When I review a politician’s financial disclosures, it is typically pages and pages of mutual fund and ETF holdings in tax shelters such as IRAs and 401ks that total several million dollars. For example, the Financial Disclosure Report of my representative, Ann Wagner, contains 19 pages of investments that mostly consists of Vanguard and Fidelity ETFs and mutual funds that are spread out across a Fidelity Inherited IRA from her parents, a Fidelity IRA of her own creation, a Fidelity Roth IRA owned by her husband, a Fidelity Trust held jointly with her husband, a Missouri Most 529 Plan for her kids’ college education, some various life insurance policies, and a real-estate timeshare investment with her husband.
I point out Ann Wagner’s investment profile specifically because it provides a real-life snapshot of the typical net worth situation for an American politician.
In contrast, the Financial Disclosure Report of Alexandria Ocasio-Cortez is noteworthy because of how few assets it contains. On her Schedule A Form, she only identified three assets–a Charles Schwab Checking Account, a Charles Schwab Brokerage Account, and Prudential High Yield Z, which is a $4 billion high-yield bond fund that is in part managed by former Goldman Sachs day-trader Robert Cignarella (she owns this fund through a National Hispanic Institute 401k account).
Each of these three assets is listed on the disclosure form as being worth $1,001 and $15,000, for a possible total asset mix of between $3,003 and $45,000. Her campaign publicly disclosed that these assets total a little over $7,000.
On the liability side of the equation, Ocasio-Cortez has listed a net debt of $15,001-$50,000 owed to the U.S. Department of Education for her student loans. Her campaign indicated that the student loans are close to the $50,000 side, putting Ocasio-Cortez’s net worth somewhere around -$40,000.
This disclosure is noteworthy because it is unlike anything else I have ever encountered from studying a presently serving U.S. politician. Sometimes, people will say things like a given congressman has a negative million-dollar net worth, such as Emanuel Cleaver’s Financial Disclosure Report that indicates a negative net worth of approximately $2 million, but that is misleading because there are gobs of assets and investments–his finances are dwarfed by several million that he borrowed from Bank of America in 2009 in order to invest elsewhere.
But Ocasio-Cortez’s situation is something different. She’s never had an investment in anything above $5,000 in her life. Winston Churchill used to say that if you look at how someone spends his money and what he owns, you can get a pretty good profile of a person. It is easy to understand how policies calling for 70% taxes, the Green New Deal, and the abolition of student debt can come from Ocasio-Cortez when it would wipe out her largest debt and she doesn’t have many assets that would be subject to the tax. Incidentally, it’s also easy to understand why she struggles in her relationship with other progressive Democrats, including Nancy Pelosi who has a $100+ million net worth and would be affected by such a tax scheme. Reviewing the financial disclosures of American politicians can give you a real snapshot of their values and enable you to better understand why a given congressperson advocates for a particular policy.