This morning the Washington Post broke the news that Barack Obama got a sub-market interest rate when he took out a mortgage to buy his Chicago mansion in 2005:
The freshman Democratic senator received a discount. He locked in an interest rate of 5.625 percent on the 30-year fixed-rate mortgage, below the average for such loans at the time in Chicago. The loan was unusually large, known in banker lingo as a “super super jumbo.” Obama paid no origination fee or discount points, as some consumers do to reduce their interest rates.
Compared with the average terms offered at the time in Chicago, Obama’s rate could have saved him more than $300 per month.
Obama’s loan came from Northern Trust, whose employees have also donated $71,000 to Obama’s campaign. This is, of course, the same home purchase in which Obama was assisted by his fundraiser, convicted felon Tony Rezko, who bought the adjacent lot for the seller’s full asking price, while Obama paid $300,000 less than the asking price to the same seller for the house.
It has come to light that several Democratic Senators availed themselves of sub-market mortgages under circumstances that are more or less suspicious. Obama is in that rather tawdry category.
What is most striking to me, though, is not that Obama shaved a fraction of a point off his mortgage by being a politically powerful customer. It is, rather, the rapidity with which Obama was able to turn his ascension to the Senate into material wealth. The Post describes the Obamas’ mansion, purchased just a few months after Obama became a Senator:
The couple wanted to step up from their $415,000 condo. They chose a house with six bedrooms, four fireplaces, a four-car garage and 5 1/2 baths, including a double steam shower and a marble powder room. It had a wine cellar, a music room, a library, a solarium, beveled glass doors and a granite-floored kitchen.
How were the Obamas able to afford this on a Senator’s $162,000 salary? They weren’t, of course. But in January 2005, the same month in which Obama assumed his Senate seat, Random House “agreed to reissue an Obama memoir, for which it originally paid $40,000, as part of a $2.27 million deal that included two future nonfiction books and a children’s book.” How does an author who has never sold many books get a multi-million dollar book deal? By being an up-and-coming Democratic Senator.
Then there is Michelle Obama, whose salary doubled to over $300,000 when her husband was elected to the Senate. It was the Random House book deal, together with Michelle’s newly-discovered value to her employer, that paid for the Obamas’ Chicago mansion.
You can draw your own conclusions from all of this. It strikes me that Barack Obama is a very old-fashioned politician. He is a powerful man, and he expects the world to kiss his ring and shower him with money and other good things. This is a Chicago tradition, I guess, and it’s not hard to understand.
What’s a bit harder to make sense of is Michelle Obama’s attitude. She says that America is a “downright mean country.” Is this an insight that she had while sitting in her double steam shower? Or perhaps while fetching a prime vintage from her wine cellar, or musing in her solarium, or applying makeup in her marble powder room, or treading the granite floor in her kitchen? It’s hard to say. Maybe it’s just another instance of liberal guilt. But since Barack is as nakedly on the make as any politician in modern American history, the Obamas should perhaps drop the pose.
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