Faulty Logic = Bad Math

In his ad, Congressman John Kline appears in an otherwise empty Metrodome, looks into the camera and tells us that “America’s national debt stands at 16 trillion dollars. It’s the equivalent to selling every seat in the Metrodome, every single day, for nine thousand years.”

It's unknown if Congressman Kline actually paid to rent those empty seats, or if he "borrowed" the Metrodome as a "Congressional Perk."

The announcer in Congresswoman Michele Bachmann’s ad tells us that “We all owe it, our portion of the national debt. Each of us owes over fifty thousand dollars to pay it off.” Congresswoman Bachmann then tells us, “I approve this message.”

It's not known if the baby's acting fee will be enough to pay their "debt," or if Congresswoman Bachmann invoked her "Congressional discount" to prevent the baby from joining the annoying middle class.

And, in his ad, Congressman Erik Paulsen, “the Math Guy,” tells us: “The national debt is up ten trillion dollars in 10 years. That’s fifty thousand dollars for every man, woman, and child. That’s unacceptable.”

It's unknown if his daughters were allowed to keep their acting fees for appearing in his ad, or if Congressman Paulsen demanded that they "donate" the funds to his campaign so that they don't learn to demand more "hand-outs" in the future.

These ads continue to drive home the message that the Republican Party has been repeating for almost four years: The deficit is our nation’s biggest problem. The hole President Obama – and all Democrats since the beginning of time - dug in creating it will cost each one of us, our children, and our grandchildren (not to mention their children and their grandchildren) more than $50,000 to pay off. 

(I have no idea why Congressman Paulsen went “off-message” to acknowledge that, perhaps, six years of the deficit might have actually originated during the Bush administration. The official Republican “fantasy” is that the entire budget deficit is the result of President Obama’s "failed policies" – which, for the most part, Republicans blocked him from implementing.)

Anyway, the Republican solution to our “deficit problem” is as it’s been for the last decade or so - take an axe to government programs, and use the money "saved" to provide more tax cuts for the very wealthy. After all, this worked so well during the Bush administration, when Dick Cheney assured us that "deficits don’t matter.”

But, I digress.

The above ads, and the recurring fantasy that “trickle-down economics” is somehow good for our nation, got me thinking. I know that “trickle-down economics” has been very good for the very wealthy, while being devastating for the middle-class and those less fortunate. But, how much does "trickle-down economics" really cost those who the Republican Party refuse to represent? Our nation’s deficit is just one cost. What other costs do Americans of modest means face?

Using the same faulty logic and flawed math demonstrated by Republican Representatives Kline, Bachmann, and Paulsen in their ads, I decided to find out. 

I decided to look at the cost of soda. Like other items in my shopping cart, the cost of soda has continued to rise. So, I looked up the total compensation for all named executives of the Coca-Cola Company (Coke) and PepsiCo (Pepsi).

According to their 2012 proxy statements, the named executives of the Coca-Cola Company (5 of them) received total compensation of $60,437,264 in 2011. The named executives of PepsiCo (6 of them) received total compensation of $63,441,406 in 2011. That’s a total of $123,878,670 for one year, for 11 executives at just two companies.

How that money is supposed to trickle-down into the pockets of “working class” Americans has never been clear to me.

But, using the same faulty logic, and the same bad math, as the three Republican Representatives, I did a bit of my own math. What I found was quite startling:

 

That’s right, at a consumption rate of one two-liter bottle per day, every day, for about 169,000 years, my family might come close to paying the total compensation for 11 top executives, at just two companies, for just one year.

Further, did your compensation go up during the Great Recession? At many large corporations, it sure did -- at least for their Chief Executive Officers.

At Coca-Cola, the CEO received $18,813,013 in 2009, $24,782,017 in 2010, and $29,115,573 in 2011, for a total of $72,710,603 in just three years. At PepsiCo, the CEO received $15,768,350 in 2009, $16,175,381 in 2010, and $17,116,089 in 2011, for a total of $49,059,820 in just three years. I don't know how many employees - if any - were laid off to justify such rewards.

Just like the faulty logic, and "voodoo math," used in promoting trickle-down economics, the faulty logic used in the three ads referenced above leads them to the claim that "every man, woman, and child in America owes over $50,000 to pay off our national debt." Hogwash. It’s our nation’s debt. Our nation is responsible for paying it off. How it chooses to pay is still to be determined. However, if the Republican Party has its way, 98% of the population will have to pay more, so that the favored 2% will be able to pay less.

Similarly, the “logic” used to show how many bottles of soda my family would have to buy to pay for one year of top executive compensation is equally flawed. The respective companies are responsible for compensating their executives, not my family.

In short, no matter how many times a politician, or a news corporation - especially Fox News - presents a “simple common sense solution” (such as Congressman Paulsen’s, “Just spend less”) to a complex issue, you’re probably being lied to. 

In a complex world, there’s no such thing as a "simple solution." No single issue stands alone. Everything is intertwined with something else. Everything has a cost. For each solution, there will be "winners" and "losers." And, just as in our personal lives, to be successful, our nation's leaders must consider numerous trade-offs involved in every decision they make. They should not be allowed to abdicate their responsibilities by signing away their minds to any special interest group. No matter how powerful people such as Grover Norquist, Karl Rove, or the Hunt Brothers might seem, selling out our nation to serve them is not a good idea.

Modern-day Republicans have decided to tip the scales in favor of the very wealthy. And, despite the pain already inflicted, their plan is to continue to do more of the same, no matter what it costs our nation.

Our economy and our nation’s fiscal health will only show significant improvement when a more normal,  balanced, approach is allowed to return.

I implore patriotic Republicans: Tear up the pledges, and start leading for a change. 

DISCLAIMER: I do not directly own any shares of either of the companies named, nor do I plan to acquire any shares in the foreseeable future. I suspect, however, that one of the mutual funds I have probably owns shares of both. Unlike the companies I directly invest in, I have not researched either the Coca-Cola Company or PepsiCo to make an informed decision regarding the appropriateness of either company for my investment portfolio. If I ever decide to do so, Executive Compensation will be just one of the many variables I will consider.