Wednesday, March 02, 2005

Does "the Investor Class" Mean Anything?

In the course of his piece on Eliot Spitzer, whom he correctly calls an "empty vessel," Matthew Continetti raises the question of the descriptive power of the trope "investor class" recently prevalent in the pundit and political world. More specifically, Continetti doubts the thesis that more Americans owning stocks is necessarily a good thing for the GOP.

Continetti's article and the whole debate surrounding this thesis are summarized in two long and interesting posts at the American Scene (here and here).

For whatever it's worth, my last 5+ years in the financial services industry (most of it spent dealing directly with investors at all levels of wealth) tell me that Continetti's correct. Wealth (moderate or significant) is simply not an indicator of party affiliation anymore. In fact, to the extent that higher education and advanced degrees are an indication of or precursor to wealth, my experience tells me that the GOP is flat-out losing the rich or, more precisely, the highly educated. The highly educated (if you want to call what goes on in the most prestigious universities education) -- and that often means the rich -- are more inclined to be Democrats than Republicans. East-coast blue-bloods or "Rockefeller Republicans", as they used to be called, started to die out probably when George H.W. Bush left Greenwich for Midland, and they probably became extinct when George H.W. Bush lost his bid for reelection to Bill Clinton in 1992.

It's hard for me to know what this means for the GOP in the long run, but I think Continetti's correct when he argues that "[t]he theory of the investor class. . . .is long on assertion and supposition but short on evidence."


Blogger TM Lutas said...

I think it's largely going to be a self-fulfilling prophecy. Republicans believe it and fight for the expansion of the investor class. Democrats believe it and will fight against it. Since expanding the investor class is better for the country, over time, the investors will tilt toward the party that supports them. A practical example can be seen in Microsoft.

The Republican party is the party hostile to classic anti-trust law and the Democrat party embraces it. Microsoft, as they have been hit with anti-trust actions, have changed their political donation behavior from being a very Democrat friendly donation environment and become more friendly with the GOP. Donations do follow self-interest.

Unless Democrats go through a real sea change, their investor class presence will erode over the decades to the level of their military member presence, small and shrinking. Democrats, especially the bunch are pretty hostile to the interests of investors. That's going to hurt as the investor class rises.

4:30 PM  

Post a Comment

<< Home