So the news is out. Mitt Romney's rich.
He made more than $20 million in each of the past two years. His effective tax rate was less than 15%. During this time, he made so much that he was able to give over $7 million to his church. He's one of the wealthiest men ever to run for President, with an estimated net worth between $190 and $250 million.
I run a small business. I speak all day to other small business owners. Are we jealous? Hell, yeah! Why? Because we all want to be like Mitt Romney. Isn't that the point?
Is there not a small business owner, an employee at a pharmaceutical company, a guy driving a bus, a steelworker, a school teacher...who also wouldn't like to be like Mitt Romney (without the name "Mitt", of course)? Don't we all want to be rich? Isn't that what we love most about this country - the chance, the potential that one of us could make it big? Like Al Pacino in Scarface. But without all the guns and cocaine. Rich is good. Poor is bad.
Are there downsides to a rich guy as President? Of course. You might get that guy who uses his office for his own personal greed (because some rich guys feel like they never have enough). You might get a guy who's so corporate friendly that he doesn't adequately support those government agencies (the FDA, SEC, DOJ) that work hard in the public interest and keep the bad corporations in check. You could get a guy that's too insensitive to the plight of the many who need government assistance to get on their feet. Or someone who owns a lot of real estate and has a really, really bad hair-do.
In the end I don't care if my President is poor or rich. I just want him to be smart. Communicate well. And have management and political experience. Romney seems to have these characteristics. Oh, and he's rich. Does a rich guy make a bad President? No. In my opinion, it makes him better. Better for my business. Better for the economy.
Like most rich guys, I doubt Romney cares about the money at this point. He's in it for other reasons. Maybe it's ego. Maybe it's a desire to do something good. He's knows that he's always going to be rich, no matter what decisions he makes. And if Romney is one of the richest men ever to run for President then it's likely he doesn't desire more. So he can make decisions that benefit the country, not his own stock portfolio (which he has no knowledge of because it's all in a blind trust anyway).
Maybe that means he can make decisions for the better good without regard as to whether he'll be re-elected. He knows he can always just retire someday and live a comfortable, rich life. I wish I could say the same thing about my small business. Oftentimes many of us make decisions that are more profit motivated instead of for the right reason ("Just ship it already, I'm sure it's fine!"). If we were all richer maybe our decision making would be better.
A rich guy can't be accused of invading a Middle Eastern country to benefit his portfolio of oil stocks. Or giving accommodations to those "fat cats" who might help him out. Why? Because he's already one of them. And he's proud of it. And if he is going to help out those "fat cats" it's probably because he knows it's better for the economy as a whole. Tax breaks for investment bankers? Trade accommodations for the auto industry? Like it or not, rich people know about creating (and keeping) wealth. And in an era of $15 trillion national debt and a $1.3 trillion deficit we could use a few guys who know how to create (and keep) wealth.
That's because a rich guy appreciates what other rich guys do. They invest. They buy companies. They employ people. You know what it's like when you go out to dinner with that "rich" friend of yours and he calculates a 15% tip to the penny. You say to yourself, "well, I guess that's how he got so rich." Exactly! Rich people understand the value of money. They realize that whether it's a 15% tip on a $150 dinner bill or a $1.3 trillion deficit money is still money. It's to be treated with respect, not just printed when more is needed. Small business owners know this as well.
Rich people understand financing. They study leverage. At Bain Capital, Romney raised and invested millions in startups and early stage companies. He did so based on detailed projections and with a specific return on investment in mind. Trust me, he didn't just throw a bunch of money at an entrepreneur, hoping it will "stimulate" him into hiring people and growing. Guys who made it rich know all about risks and rewards. Which is why sometimes their investments tank - that's also part of the game. Small business owners understand that too.
But unfortunately most small business owners who struggle, especially startup entrepreneurs, are all about making the buck, especially until they get established. Lifelong bureaucrats are all about the government providing as much as possible. But rich guys, like successful small business owners, know the balance between earning profits and doing what's right by society. That's why you read about so many business owners who make their companies part of their communities. They fund local events and sponsor local charities. They give money away and they look after their employees. Most realize that once you hit a certain point in your life there's only so much money you can spend. Wealth is more than that. Rich guys want people to be as happy and comfortable as they are.
So from the perspective of a small business owner, what would a rich guy like Romney do as President?
For starters, he wouldn't eliminate the national debt. He knows, like most good business people, that all organizations use debt to grow. There's a right amount of national debt. Greece and Portugal have too much. We're getting to their levels too. Should our national debt be 50% of GDP? 75%? No one really knows. But it should be lower.Guys who aren't rich think that debt is bad. Rich guys know that debt is not bad. In fact, most of them became rich by leveraging their debt at some point in their careers (Romney used debt to invest in companies while at Bain).
A rich guy like Romney would be nicer to other rich guys. Why is it so wrong to make a lot of money? He wouldn't call them names. He wouldn't make populist speeches to agitate the crowds. That's because a rich guy appreciates what other rich guys can do for the economy. These are the guys with money. They're the ones that like to make money. And to make money they need to buy stuff, employ people, make investments and build things. This creates jobs and wealth for everyone. No doubt this will create more wealth for them. But that's what it's all about. Every small business owner knows this too.
A rich President would likely do everything he could to lower taxes, not raise them. If Romney's tax rate was 30% and not 15% he might not be feeling so rich. He might not want to take risks, invest, buy stuff, employ people. He might feel more like hunkering down at home watching the Oprah Network and letting his cash grow moderately in some safe investment. Romney, like many rich people with capital, has enjoyed low capital gain tax rates. He knows how that empowers. Money in your pocket makes you feel good. You invest. You spend.
Rich guys spend their entire lives looking for lower taxes. That's why Romney has his money invested in all sorts of tax saving vehicles and foreign bank accounts. Low tax environments attract capital. Rich guys understand this. A rich President is more pre-disposed to create a low tax environment to attract as much money as possible. And of course this money creates jobs and opportunities and consumer spending.
A rich President would be more corporate friendly. And that's a good thing. Remember when Romney stood outside that plant in Iowa and said "corporations are people"? Rich guys and small business owners get that. They're the ones who build these companies. They know they'd be worth nothing if it weren't for the talented people they employ who earn them their profits. Big companies, big banks, big Wall Street firms - these aren't nameless, faceless facades. hese are people. Hundreds of thousands of people doing their jobs.Just like at our firms. Attacking these big entities is attacking ourselves.
Rich people hate people who don't work. But they love people who at least try. Every successful business owner I personally know tries to give something back. They want to create opportunities for those who want it. Many of my clients fund scholarships, have intern programs, help out an employee's family in time of need. Romney, like most rich guys, supports many of the governmental programs for education and assistance that helps people get on their feet and get a job. They detest welfare. Small business owners and rich guys know that if you've made a lot of money you've likely worked hard to make it. They want to help people help themselves. But not just give money away.
Yeah, Romney's rich. So what?
Another version of this post appears on The Philly Post.