politicians are good for bussiness

politicians are good for bussiness

Deleted Member

Sep 19, 07 at 02:41pm
Why politicians are worth buying
When companies give to candidates, their stocks perform better. That might not be the recipe for a great democracy, but it makes for a better portfolio.

By Michael Brush
Want to find a great stock? Find a donor.

A political donor, I mean.

Here's why: Companies that give money to political campaigns have better-performing stocks, according to a new study, than companies that don't contribute. It's no small gap, either. Corporations that give the most have beaten the market by 2.5 percentage points a year over the past 25 years.

"It doesn't surprise me at all," says Charles Gabriel, a longtime political analyst with Prudential Equity Group, a division of Prudential Financial (PRU, news, msgs). "Unfortunately, an investment in Washington pays off."

What is surprising is how much companies get for so little money. The public companies that do give money, on average, fork out just $1,700 to $2,000 per campaign and support an average of 56 federal candidates in each two-year cycle.

Spreading the wealth
The study, "Corporate Political Contributions and Stock Returns," could double as a how-to guide for companies looking to buy influence. The best approach to giving, for instance, isn't to buy a single lawmaker. Rather, companies that contribute to the largest number of political campaigns get the biggest benefit.

"Much like a venture capital portfolio of many startups, a few of the supported candidates will 'pay off big' and result in increases in firm shareholder wealth," says the study, which tracked the impact of more than 1 million corporate campaign contributions by about 2,000 companies from 1979 to 2004.

Talk back: Do candidates' finances influence your opinion and your vote?

The study used a model portfolio of all companies that donated significant amounts to federal political campaigns. The researchers gave more weight to companies that made the biggest contributions and rebalanced the portfolio once a year. They ranked companies by contributions from the prior five years and updated the portfolio based on that measure every year.

So why do companies get so much for so little? One of the study's authors, finance professor Huseyin Gulen of the University of Michigan, offers a few explanations.

The average corporate donation of around $2,000 may seem small, but it is large compared with the typical $115-per-campaign contribution from individuals. So even though individuals account for the lion's share of any single candidate's campaign war chest -- 40% to 80%, compared with around 10% from companies -- the corporate donations stand out.

A relatively small donation may serve as a proxy for bigger favors companies do for politicians. Think flights on corporate jets, expensive dinners and hosting of fundraisers. "The direct cash contribution is just one of a number of things," agrees Gabriel.

The study looks only at contributions from corporate political-action committees, which collect funds from individuals inside companies. The study does not tally "soft money" contributions to special-interest groups that pay for things like issue advertising or voter-registration drives.

The value of a Democrat
Several conclusions about the benefits of corporate support for politicians seem fairly obvious. But they're worth noting for anyone who wants to track campaign contributions -- posted at the Federal Elections Commission Web site -- as an investing tool.

Companies get more bang for the buck if they support:

More-powerful politicians, such as congressional-committee heads.

Home-state candidates.

Candidates for seats in the House, where budget and tax laws originate.

Though companies support Republicans more than Democrats ($43,000 per election cycle compared with $31,000, on average), they get a bigger payoff by supporting Democrats. Companies that tilt their contributions to the left, and to home-state candidates, outperform the market by 3 percentage points a year, on average.

Video on #text blocked# Money
Video: Boomer politics 2007

Social Security, health care and the war in Iraq are bound to remain hot-button issues this year.

Does this mean Democrats are more easily influenced by campaign contributions? Not necessarily, says Prudential's Gabriel. Instead, Democrats are more likely to hold swing votes because Republicans have more of a natural inclination to support laws that favor business. "If you are trying to assemble a critical mass of votes, that marginal Democratic vote is worth a lot. Democrats are the ones that get you over the hump," Gabriel says.
Edited by Deleted Member Sep 19, 07 at 02:41pm

Deleted Member

Sep 19, 07 at 08:38pm
I'm telling you, jr.
Keep your rants short, or nobody's gonna read them.:roll:

Deleted Member

Sep 19, 07 at 09:50pm
it is being read,just ignored cuz it makes people uncomfortable to see "mr.smith goes to washington" in cold,hard data.
kinda destroys their faith in who they are voting for and no one wants to admit they help put them in office.if they start admitting anything like that to themselves,they start thinking and lord forbid that ever happened.
their rose coloured glasses suddenly start making everthing look bloody instead of hunky dory.
gotta keep the blinders on so you can't see the monetary bloodbath left in the wake of the free-for-all rape and pillage of our economy.
it's us against the elite and the only ones in the middle now are the wanna be elite and the once true middle class on the expressway to the poor side.
believe it or not, but i do feel sorry for all the honest, christian republicans that were duped into believing the massive bush lies and twisted half truths.i think deep down alot are starting to realize a few things about this gang of cut throat theives; it hurts their pride to think how badly suckered they were.
not all but more and more each day.
hows that for a rant?
this one is manifesto grade,for sure.

Deleted Member

Sep 19, 07 at 10:13pm
I kinda like Tits, butts and pussies, myself.:oops:

You know I would never stir up a controversy.:-)

Deleted Member

Sep 19, 07 at 10:40pm
no way would you do that!
unless stevesman comes a whinin'


Sep 20, 07 at 09:16am
Just some food for thought, but I think it's obvious that companies with higher profits will donate more to just about anything.

If profits were down, they don't have the money to donate. :wink:


Sep 20, 07 at 12:11pm
Duck Sr is right, if they go on to long, not worth reading. Give a synopsis and a point of view and wait for feedback, good or bad.lol Just a thought........John

Deleted Member

Sep 20, 07 at 12:15pm
Your profile is still inaccessable.
How are all the Ladies going to send you private messages?:cry:

Maybe click contact at the bottom of the page, and ask them.:-)
Edited by Deleted Member Sep 20, 07 at 12:15pm

Deleted Member

Sep 20, 07 at 12:53pm
Duck Sr is right, if they go on to long, not worth reading. Give a synopsis and a point of view and wait for feedback, good or bad.lol Just a thought........John

if i give the cliff notes version,everybody attacks wanting proof calling my statement un-founded.
read it or not,doesn't matter to me.
the ones who are interested in the article will read and comment.
if no one is interested,so be it.
seems everyone really jumped on the bash hillarys mandated insurance scam and it was just as long,guess it depends what side of the political arena you squat.
the though and reasoning behind the comments usualy interest me more than the content.
i get my jollies.