Study: Why the Investor Class Annoys Democrats

Here's another bit of research that shows why joining the investor class makes it more likely you vote Republican and why Democrats need to reverse the trend. Two economists at the Federal Reserve Bank of Dallas, John Duca and Jason Saving, looked at the linkage between Republican vote share in the House and stock mutual fund costs. (Fund costs have dropped as stock ownership rates have risen in recent decades.)

The economists found that "higher stock ownership rates are linked to an upward shift in the Republican share of the House popular vote since the late 1980s, consistent with theories that property interests affect voting. Findings suggest that the major parties' shares of the House popular vote will fluctuate around 50 percent until other factors trigger a political realignment."

Me: Again, this study points to the political rationale for Democrats' imposing higher capital gains taxes, preventing the personalization/privatization of Social Security, and taxing retirement vehicles like 401(k) plans. I mean, switching folks out of their 401(k) or IRA plans and into a low-yielding but "safe" government plan might well be a factor that could trigger a major political shift.