When I saw that James Carville had written an op-ed for The Hill entitled Why do people vote against their interests? I thought it was going to be another article along the lines of What’s The Matter With Kansas? by Thomas Franks. We have seen plenty of material on how lower income people vote against their economic interests in voting Republican. This includes people in places like Kansas, and the white working class voters across the country. The answer comes down to a combination of 1) people voting on interests beyond economics, along with 2) voters being deceived by right wing propaganda. In this article, Carville actually looked at a different group, stock market investors:
I have no earthly idea why a stock market investor would vote Republican — all you have do is look at the numbers. The numbers are staggering, breathtaking and unimaginable. How anyone with even a penny in the market would vote for their interests and choose a Republican is unexplainable.
Well, let me put this in terms for those savvy stock investors: it is like having a discussion about Apple stock versus Lehman Brothers stock.
Before we begin, I would like to be clear that I am not even going to mention the president who presided over the greatest economic boom since World War II, whose brilliant strategy was a combination of tax increases on the wealthy, family and medical leave for working families, an increase in the minimum wage and adherence to Keynesian policies. While I would love to include my friend and former client Bill Clinton’s record in this piece, it really wouldn’t be fair. I don’t like watching my Louisiana State University Tigers play Sam Houston State and I don’t think you would like to read about such a staggering disparity — it would be a blowout. So, let’s focus on President Obama and former President Reagan.
Since Obama was sworn in on Jan. 20, 2009, Standard & Poor’s 500 index has gone up approximately 115 percent, the Dow Jones industrial average has experienced a growth rate of 146 percent and, perhaps most impressively, Nasdaq has grown in size by 188 percent. Two thousand days into his presidency, the major stock indexes under Obama have had average gains of 142 percent — compare that to the record under Reagan, who saw gains at 88 percent during that same time period.
Russ Britt of MarketWatch notes, “the average stock-market gain under four post-Depression Democrats through each one’s 2,000th day in office has outpaced the average gain of the four Republicans in the era by a factor of nearly 4 to 1. Democratic gains have averaged 133%, while Republican market advances have had a mean of 33%.”
Stock market investors are not uniform in their beliefs and some might vote Republican based upon social issues, but if the affluent voters I know are any indication, economic views are by far the dominant factor in influencing the political action of most. This leads to an exclusion of the first factor I mentioned above for the majority of them but the second still holds.
Of course this does not apply to all stock market investors. An increasing number of affluent voters are backing Democrats, often due to a combination of opposition to the social positions of Republicans, their hostility to science and reason, and the recognition that the economy does do better under Democrats.
The reasons that many stock market investors continued to be fooled by Republicans can be further broken down. One problem is that while Republicans are unable to govern, they certainly play politics far better than Democrats. They have been successful in spreading misconceptions that they are more pro-markets and better for the economy, while Democrats have done a poor job of pointing out that Republican support for plutocracy is harmful to a market economy. Some have tried with cries against income inequality, but using such words is counter-productive. We will always have income inequality in the sense that some will do better than others, and this is not the real issue. The real problem is the rigging of the system Republicans to benefit the ultra-wealthy at the expense of everyone else, including most stock market investors.
The specifics of policy are also greatly exaggerated by the right wing noise machine. Many affluent voters believe that they are better off voting for Republicans because Democrats support higher tax rates as they look to maximize their wealth by every dollar possible. The reality is that the increased marginal tax rates proposed by Democrats will still leave them with historically low tax rates. Most of us will make far more money, both due to a stronger economy and increased stock market gains, than will be taxed with a few point increase in the top tax bracket.
Carville concludes by saying, “With such glaring facts and evidence, I ask stock investors to reexamine, reconsider and reinvest their confidence in the Democratic Party.” I would suggest that he first concentrate on getting Democratic candidates to do a better job at explaining the record of their party and the economic implications of their policies. I hope that he is doing this when talking with Democrats.