Both Trump and Biden could learn a lesson in personal finance from George Washington
When George Washington was offered command of the Continental Army by Congress in 1775, he accepted the role, but not the salary. He reasoned that his leadership had to be seen as an act of selfless commitment to the American Revolution.
You might think that wasn’t much of a sacrifice on the part of a wealthy planter. But although affluent, Washington was also incredibly illiquid. His correspondence shows him making tough financial decisions, including selling tracts of land, to meet his personal liquidity needs.
Yet Washington was aware that politics is perception — including the perception of his personal finances. As the national standard-bearer, he knew the public’s trust in the new government would be built through officials acting with integrity.
In other words, you can learn a lot about a man by looking at his money, and you can learn even more about a president.
As someone who studies presidential wealth, I wonder what Washington would think now about presidential money and the perceptions Americans have of it. Former President Joe Biden and President Trump are both examples of what has gone wrong. In a polarized political environment, both have displayed financial behaviors that allow the public at times to believe that these men lack integrity — and that their finances can be weaponized against them.
Money has long been ammunition in politics. Take Martin Van Buren. Despite growing up poor, he was targeted for his “royal lifestyle” by the time he was in the White House, especially in comparison to his political opponents. This conveniently overlooked the fact that Van Buren was self-made and spent his own funds on the luxuries he enjoyed. It didn’t matter — public trust was eroded.
Presidents who were savvier acted to mitigate doubts about their finances. Abraham Lincoln, for instance, came to Washington in 1861 with a significant net worth of $15,000 and proceeded to save more than half of his salary in Treasury notes and bonds that supported the war effort. Richard Nixon, in disputing a campaign finance issue in 1952, detailed his net worth on national television in his famous Checkers speech. And both Lyndon B. Johnson and Jimmy Carter used blind trusts to manage their family businesses, although neither situation was ever truly conflict-free.
What has changed is not the type of assets that presidents own — we’ve long had presidents with complex asset bases, from plantations and slaves to newspapers to gold mines. The real change is us. Since the 1970s, Americans have become cynical and distrusting. The idea that any politician might act with integrity when it comes to their money has been thrown out the window.
Biden was not the most financially savvy president we’ve ever had. His financial skills are average and he is overindulgent with his children, but he should have worked harder to make sure his sloppiness wasn’t misinterpreted.
In 2018, Biden made a short-term, interest-free loan of $240,000 to his brother James, which was paid back two weeks later. From a technical standpoint, there should have been a loan document with a set interest rate or a gift of the interest. The lack of clarity caused some Republicans in Congress to refashion this simple family loan into proof of a nefarious criminal enterprise.
Trump has a different issue: He refuses to prioritize the country over his own financial interests. Whether failing to release his tax returns or launching a memecoin, he does not take the appropriate steps to build trust. Instead, he often takes advantage of tax and estate planning to obfuscate.
On the surface, Trump’s use of a trust to hold his social media site Truth Social seems like compliance. But it is a revocable trust, so Trump still has control, with his son Donald Trump Jr. as trustee. This isn’t arm’s length by any stretch. Rather, this situation needs to be managed like a CEO holding company stock, where compliance requires rigid rules.
Neither Biden nor Trump are unique. Both are allowed to engage in their financial behaviors because we don’t have a system that keeps them in check.
To restore the financial transparency and integrity that Washington envisioned, Congress should require that the president retain a formal “family office” structure that manages their tax, estate and investments, and is run by a team unaffiliated with the president and their family.
Further, this office must also only manage investments that are in diversified exchange-traded funds while the president is in power, and should provide annual public reports in layman’s terms, similar to Warren Buffett’s annual Berkshire Hathaway letter.
George Washington wasn’t perfect — he was a slaveholder, for example — but during his presidency, he acted with honor. He was gifted $20,000 of James River Canal Company stock by the Commonwealth of Virginia in appreciation of his service. This stock could have helped his tight liquidity situation. Instead, Washington donated the stock to Liberty Hall (now Washington and Lee University), where today every student still receives $1.87 toward their annual tuition from our first president.
The stakes of a president’s personal finances are higher than ever; this isn’t about financial planning, it’s about winning back Americans’ trust. Harry Truman was fond of saying, “Always do right. This will gratify some people and astonish the rest.” The American public is ready to be astonished.
Megan Gorman is the founding partner of Chequers Financial Management and the author of the book “All the Presidents’ Money: How the Men Who Governed America Governed Their Money.”
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