Mitt Romney’s a self-made man?
The GOP presidential candidate may have made his own fortune, but he had a big head start
MY MOTHER grew up on the black side of segregated Mississippi in a family of teachers, preachers, and sharecroppers. She won money to go to college from an oratorical prize. My father - the son of an Italian immigrant - spent his childhood in a small town in Pennsylvania. He saw himself as middle class because he had two pairs of pants. (Poor people only had one.)
Like millions of Americans, they climbed the socioeconomic ladder painstakingly, through scholarships and federal loans and research grants. They became university professors. Yet I have never heard either of them ever claim to be “self-made.’’
So it was jarring last week to hear Mitt Romney - the son of a governor - taking that label for himself.
He told his audience that he earned his personal fortune of some $200 million by starting a company. He didn’t inherit it. And he has a point: Romney worked for his money. He has every right to be proud of it.
But he should also acknowledge that - while he reached the finish line of financial success on his own - he had a pretty substantial head start.
In 1963, the year my father’s father earned $4,400 as the curator of a small museum, Romney’s dad, a former automotive CEO beginning his first term as governor of Michigan, grossed $567,000. Romney went to an elite prep school and then to Stanford. He didn’t have to hold down a job alongside his classes or take on burdensome college loans. After graduation, his parents helped him buy a home for his young family in a safe, upscale suburb. Romney’s father ran for president - which could not have escaped notice when Romney applied to Harvard Business School or for his first job at a consulting firm.
Each one of these steps represents a crucial piece of social capital that successful parents pass on to their kids, quite apart from monetary inheritance. These benefits are real. College debt makes young people delay home purchases, marriage, and even medical procedures for years. Forty-two percent of all students who graduate with debt live paycheck to paycheck, compared to 24 percent who graduated debt-free. Parents who help their children buy homes or start businesses enable them to accumulate wealth far faster than those who have to borrow from a bank.
So Romney’s financial future was bright even before he was born. By contrast, others were dealt financial setbacks at birth.
One in five American children are born into poverty. One in 28 have a parent in prison. In 2010, nearly 2 million American children attended high schools where fewer than 60 percent of freshmen make it to their senior year.
No government program can fully erase the advantages successful parents give their kids. To pretend that such benefits don’t exist adds insult to injury.
I say all this not to hate on Mitt Romney but to inject a dose of reality into this raging national debate about what wealth means and who it should belong to.
All too often, we attach a moral significance to financial success. We attack the poorest as freeloaders who support a “food stamps president.’’ Or we attack the wealthy - regardless of how much value they have added - as selfish gobblers of the national pie.
Until recently, Americans tolerated income disparities in the belief that - across generations - the system is generally fair. As long as their kids had a shot at being the next Warren Buffett, they scraped and saved without complaint.
But the reality is that nearly two out of three poor kids grow up to be poor, while nearly two out of three rich kids grow up to be rich. Real social mobility - an equal chance at moving up or down - is only experienced by those in the middle.
And for those people, the traditional avenues for advancement are getting harder. College costs keep skyrocketing. Home values have plummeted. Union jobs disappear overseas.
Meanwhile, the setbacks that push middle class families downward abound - illness, job loss, divorce. Last year, the Pew Charitable Trust’s Economic Mobility Project found that fewer than half of all Americans believe their kids will have a higher standard of living than they do.
People are starting to feel the game is rigged. They now know that one man’s investment portfolio can earn more each day than the average American family makes in a year. That leads to a certain amount of psychological suffering. A loss of economic innocence. A large part of America is in mourning - not just for the wealth they lost, but for the shot at wealth that their children will never have.
At a time like this, the least Romney could do is admit that his own wealth grew out of his good fortune. To acknowledge that he was never in danger of only having one pair of pants.