Once upon a time a rich man named Romney ran for president. He could claim that his wealth was well-earned, that he had done a lot to create good jobs for American workers. Nonetheless, the public understandably wanted to know both how he had grown so rich and what he had done with his wealth; he obliged by releasing extensive information about his financial history.
But that was 44 years ago. And the contrast between George Romney and his son Mitt in both their business careers and in their willingness to come clean about their financial affairs—dramatically illustrates how America has changed.
Right now there’s a lot of buzz about an investigative report in the magazine Vanity Fair highlighting the “gray areas” in the younger Romney’s finances. More about that in a minute. First, however, let’s talk about what it meant to get rich in George Romney’s America, and how it compares with the situation today.
What did George Romney do for a living? He ran American Motors. At a time when the Big Three were fixated on big cars and ignoring the rising tide of imports, Romney shifted to a highly successful focus on compacts that restored the company’s fortunes.
It also made him rich. During his run for president, he released 12 years of tax returns, and in his best year, 1960, he made more than $660,000—the equivalent, adjusted for inflation, of around $5 million today.
Those returns also reveal that he paid a lot of taxes—36 percent of his income in 1960. This was in part because, as one report at the time put it, he “seldom took advantage of loopholes to escape his tax obligations.” But it was also because taxes on the rich were much higher in the ‘50s and ‘60s than they are now.
Now fast-forward to Romney the Younger, who made even more money during his business career at Bain Capital. However, Romney didn’t get rich by producing things people wanted to buy; he made his fortune through financial engineering that seems in many cases to have left workers worse off.
And there’s another contrast: Mitt Romney has largely kept his finances secret. He did, grudgingly, release one year’s tax return plus an estimate for the next year, showing that he paid a startlingly low tax rate. But as the Vanity Fair report points out, we’re still very much in the dark about his investments, some of which seem very mysterious.
Put it this way: Has there ever before been a major presidential candidate who had a multimillion-dollar Swiss bank account, plus tens of millions invested in the Cayman Islands, famed as a tax haven?
There are potentially legitimate reasons for parking large sums of money in overseas tax havens. But we don’t know which, if any, of those legitimate reasons apply in Romney’s case—because he has refused to release any details about his finances. This refusal to come clean suggests that he and his advisers believe that voters would be less likely to support him if they knew the truth about his investments.
And that is precisely why voters have a right to know that truth. Elections are, after all, in part about the perceived character of the candidates—and what a man does with his money is surely a major clue to his character.
One more thing: To the extent that Romney has a coherent policy agenda, it involves cutting tax rates on the very rich—which are already, as I said, down by about half since his father’s time. Surely a man advocating such policies has a special obligation to level with voters about the extent to which he would personally benefit from the policies he advocates.
Yet obviously that’s something Romney doesn’t want to do. And unless he does reveal the truth about his investments, we can only assume that he’s hiding something seriously damaging.•
• Krugman is a New York Times columnist. Send comments on this column to firstname.lastname@example.org.