Myths and misunderstandings

Myths and misunderstandings abound in this election season. Nearly every day, a casual reading of the newspaper reveals a flawed conclusion worthy of scrutiny.

Rep. James McGovern, D-MA, perpetuates the myth that the Republicans are the party of big money. In comments published on 10/12/2010, McGovern states that “Republicans have the money but we have the people.”

The Federal Election Commission tells a different story. For the 2010 campaign so far, the Republicans have raised nearly the same as the Democrats ($604 million vs. $592 million). That amounts to $1.02 to the Republicans for every dollar to the Democrats – hardly a landslide. But in the 2008 election cycle, the Democrats raised $1.9 billion to the Republicans paltry $1.3 billion ($1.47 to the Dems for every dollar to the GOP). I don’t recall Mr. McGovern (or Obama or NPR or the NY Times) decrying that enormous inequity. In any case, over the past three election cycles, the Democrats have raised far more cash than the Republicans.

In a recent blog (“Supply and Demand, not taxes, drive job growth"), Amy O’Brien, a very nice person I’m sure, exhibits a common misunderstanding of how capitalism works. In opining on the effects of international companies expanding operations overseas, Ms. O’Brien asks and answer: “Where does (sic) the cost savings go? To the executive team. It certainly doesn’t ‘trickle down’ like they’d have us believe.” The facts tell a different story.

When Carly Fiorina, then at the helm of Hewlett Packard, expanded HP’s overseas operations, she did so out of her fiduciary duty to her bosses – the stockholders. As a result, HP was successful and profits increased. Fiorina and the executive team were rewarded for their success. The stockholders were also rewarded by an increase in their dividends and equity.

Just who are these fat-cat stockholders? One good example is California school teachers, police, and fire fighters who, as beneficiaries of CALPERS (the California Public Employees' Retirement System), very much care that CALPERS holds over 7.5 million shares of HP and fervently hope that HP continues to be profitable.

The internet is a powerful tool. I strongly urge you to do your own research and don’t take what you hear for granted. But be careful – there are many slanted opinions on the web – right wing and left wing blogs are plentiful. Stick to objective sources such as the Federal Election Commission and CALPERS.