Sunday, December 11, 2011
The New York Times -- the motives of which are, admittedly, always suspect -- has an almost heartwarming story about Mitt Romney's personal frugality. Tidbits:
Soon after Mitt Romney handed out eye-popping bonuses to top performers at his private equity firm in the early 1990s, a young employee invited him to ride in his brand-new toy — a $90,000 Porsche 911 Carrera.
Mr. Romney was entranced by the sleek, supercharged vehicle: at the end of a spin around downtown Boston, he turned to the employee, Marc Wolpow, and marveled, “Boy, I really wish I could have one of these things.”
Mr. Wolpow was dumbfounded. “You could have 12 of them,” he recalled thinking to himself.
But Mr. Romney had insisted on driving an inexpensive, domestic stalwart that looked out of place in the company parking lot — a Chevrolet Caprice station wagon with red vinyl seats and a banged-up front end.
It was a stark sign of the tug of war, still evident in Mr. Romney’s life, between an instinctive, at times comical frugality, and an embrace of the lavish lifestyle that accompanied his swelling Wall Street fortune.
Mr. Romney, 64, has poured $52 million of his own money into campaigns for the Senate and the White House, but is obsessed with scoring cheap flights on the discount airline JetBlue.
He has acquired six-figure thoroughbred horses for his wife, Ann, yet plays golf with clubs from Kmart. And he has owned a series of multimillion-dollar homes, from a lakefront compound in New Hampshire to a beach house in California, but once rented a U-Haul to move his family’s belongings himself between two of the vacation retreats...
In making his case for the presidency, Mr. Romney has built his campaign around pledges to rein in government spending and reduce the federal debt. He argues that he has squeezed costs out of every organization he has led — as chief executive of Bain Capital, organizer of the Salt Lake City Winter Olympics and governor of Massachusetts — turning penny-pinching into a management style.
“He is as cheap as it comes,” said Bob White, a longtime Romney friend, business partner and confidant. “And I think that carries over into everything he does.”...
Thrift was a family virtue. Ann Romney used to cut her sons’ hair in the backyard. Her husband would tackle home renovations himself. Once, he enlisted everyone — for six weekends straight — in building a fence around their large home in Massachusetts. A Mitt mantra, recalled Spencer Zwick, a family friend, was, “Just because you can afford something doesn’t mean you should buy it.”
At Bain Capital, Mr. Romney scolded colleagues for flying first class. He batted away requests for high-end office decorations (preferring faux-wooden desks). To set an example, he ate bag lunches in front of his computer....
It sort of goes on from there, with a good bit of background about all chores he had to do as a kid and such, and this nice conclusion:
Those close to Mr. Romney say he typically defers to his wife on large purchases — especially homes, most of which are in her name.
“Mitt is the cheapest guy in the world, except when it comes to Ann, because he loves his wife more than anything,” said Mr. Stemberg, the Staples founder, who recalled Mr. Romney darting into a store during a business trip to buy his wife “an extremely expensive coat.”
There are those who complain that Mitt Romney is not the sort of person you would sit down and have a beer with -- uh, no -- but there are other things that are appealing about him. The frugality described in the linked story is a trait that runs through my own well-off family and that reached its apotheosis with my maternal grandmother, who was exceedingly generous with her loved ones and extraordinarily thrifty all at the same time. Everybody in my family (only a few of whom would drift so far to the right as to vote for Mitt Romney) would nevertheless instinctively understand this aspect of him and admire him for it.
Beyond that, Romney by his example -- and many other quietly wealthy people -- exposes a barely-discussed aspect over the distribution of wealth: Is the problem, if there is one, that wealth itself is unevenly distributed, or is it that benefits of wealth are unevenly distributed?
Now, neither the Romney family nor other "frugal wealthy" people live poorly by any means. But the example they set is superior to the behavior of the "flaunting rich" in several important respects.
The frugal wealthy, by their choices, remind us that there are motivations for work, often the most powerful motivations, that come from a place other than rank materialism. This is why so many people in business care less about lowering taxes, per se, than about shrinking government at all levels and getting it out of the way. Why? Because bureaucratic and regulatory interventions that slow down businesses also frustrate and obstruct the creativity of business owners and executives, for whom business is the inspiring creative act of their lives.
The frugal wealthy also remind us that conservation, rather than waste, is an important value, regardless of one's financial capacity to waste. Conservation, of which conservatives ought to approve, has declined in popularity on the right because of its apparent association with environmentalism, which has become an excuse for coercion rather than an expression of the virtue of thrift. But that does not mean that conservation is not a virtue in and of itself, and the frugal wealthy do well by reminding us of that.
Also, the frugal wealthy understand that it is not wealth per se but rather its flamboyant display that erects barriers between the rich and the rest. Gated communities, private jets and the mass promotion of ridiculously expensive luxury goods -- all widespread only in the last generation -- have done more to provoke class division and remove the rich from contact with ordinary people than the actual increases in their wealth.
Finally, the frugal wealthy define the purpose of wealth differently, and more constructively, than the flaunting rich. Capital, in the hands of people who understand its purpose as the frugal wealthy do, is an immensely powerful means for improving everybody's standard of living. See, e.g., not only the great businesses of the era but the many libraries, museums, schools, universities, and other cultural institutions built by the frugal wealthy. Capital, rendered in to mere money to be spent on consumption, does much less for all of us.
Which is why it is so unwise to hand it over to politicians.
Sounds like a case of 'penny wise, pound foolish" to me.
But then what do I know?
IMO, a "heartwarming story' about Romney by the Democratic Party mouthpiece, the NYT tells me they think he is the most vulnerable GOP candidate.
OTOH I could be wrong. Have they done a friendly piece on Gingrich?
Once again, I think Mitt is a Great Man and a Good Guy. Much of what I say about him is how I think typical voting blocks will look at him.
Cutting your own hair when you're rich. That's just stupid. The old Italian guy down the block needs the business. It doesn't figure in how to knock a trillion dollars out of the annual budget.
"Frugal rich" won't help except among the 1%. For most, it's just another infuriating example that Mitt thinks he's better than them. Mitt's new meme "merit-based society" doesn't work either. Not everyone in Mitt's family is "frugal" -- including his wife, apparently, nor earning their way. Expect to hear lots about the relative layabouts in Mitt's family.
This only helps Mitt lose the vote of the people who buy lottery tickets -- there's a lot of them. They don't dream of winning and then not buying that sports car.
People pull the lever for the guy they think best represents their ideals and understands their needs. Mitt doesn't compute for many -- he could just as well be from Mars.
Let me make it clearer. George W. Bush came off as a regular guy. It helped him bear Al Gore, who didn't. There was truth to this, as people knew W. had struggled in his life. That became an asset. It also made W. a better politician than his father.
I thought Mitt would know better about how to build a mass market brand.
The choice seems to be between Mitt and Newt. Neither are even remotely regular guys. I've known a lot of historians, academics, and rich people in my lucky life, and I feel a lot more comfortable with Mitt responding to the 3 a.m. call than Newt. Not even close.
My Mother often pointed out that this person or that person was old money and then with disdain, point out that so so was one of those nouveau riche. As I got older, I realized that her distinction was more about class than about the length of time someone or someone's family had the benefits of wealth.
She would also tell of having lunch with the President of her Board, one of the wealthiest women in the city and how this woman always tipped to the penny. When my Mother threw down more than whatever the going percentage was back then, this wealthy woman would make change and give the rest back to my Mother. She was fond of saying that you don't accumulate wealth by throwing money away, you don't accumulate a good reputation by cheating someone out of their honest due.
And when I was little, I became quite upset when meeting an elderly gentleman with patches on his elbows. Too young for tact, I asked him if he was too poor to get a new jacket. Later my Dad explained to me that the man wasn't poor at all, in fact, he was quite wealthy and he believed in buying good quality of classic style and having it last a lifetime. A lesson that thru the years was drilled into me again and again.
Through the years, some of the wealthiest people I've known are also some of the most frugal. Not miserly, just careful and not much into fads or showing off for the Joneses.
W knew who he was and was comfortable in his own skin, Romney the same, IMO. They do not need fancy $400 hairdos or fancy anything to prove to the world who they are. Good men backed up by good women.
I'm not surprised at the outward signs of frugality from Romney or any number of other "frugal rich"; unless you're trying to attract women, there's very little upside to alerting strangers that you've got money, and lots of downside.
On another note, what is the deal with criticizing gated communities and equating them with private jets and such? Is that a NY/NJ thing? Most of the people in gated communities are at best upper middle class, and in a lot of places not even that. When I lived in the Dallas area, you could buy a home in a gated community for under $250K, and the same is true where I live now. Hardly jet-set country.
Who cares how frugal Romney is with his own money?? The question is how frugal is he with taxpayer's money. And the answer to that question is that his record as Mass Gov is mixed at best. Further, he was and remains ardent supporter of the bank bailouts which normalized trillion dollar deficits at the federal level.
Obama is a big government limousine liberal. Romney is a big government Rockefeller Republican. They could golf together at the same posh private club, if only it admitted blacks and Mormons.
A Republican cannot win without the active support of the conservative wing of the party (See, McCain), and Romney does not have it. I will not vote for Romney under any circumstances, and I consider myself relatively moderate. Romney will go down in flames in the general election.
Gated communities strike me as one of many examples of the increasing self-segregation of our civil society. While they are attractive, perhaps, for people in them, they are a clear rejection of people outside of them. I have an old house with a front porch close to the side walk, and know not only my neighbors but lots of people who regularly walk by, from many walks of life. Gated communities are accessible only by car, and market one of the least attractive aspects of wealth to the middle class. A shame, in my opinion.
Anon Attorney, I think Romney and Obama could not be more different, but to each his own. There was very little that was "common" about many of our greatest presidents. As for McCain, I think you grossly misdiagnose history if you think he lost because he was not conservative enough. He lost because the financial crisis exploded in September, and his response looked panicked and incompetent. Ridiculous, frankly. He was way of his depth. Obama at least appeared to understand it. And, of course, Obama from the perspective of 2008 was an extremely attractive candidate.
I don't like gated communities, they make me feel like I'm entering a prison compound. And in today's world they don't necessarily mean posh. After her divorce, my daughter moved into a 2 BR apt in a compound of apts ranging for $400-$600 a mo. in Orlando, FLa. It was gated. She chose it as a single working Mom, thinking it would be safer for her daughter. For miles along the same street there were similar compounds at similarly low rents.
"Gated communities strike me as one of many examples of the increasing self-segregation of our civil society"
I'm not sure self segregation is increasing. I am sure it's normal behavior for human beings. Gated communities are really only a rejection of certain elements, the kind I'm pretty sure you reject yourself. I travel a lot, and when I do, it's nice to know anybody who wants to can't come cruising through my neigborhood looking for a house to break into.
"one of many examples of the increasing self-segregation of our civil society"
Is this a matter of yearning for good ol' days that never were? When I was growing up there were three country clubs in town - Protestant, Catholic and Jewish.
This is a great posting, for a number of reasons - Thanks to the mighty TigerHawk for the excellent commentary.
The aspect of the story relates to the true American Ethic, for me personally, more than just mere frugality.
It is about being sound, wise, never wasteful - the entire story reveals the sincere American Ethic which made us such a winner in so many ways. It is the mindset which wisely empowers one to be in total control of one's existence. Never to become dependent, prepared to handle all.
Stunning however, to read in the comments, the same hostile offering of "Ignoramus". This personal bias is way over the top. It isn't reasoned or healthy. The bias is even trying to distort a clear positive, into a desperate effort to make something negative. It is silly and revealing.
What could one do instead?
Step back. It is never too late. Let go of the bitter personal bias. Recognize those pushing this bias amongst us, are stuck on very misguided fashion seeking belonging. It will help in the long run. Besides, there is so much to learn from the genuine success.
The fashionable identity/image game is part of the reason why some are foolishly now hyping a tired Beltway Insider who hides behind "speaking as an historian" and swindled 1.8 Million via Fannie and Freddie. Newt Gingrich is a disastrous political offering, destined to lose any National Election. We have to overcome the self destructive biases and superficial fashion. We simply cannot help reelect Obama with the likes of Newt Gingrich.
The bias against the successful Private Sector product who is a proven CEO with sound accomplishment and ability, is simply not healthy, reasoned, or conservative.
Anon Attorney doesn't actually seem to know Mr. Romney's real record in MASS, or even in the Private Sector. The offering seems to be more rumor, myth, stereotype.
Case in point, Romney inherited a deficit of 3 Billion and balanced the budget as Governor.
Few in the Conservative arena, many who follow the fashion, seem to even bothered to look at the actual record.
Romney's reductions of regulations, taxation, etc., helped to actually turn around an entrenched Democratic Partisan failure (even with a Democratic Partisan controlled legislature).
Romney vetoed numerous Democratic Partisan efforts, such as minimum wage increases, gay marriage, taxpayer funded education for illegal immigrants, etc.
He even tried to get the Death Penalty reinstated, empowered local law enforcement to be able to deal with illegal immigrants, passed a needed drunk driver effort called "Melanie's Law".
The Man has gotten a bad rap, primarily due to ugly religious bigotry, resentment for a "wealthy" success, his typical professional demeanor often provided by experienced Executives, etc.
No doubt, the State Level Mandate was questionable, but the distortion of the MASS Health Care offering only reveals further, the lack of sound conservative analysis and the overwhelming emotive stereotyping. Especially those intentionally trying to distort the enormous difference between a State level offering, vs. the Federal Mandate which Newt has been entertaining for years.
The hype running from Trump, Cain, Bachmann, Perry, now Gingrich, etc., is pure evidence this is not principled conviction.
We have to get it together, and stop the folly. Romney is clearly, especially after the watching the last debate, the best offering. He is clearly the sound Executive for the job. Newt on the other hand, burned in the exposure of the spotlight, his entrenched Beltway Insider status was fully exposed. Watching Ron Paul publicly remark upon Newt's enterprise raking in taxpayer funds via Fannie and Freddie was simply embarrassing.
@TH: In what ways are Romney and Obama different, other than their rhetoric? Obama's rhetoric originates from the left, but his governance has been fairly center-left and even pragmatic.
Romney affects a conservative accent, but governed Mass from the center-left. The signature act of both men in office was a universal coverage health care act with an individual mandate. An observer dropped here from Mars would, upon reviewing their respective track records, assume these two men belonged to the same political party.
Which begs the question: Precisely what is the point of a Republican party that nominates a candidate who is, for all intents and purposes, a Democrat?
Almost every single assertion of fact in your post appears to be wrong. Start with the linked Wikipedia entry and come back to try again. Romney governed from 2003-2007, although he effectively abdicated in 2005 to run for President in 2006. In office Romney increased taxes, passed universal health care, increased the minimum wage, supported regulation of greenhouse gasses, gay marriage, and gun control, increased business fees and regulation, and presided over anemic job growth in Mass. This is an awesome list of accomplishments, provided you are a Democrat.
There is not a single conservative effort in Romney's record of governance in Mass. Not one.
@Anon, On the question of health care reform, there is more than a little nonsense thrown around by both sides. Before Obama, pretty much everybody, both left and right, agreed that (i) the American system of financing health care was seriously inefficient and set up to cost trillions we do not have when the demographics turn against Medicare and (ii) exclusion of people from the insurance system because of a pre-existing condition both raises those costs enormously (because they get treated anyway through sloppy internal cost-shifting, but very wastefully, and because most people know somebody with a pre-existing condition and worry about them). Well, if want to get rid of pre-existing conditions *and* preserve the private decentralized insurance system (as opposed to a Canadian or British single payer system), then you need an individual mandate or its functional equivalent for, I would hope, totally obvious reasons. So Romneycare contains elements about which virtually everybody agreed until Obama, Pelosi, and Reid took it over.
The right is especially full of it on the question of the individual mandate, and it is playing in to the left's trap. If the mandate goes down *and* if the rest of Obamacare is considered severable, then the next move will be almost inevitably to a single-payer system. Why? Because going to community rating (disallowing pre-existing conditions) is *hugely* popular. Which is why you never hear any objections to community rating from a Republican presidential candidate.
Finally, there is the constitutional argument over the individual mandate (can the Congress force somebody to buy something just because they exist?), which I agree with but which is a bit of a red-herring. Why? Because the Congress could definitely accomplish the equivalent result with the taxing power. The Democrats just did not want to do that because they knew the Republicans would beat them over "raising taxes" in violation of Obama's pledge not to do so.
So Romney enacted policies that Republicans all over the country supported when they were enacted, and his plan is quite different than Obama's in any case. It has to be by its nature, in that many of the features that make the federal scheme so annoying are not available to a state plan.
Certainly quite a contrast with the Obamas' "life style of the rich and famous." Romney does seem to lack the sense of entitlement that is insidiously permanating out country and weakening it.
One aside, gated communities are for people who like cold pizza!
As for Romney vs. Obama as people, I suppose I think they are massively different. Whatever else might be said, we know who Mitt Romney is. His family has a two generation history of both commercial and political accomplishment. We know his background is more detail now, even, than Barack Obama. We know that Romney has been working his butt off his entire life. Obama, not so much. We know that Romney has actually done numerous things that make a positive difference in the world. Obama, before his presidency, not so much. Like at all. Now, after a term, well that's the argument, right. We know that Romney, like all Mormons virtually by definition, are ideologically patriotic Americans. You will never get an "apology" tour out of Mitt Romney, and that's not just politics. And we know that Mitt Romney is a genuinely religious person, if you care about such things, and Barack Obama is not.
Romney was the GOP governor of one of the three or four most liberal states in the country. He brought fiscal discipline to Massachusetts, which under his tenure cut spending during boom times and moved from a substantial budget problem to surpluses. As discussed above, his health care plan was a good first step in the direction of fixing our wrecked system of health care finance, *given* that he had to operate within the exist federal constraints, which are endless.
I'll grant you that Obama and Romney are different men with different histories. But on the issue of governance the gap between them is so thin it lets almost no light pass, leaving them indistinguishable.
I enjoy your blog, TH, and we agree on 95% of the issues. We are about the same age, cyclists, attorneys, both hail from Iowa (I went to law school at Iowa). But while you were FROM Iowa you weren't OF Iowa. Iowa City is an oasis in the middle of cornfields where the real people live and work. You grew up in Iowa City. I grew up in those cornfields.
People's politics are informed by their backgrounds. Your background appears to be solidly New England country club Republican. Hence you comfort with and admiration for Romney.
Romney is failing miserably in Iowa at least in part because he is the poster boy for silver spoon elitism. The son of a politically connected, wealthy, business family, Romney waltzed into Harvard Law School with a BA in English from BYU and with no evidence of excellence, except that his father was the director of HUD in the Nixon administration.
From Harvard to BCG, then Bain and ultimately to the land of wealth in private equity at Bain Capital. Romney has not released his tax returns, almost certainly because they reflect that most of his income was Carried Interest taxed at a 15% capital gains tax rate.
How do you think corn farmers in Iowa are going to react when they find out that Romney paid a lower tax rate than they did?
Romney would certainly be a better President than Obama--one could hardly do worse. But he is the nightmare candidate. Conservatives will find nothing to like about him. Democrats will shred him, accurately, as a product of privilege whose loyalties lie there.
I predict a landslide victory for Obama if Romney gets the nod.
I don't disagree with you that health care raises complex policy questions, or that an individual mandate, while clearly unconstitutional at the federal level, may be part of a solution at the state level. (I freeloaded during college and law school because I could not afford health insurance. Other than the University Clinic, I did not see a doctor for almost 8 years, but what the hell, I was in my 20s.) But that's an issue for another post--I have to get back to billing.
I love these stories about the frugal wealthy. Here's a classic: My former employer, Mr. Roger Milliken, once marched into a Dillard's department store in Spartanburg, SC, handed his sport coat to the associate in the men's department, and said "Do you know of anyone who could sew a new lining into this coat?"
Mr Milliken was one of the wealthiest men in this country at the time. This is just one of thousands of stories of his legendary frugality