Why are some rich people so cheap?


Treasury secretary Steven Mnuchin is a former investment banker at Goldman Sachs and is reportedly extremely wealthy. And yet he seems to be the kind of rich person who is incredibly cheap, the sort who tries to get other people to pick up the check for his own expenses. Maybe that behavior works when he has dinner out with friends but he seems to be trying to do that to taxpayers too.

He is already under an investigation for being suspected of using a government plane to travel to see the total eclipse, using the excuse of a meeting that he had to attend. That trip came under scrutiny because of his wife Louise Linton’s flaunting of her designer clothing and her condescending response to someone who called her out on it.

Now comes reports that Mnuchin had requested a government plane to take him and his wife on their honeymoon to Scotland, France, and Italy earlier this summer.

Officials familiar with the matter say the highly unusual ask for a U.S. Air Force jet, which according to an Air Force spokesman could cost roughly $25,000 per hour to operate, was put in writing by the secretary’s office but eventually deemed unnecessary after further consideration of by Treasury Department officials.

Mnuchin, an independently wealthy former Goldman Sachs banker, has already triggered a review of his travel for using government jet to travel to Louisville and Fort Knox, Kentucky last month. The inspector general is reviewing whether he improperly used that trip to catch a prime view of the solar eclipse with his wife, a Scottish actress and model named Louise Linton.

Mnuchin’s office denied he took that trip to watch the eclipse and said he was there to attend meetings on tax reform, and the Treasury Department said the Mnuchins would reimburse the government for Linton’s travel costs.

An official within The Treasury Department’s Office of Inspector General said that in addition to reviewing the Kentucky trip, it has started an official “inquiry” into Mnuchin’s honeymoon travel request.

That some extremely wealthy people are also extremely cheap in not a surprise. What is a surprise is that they could be so oblivious as to expect that red flags would not be raised when they try to stick taxpayers with the bill for their expensive lifestyles. In addition to being cheap, Mnuchin seems to be also somewhat stupid.

Comments

  1. jrkrideau says

    What is a surprise is that they could be so oblivious as to expect that red flags would not be raised when they try to stick taxpayers with the bill for their expensive lifestyles.

    One develops a sense of entitlement. IIRC, there was one CEO of a major US manufacturing company who needed two private airplanes : One for him and staff, one for his (large) dog who had a tendency to attack the staff.

    Then there was the British MP who billed the House of having the moat cleaned. He was later appointed to the House of Lords.

    Margaret MacMillan discusses heads of state or heads of government as suffering from hubris. I expect that this extends to other wealthy/powerful individuals, though perhaps to a slightly less extent.

  2. says

    Mano,

    A simple truth, people cannot become rich by making a lot of money, people become rich by not spending their money.

    Take Sam Walton, someone I’ve written quite a bit about. He drove the same pickup truck for most of his lives. Then there’s Warren Buffett, who has lived in the same modest, ranch house in Omaha for most of his life.

    Cheers,

    Jeff

  3. screechymonkey says

    But, Mnuchin is giving up so much to serve his country! He had to sacrifice that ginormous Goldman Sachs salary, and is now expected to get by on a paltry $200,000 a year, like some… peasant?

  4. says

    They probably wouldn’t be rich if they weren’t greedy bastards. So we shouldn’t be surprised that they’re greedy bastards. Mnuchin’s, what, an investment banker?

    By the way, someone usually chimes in and says “some rich people are philanthropists!” which is true. Andrew Carnegie, for example, gave away 2% of his $50bn (2017 fortune) so he could re-brand as a nice guy. The rest of the money went to give humanity endless generations of Carnegie billionaires (and the money’s tax sheltered, offshored, and shuffled so nobody knows how much there is or where it’s buried) Most of these people aren’t nice. I bet Mnuchin’s a piece of work -- you can’t have a resume like his and be a really swell human being; he does nothing but profit from other peoples’ work.

  5. lanir says

    There seems to be a certain brand of asshole financial philosophy that says you should push everyone for as much as you can get without paying a dime, then use your money as a hedge against being called on your BS. It’s obvious why the people who practice this do it: once in awhile you can spend the same money many times. Like the examples above. Or like Trump shorting contractors.

    You don’t have to be rich to do it either, I’ve met my share of middle class and poor cheapskates of this stripe. The type of person who does petty day to day things to stick you with the bill. But if you’re rich you can do it to such a greater degree it can feel like an entirely different concept in action.

  6. rjw1 says

    Mano,

    The rule is simple—people become rich by spending other people’s money. Some plutocrats are cheap on a petty level, others will be more generous but they will still leave the major expenses to be paid by the taxpayers. Of course tax is optional for the rich.

    I’m a retired accountant btw.

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