needs to extinguish any suspicion that it was.
Some other people think Obama should take the money. Everyone takes the money, and it’s unfair to demand he make all the sacrifices, especially when the new president brazenly doesn’t care about all his own conflicts of interest and spends government money at his own businesses all the time.
Here’s what I think. It’s too late for Obama. Whatever influence the speaking fees had on his presidency, they’ve had it already. We know he wasn’t planning to eschew the speaking fees, and changing his mind now won’t change whatever decisions he took during his presidency. If he was running for future office, things would be different. But he probably isn’t, and so it’s too late. Obama showed a lot of things were possible, but he can’t show that saving politics from the after dinner circuit is possible. And if he had been planning to do this, regulating Wall Street on the merits and to hell with the speaking fees, then he should have said something about it sooner. Like, when he was in office, or even before that.
It’s not too late for everyone. If you’re in office now, or you’re running for office in the future, and you don’t want politicians to be influenced by the prospect of future speaking fees, pledge not to take them. Or if you aren’t willing to go that far, then at least pledge not to take the really big fees. It’s simple, it’s easy for people to understand, and it doesn’t rely on backwards causation.