Tagg Romney's Getting Rich off Family Connections

Moneybox
A blog about business and economics.
May 15 2012 1:57 PM

Tagg Romney's Getting Rich off Family Connections

I'm a couple of weeks late on this, but the really interesting part of the Michael Luo/Julie Creswell article suggesting that Tagg Romney's success in raising money for his private equity fund is all about folks trying to curry favor with his dad is the part where Tagg denies it:

“No one we went to as an investor said, ‘Oh, your dad is Mitt Romney, I’m going to give you $10 million,' ” Tagg Romney said, noting that his father’s political future was uncertain when the firm began. He added, “Our relationships with people got us in the door, but that did not get us investors.”
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As far as an allegation of political wrongdoing, that's a defense. But as an indictment of the American economic system, it's damning. There are any number of struggling debt-burdened recent college grads who'd love to collect two and 20 managing a medium-sized private equity fund. The country is littered with Starbucks baristas and UPS truck drivers and unemployed real estate agents who'd love that kind of opportunity. Maybe if they got the chance they'd squander it. Maybe if they got in the door they wouldn't get the money. But they're not getting in the door. As Tagg Romney says, he never could have had the financial success he's currently having if not for the fact that his rich parents' relationships with other rich people got him in the door.

I can't think of any way to purge society of this kind of unfairness, but it's a crucial reality on the propriety of progressive taxation and the general social prestige of rich people. The ability to get in the door is a valuable asset. Tagg Romney had it, and most people don't.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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