“I never had any money until I got out of the White House, you know, but I’ve done reasonably well since then." So says Bill Clinton, and it's because public service might not pay well while you're in office but it comes with rich rewards thereafter, mainly from speaking fees (we already know that another equally lucrative alternative is becoming a lobbyist). From Matt Stoller:
Most activists and political operatives are under a delusion about American politics, which goes as follows. Politicians will do *anything* to get reelected, and they will pander, beg, borrow, lie, cheat and steal, just to stay in office. It’s all about their job.
This is 100% wrong. The dirty secret of American politics is that, for most politicians, getting elected is just not that important. What matters is post-election employment. It’s all about staying in the elite political class, which means being respected in a dense network of corporate-funded think tanks, high-powered law firms, banks, defense contractors, prestigious universities, and corporations. If you run a campaign based on populist themes, that’s a threat to your post-election employment prospects.
... Running as a vague populist is manageable, as long as you’re lying to voters. If you actually go after powerful interests while in office, then you better win, because if you don’t, you’ll have basically nowhere to go. And if you lose, but you were a team player, then you’ll have plenty of money and opportunity. The most lucrative scenario is to win and be a team player, which is what Bill and Hillary Clinton did. The Clinton’s are the best at the political game – it’s not a coincidence that deregulation accelerated in the late 1990s, as Clinton and his whole team began thinking about their post-Presidential prospects.
...Speaking fee money isn’t just money, it is easy money. In one appearance, for one hour, Clinton can make $125,000 to $500,000. At an hourly rate, that’s between $250 million to $1 billion annually. It isn’t the case that Clinton is a billionaire, but it is the case that Clinton can, whenever he wants, make money as quickly and as easily as a billionaire. He is awash in cash, and cash is useful. Cash finances his lifestyle. Cash helped backstop his wife’s Presidential campaign when it was on the ropes.That's one way that holding office pays. But there are others. Last month Catherine Rampell asked, "is the socioeconomic gap between American politicians and their constituents really unusually wide?" Answer: yes, definitely. She compared Obama income vs average American (20:1) to Romney income vs. average American (500:1), and compared that with politicians vs. constituents through history. She linked to a 2011 article by Eric Lichtblau, in which he said:
Largely insulated from the country’s economic downturn since 2008, members of Congress — many of them among the “1 percenters” denounced by Occupy Wall Street protesters — have gotten much richer even as most of the country has become much poorer in the last six years, according to an analysis by The New York Times based on data from the Center for Responsive Politics, a nonprofit research group.He discusses why there is a growing gap between Congress members and average Americans, and suggests that one reason is the high cost of obtaining political office itself: since it costs so much to get in, people who can't bankroll their own campaigns or have rich friends to help do so are discouraged from seeking office. But more troubling, once in office, people tend to get really rich. One reason could be the speaking fees. Another is the lavish attention of lobbyists. Finally, Lichtblau reminds us of the study that shows Congress members are in all probability serial inside traders:
In a study completed [in 2011], Mr. Ziobrowski at Georgia State and his colleagues found that House members saw the stocks they owned outperform the market by 6 percent a year. Their research from several years ago found that senators did even better, at 12 percent above average. The researchers attributed the performance to a “significant information advantage” that lawmakers hold by virtue of their positions and the fact that they are not bound by insider-trading law.No insider trading restrictions, no really effective means to stop lobbyists from enriching politicians, either celebrity status or a lobbying position guaranteed on exit. This is a lot to worry about.