Following the Returns: Investor class or immigrant tide?

National Review, Dec 18, 2000 by Joh O'Sullivan

In recent years National Review has pioneered two of the most fruitful theories of electoral behavior: namely, those based upon the "investor class" and the "impact of immigration." The investor-class theory holds that since most Americans now own shares in American industry, they are less amenable to anticorporate rhetoric and more favorable to such policies as the reform of Social Security. If true, this theory would suggest growing Republican dominance as prosperity pushes more people into the investor class.

The impact-of-immigration theory, by contrast, predicts an increase in Democratic support, because of a growing population among the ethnic groups that tend to vote Democratic. If this remains unchecked, the Democrats will become the natural majority party sometime around 2004.

Election 2000 suggests that there is some truth in both theories, but that on present trends immigration seems more likely than investment to sway elections in the foreseeable future.

Let us look more closely at the investor class. Polls show that a voter was more likely to vote Republican than Democratic if he owned shares. The CNN exit poll, for instance, showed that 51 percent of shareholding voters supported George W. Bush, and 46 percent Al Gore. This is a clear majority, but a disappointing one. One might have expected a larger lead for the Republican against a candidate who had resorted so often to virulent anticorporate rhetoric. Still, there is the pleasant prospect for Republicans that a growing investor class will indeed swell their vote over time.

That prospect, however, must be hedged about with qualifications. As Richard Nadler has pointed out ("Portfolio Politics," nr, Dec. 4), investors do not automatically vote Republican like zombie capitalists in a Bertolt Brecht agitprop musical. Economic interest is only one of many possible reasons for voting, and not all voters spontaneously recognize their economic interests. Furthermore, even sophisticated self-identified members of the investor class might become less receptive to these GOP appeals; in fact, this recent election, taking place as it did at the summit of a bull market, was the best possible time for Republicans to appeal to the investor class. Thus, when the CNN exit poll asked voters who owned stocks if they were worried about the market, a clear pattern emerged: Bears voted heavily for Gore, and bulls equally heavily for Bush.

In a bull market, of course, bulls outnumber bears. Should the market turn down, however, as many observers expect, the bears are likely to be confirmed in their opinion and the bulls made more doubtful. In addition, as stocks fall, there will be a general drift in the investor class away from risk and towards security-a drift likely to take them in a Democratic direction. And, finally, the investors themselves might well develop hostile feelings for the party most associated with persuading them to put their money into falling stocks-as Lady Thatcher found in the late Eighties when new house-owners blamed the government for the sharp fall in the value of their principal investment. For all these reasons, the investor class may not swell the GOP vote, at least to the extent expected, in the coming years.

Let us now examine how the immigration thesis turned out. Here the evidence is very clear: The only large immigrant group (or ethnic group significantly composed of recent immigrants) that voted Republican over Democratic was Arab Americans: About 70 percent of them threw in their lot with the GOP. Since Arab Americans are a growing minority, concentrated in a few key Electoral College states and (because of differential immigration) likely to overtake Jewish Americans in numbers in about a generation, the GOP's foreign policy towards the Middle East can hardly be unaffected. Republicans would be less than political if they did not seek to reward the only immigrant group that favors them.

Of course, Republicans had been cherishing hopes that Asian Americans would be their own "model minority." Indeed, even nr's projections showing that the demographic impact of immigration would gradually produce a Democratic electoral majority overall had assumed either a continuing Republican majority among Asian Americans (my own analysis) or "near-parity" between the parties (the Peter Brimelow/Edwin Rubenstein analysis) in appealing to this group. In the event, however, Asian Americans gave a clear majority to the Democrats in the 2000 election: According to the CNN exit poll, they voted 55 percent for Gore to 41 for Bush. What makes this lopsided margin still more significant is that some Asian-American observers attribute this Democratic drift to such events as the Wen Ho Lee case. Even though it was the Clinton administration that imprisoned Lee, the heightened ethnic tensions caused by the case radicalized Asian Americans and pushed them towards the multiculturalism represented by the Democrats. In other words, immigration tends to produce an ethnically conscious fissiparous political atmosphere in which Republicans are at a permanent disadvantage as the party of the eroding American "majority."