Why a president’s financial health is just as important as their politics
On Sept. 23, 1952, Richard Nixon was in a quandary.
Rumors abounded that he had misused $18,000 of campaign funds, and presidential candidate Dwight Eisenhower considered dropping him as his VP nominee. Nixon’s solution?
A bold move to address the nation on television.
In what became known as the “Checkers Speech,” Nixon sought to earn the trust of the American public by taking the unprecedented step of sharing his net worth: a $41,000 home in Washington, DC with a $20,000 mortgage, a $13,000 house in California with a $3,000 mortgage, no stocks and bonds, and a small life insurance policy.
“It isn’t very much,” he added, “But Pat and I have the satisfaction that every dime that we’ve got is honestly ours.”
It was enough to win back both Ike and the American public.
While Nixon’s speech may seem quaint today, it reinforces a timeless truth: The personal finances of our presidents should matter in how we assess them.
Today, Americans are far more cynical about political figures.
A recent Pew Research Center study found that 63% of Americans believe elected officials chose their careers to make money.
Furthermore, 80% feel that members of Congress poorly separate their personal financial interests from their work.
These poll numbers are unsurprising given the steady stream of politicians caught in financial scandals.
A candidate’s personal finances can provide insight into their values and are therefore a legitimate subject of inquiry when gauging their fitness for office.
Kamala Harris and Being a Good Girl Scout
Kamala Harris’ finances show the diligence of someone who takes the matter very seriously.
The evolution of her finances from her first senatorial campaign in 2016 to the vice presidency in 2020 to presidential candidate reflects someone whose financial details are not only well organized but also conflict free.
Her husband has given up his lucrative law job and partnership.
Harris’s investment portfolio is a fully diversified ETF (Exchange-Traded Fund) portfolio demonstrating that she is participating in the capital markets but not taking advantage of any data she might have access to due to her position.
She’s not the first presidential candidate to feel the need to be perfect. Calvin Coolidge was a successful attorney, yet for the majority of his life, he and his wife Grace rented a house because he wanted to be conflict free and not beholden to a bank.
Even in his later years, when approached by Charles Merrill to join the board of Merrill Lynch, he turned down the $100,000-a-year salary claiming he didn’t know enough about banking and finance to provide value.
Another indication of Harris’ financial sensibilities is the fact that she and her husband share a joint revocable trust.
This pools their assets, which makes it easier to manage them than if they were kept separate.
The slow, steady, conflict free approach taken by Harris has nevertheless allowed her to build wealth.
Yet this quiet diligence might be mistaken for a lack of financial savvy because so many Americans are more impressed by the financial flashiness – if not success – of candidates like Donald Trump.
Donald Trump’s Aspirational Lifestyle and Golden Opportunities
One big financial difference between Harris and her opponent is that Trump is the second generation of his family to have a significant level of wealth.
His job seems straightforward: maintain what he inherited from Generation 1 (his father) and get it down to Generation 3 (his children).
This is a lot easier said than done — when these families are studied, there is a reason for the saying “shirtsleeves to shirtsleeves in three generations.”
It’s no surprise that with his financial values and priorities, Trump passed the Tax Cuts and Jobs Act of 2017 (TCJA), which increased the amount we can pass free of estate tax from $5 million per person to $10 million per person plus inflation.
Trump is far savvier than Harris at delivering tax soundbites that appeal to wealthier voters as we are seeing with his recent comments about returning the SALT deduction to taxpayers.
Yet we are a nation wary of self-serving politicians, and Trump’s opacity regarding his personal finances doesn’t play well outside of his base.
His historic lack of transparency can be interpreted by his opponents that he may have something to hide.
Other wealthy presidents have accepted that transparency is part of the process.
When Fortune published an article in August 1932 called “The President’s Fortune,” Herbert Hoover was frustrated and embarrassed that his financial details were in the public space, but he also understood it was part of the process.
Reflection of Values
While national monetary policy is shaped by thousands of people in government, a president’s personal finances are something directly under their own control and are therefore a reflection of their values.
With the election looming, any voters who are still undecided should take a good, hard look at the candidates’ different financial profiles and decide which one would make the better steward of our country’s fiscal health.
Nixon said in his Checkers speech, “A man that’s to be President of the United States . . . must have the confidence of all the people.” And nothing builds confidence — even for presidents — like financial health.
Megan Gorman is a tax attorney, wealth manager and author of All the Presidents’ Money.