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Is Capitalism working?

Cold, hard facts

Ice-Cube In researching my new book, Otherwise, I tried to figure out how people can be so divided over questions of cold, hard facts.  

The answer is not encouraging -- nothing is so persuasive as someone's pre-existing opinion.  In other words, people believe what they want to believe.  

When the late Senator Daniel Patrick Moynihan said "people are entitled to their own opinions, but not their own facts," he had it exactly backwards.  

People see, interpret, and weigh so-called "facts" through the lens of their opinions. Decades of psychology experiments have documented this phenomena.

Now a well-intentioned investigative piece by two veteran reporters -- Fortune's Allan Sloan and ProPublica's Jeff Gerth -- demonstrate it again.  

In an article somewhat ironically entitled "Setting the record straight on GE's taxes," they attempted to establish the "facts" on the widely reported story that GE paid no taxes on a $5.1 billion profit last year and, on the contrary, will get a hefty refund.

After chiding the New York Times, which originally broke the story, for misunderstanding the company's financial statements, they tried to set the record straight.

Here's the gist of what they found: GE clearly paid estimated taxes on its anticipated 2010 income, has received no refund, and will probably end up with a modest tax bill for the year.  You can read the whole story here.  

In the first four hours after their article was posted, it had attracted more than 120 comments.  The gist of the feedback ranged from "this is total BS" to "what a fluff piece." Meanwhile, an apparently little noticed sidebar that outlined GE's tax-minimization strategies in great detail attracted only 10 comments.

I have known Sloan for more than a decade -- in fact, when I led PR for AT&T, the company was the target of some of his most penetrating and vitriolic criticism.  I've only dealt with Gerth once or twice and was grateful that my company was only peripheral to his real interest on both occasions. 

These two guys are probably among the smartest, toughest, and most relentless reporters I ever dealt with. They don't do fluff. But they do understand income statements and tax law.

What they may not completely appreciate is the difficulty of explaining the facts to someone whose mind is already made up.  That's something GE's PR people have to do every day.

 

 

 

 

 

 


 

 


 

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