call from america

I realise I don't really have an opinion on ministerial pay, per se. Is it too high or too low, I don't know. The thing that annoys me is the arguments some people raise, the two most prominent being that 1) public service is about self-sacrifice and 2) our ministers earn much more compared to other countries.

For the first point, you can see my previous post. For the second point, I always thought that this was a moot point because in other countries, top leaders enjoy plenty of other kickbacks such as real power, and a whole bunch of business affiliationsa and concessions that might be seen as corruption on our sunny island. Anyway, rather than belabour the point, I found that it was expressed far more eloquently and convincingly (with numbers and statistics some more) by Janadas Devan in his recent Call from America. I heard this on 93.8 Live, but since managed to find it online as well. Happy reading ...

Radio Singapore International - Call From America with Janadas Devan
How much is Hillary Clinton worth?
April 11, 2007

How much were the Clintons worth when Mr Bill Clinton stepped down as president in 2000? Answer: More than US$11 million below zero – which was what they owed to all the lawyers who had helped to defend them against a flurry of charges in the 1990s. They had no home, having lived in public housing for a good portion of their adult lives – in the White House for eight years, and before that in the Governor’s mansion in Arkansas. Unlike almost every other previous presidential couple in the second half of the 20th century, the Clintons had no private vacation home – no Kennebunkport, as in the case of the elder Bush; no Crawford ranch, as in the case of the younger Bush..

How much are the Clintons worth now?

There are no exact figures – Mrs Hilary Clinton, as Senator, is obliged to disclose only a broad estimate of her wealth: for example, that the Clintons have a joint bank account worth between $5 million to $25 million, as well as a blind trust worth in the same range – but their total net assets must be in the tens of millions of dollars. We know that Mrs Clinton made at least US$10 million on her memoirs and Mr Clinton at least US$12 million on his. We also know that in 2004 alone, Mr Clinton made at least US$4 million giving speeches. The Clintons have paid off all their legal debts, and now own three homes –in Washington DC, in Long Island and in New York City. Aside from his speech making and memoir writing, his philanthropic work and his work on his Presidential Library, Mr Clinton is also an advisor to funds run by the Yucaipa Companies, a California private equity firm controlled by one of his many best friends, the billionaire Ronald Burkle. The New York Times reported last year that Mr Clinton will receive a share of the profits in the funds “should their returns exceed 9 percent over the life of the funds. One fund had reported a gain of 51.3 percent and the other 25.8 percent in 2005.” Mr. Clinton, according to the Times is also a partner in another “Yucaipa fund that invests in overseas ventures, for which
he receives regular payments and would draw one-third of the profits when the
fund is dissolved at least five years from now.”

''If we make money, he makes money,'' Mr. Burkle was reported to have said. Mr. Clinton's share of the profits in the Yucaipa funds could reach into the tens of millions of dollars. Not bad for a man who earned only US$250,000 a year when he was president and who had massive debts when he left office six years ago.

Which is better: The US system of relative poverty for officials while serving in government, followed by rather obscene amounts of money once they leave; or the Singapore system of relatively high salaries for public servants so they will stay in government for as long as possible? Americans and Singaporeans will have to decide these questions for themselves.

But it should be noted the US system has a cost. Mr Clinton is only one man, and he is not the only former president who has grown rich in his post-presidential years. Of more concern are the thousands of other public servants.

Take judges. Chief Justice John Roberts complained in January of the low salaries judges get. Appellate court judge get US$175,000 a year, about the same as first-year associates at top metropolitan law firms. And federal district court judges are paid about half what senior law professors get. As a result, the bench is losing judges. The hemorrhaging “has now reached the level of a constitutional crisis,” Chief Justice Roberts said.

Mr Clinton and other famous politicians can take care of themselves easily in their retirement. Not so judges and other public servants on low government salaries. The best leave for the private sector the first opportunity they get. They don’t lose. Instead the Government suffers; the judiciary is weakened; the public loses.