Walter Jones points to a study released last month by Rice University showing political donations don’t have the impact they are often thought to have.
Rice University released details last month of research showing that in terms of influencing specific government policy, most companies come up empty-handed. Looking at 943 large, publicly traded firms, the researchers concluded that their political investments actually worsened their bottom line.
Putting a former public official on the board also coincided with weaker performance.
“Since our country’s founding, corporate political activity has been seen as promoting its own interests and agendas over those of the broader public,” said Doug Schuler, study co-author and associate professor of business and public policy at Rice’s Jones Graduate School of Business. “This study simply demonstrates that it might not be quite the return on investment that corporate America or the public at large believes it to be.”
The authors admit the results “fly in the face of popular notions of what leads to legislation.”
Remember the email blast I referenced last month that claimed any kindness to any politician anywhere is bribery? Yea, not so much.
The same email blaster now seems to think I’m “gnashing my teeth” over people exercising their 1st Amendment rights. Huh?
The Rice study, set to be released in full this fall, support the findings of another paper published by the Universities of Minnesota and Kansas:
A $10,000 increase in donations is associated with a reduction in annual excess returns of 7.4 basis points. Worse corporate governance is associated with larger donations. … We find virtually no support for the hypothesis that donations represent an investment in political capital. Instead, political donations are symptomatic of agency problems within firms.
I’ve made this comment before and I’ll make it again: a few phone calls or emails from constituents on a issue has a whole lot more impact than what special interests say or do.
You folks have a still lot of power in the political process. Use it.