|
Are you the kingmaker of 2004?
I'm talking about the presidential race, and the notion that America's investors, including you and me, have become so numerous and so concerned about our investments that we constitute a new "investor class" that could hold the key to who becomes the next president. If that theory is right, it's extremely important because it forces both parties into a race to see who can cook up new ways to attract this new voting bloc. It would be a decidedly new way of thinking for them.
Powerful analysts on both sides of this theory were guests on our Jan. 30 program. John Zogby, who runs a polling firm bearing his surname, says he has found the new investor class in his public opinion surveys. About two-thirds of respondents consistently report they have some kind of stock investments. That means we've come a long way from the days when only an affluent few held stocks. With the wide spread of 401(k)s and IRAs, stock ownership has become a mass phenomenon -- and we're not even talking about the many more people exposed to the market's performance through pension funds and the like.
Most important for politicoes, Zogby has found evidence that stock ownership significantly alters the way people vote. For example, members of labor unions, traditionally backers of Democrats, were far more likely to vote Republican if they owned stocks. Ditto for low-income voters.
That's extremely important right now because we're in a period when voters are split almost exactly evenly between the two major parties. As Zogby and many others have pointed out, in the 2000 presidential race the two major candidates each got 48 percent of the vote. Among those who voted in senatorial contests, the split was also 48-48. Among those who voted for congressional representatives, it was again 48-48. In an environment like that, any issue that moves the needle demands close attention. That's why Zogby says the investor class could be the tie-breaker in 2004.
The most outspoken opponent of this theory is Ruy Teixeira, a political analyst at the Century Foundation, a Washington think tank. His view: The whole concept of the investor class is bunk. It's certainly true, he allows, that a huge number of Americans now own stocks. That's the problem: American investors are now such a vast group, so varied in so many ways, that thinking of them as any kind of coherent class is pointless. Bill Gates is an investor. So is the young factory worker with $5,000 in her 401(k), and so are the millions in between. Can we really think of them as having common investment-related concerns, and suppose that they'll respond in the same way politically?
Like Zogby, Teixeira supports his view with polling data. For example, look at voters with $50,000 annual income and a 401(k) worth $15,000. Such voters would be members of Zogby's investor class, and they favored Bush in the 2000 election. But look at voters with the same $50,000 income -- but no investments, and thus not members of the invesor class -- and guess what? They favored Bush by the same margin. Looks like there's no investor class worth worrying about.
It must be noted that Teixeira might be dismissive of the investor class hypothesis because he's got a competing hypothesis of his own, namely that fast-rising numbers of Hispanic and Asian immigrants, plus creative professionals he calls the idea class, will soon make the Democrats the dominant party nationally for years to come.
It's entirely possible, of course, that both views have merit. I think they do. Specifically, I can't dismiss the investor class hypothesis because in truth even Teixeira's evidence seems to support it. He found that in 2000, investors voted for Bush while non-investors voted for Gore. More important, he found that even when you adjust for the fact that investors tend to have higher incomes than non-investors, and are therefore more likely to vote Republican, some of the investor-class effect remains. The effect is small, but on a number of other issues he also found small differences reflecting a possible investor-class effect. He tends to minimize these differences as meaningless, but in today's political environment, a difference of a percentage point or two can make all the difference.
I like the investor class hypothesis for another reason as well. Registered Democrats far outnumber registered Republicans, yet as we've seen, voting is split right down the middle. For some reason, a lot of people who call themselves Democrats must be voting for Republicans. Why? In an age when voters are overwhelmingly concerned about the economy, it seems to me Zogby offers a plausible explanation: At least some are voting for candidates they think will create an economic climate that's good for their investments.
The coming nine months will be an excellent test of the investor class hypothesis. The White House clearly buys it: Just recall last year's tax cut on dividends. How vigorously Bush pursues investors, and how the Democratic nominee responds, will be critical elements in the campaign. We'll be following them, on your behalf, right up to election day.
|
