The War's Fallout: Investors Emerge As New Force In American Politics.(ISSUES & INSIGHTS)(VIEWPOINT)

Byline: JOHN HOOD

Shortly after the forces of Islamic totalitarianism declared war on the U.S., former Clinton adviser Dick Morris predicted the "end of politics" (consciously paraphrasing the title of the famous Francis Fukuyama book, "The End of History") as the national emergency submerged the old political divisions and passions into a unified national resolve.

He was wrong. Partisan and ideological cleavage has already reappeared on a number of issues, including fiscal stimulus, immigration, privacy and the aims of the war.

Other observers suggest that America is returning to a quasi-Cold War politics as lawmakers and candidates square off into camps more or less hawkish toward the Islamic totalitarians.

This seems more likely, and yet it ignores another critical event in recent weeks: the full-fledged arrival of a new Investor Politics for the 21st century.

George Bush and Al Gore recognized the importance of the investor class during the 2000 election. Bush's plan for broad tax reductions and Social Security reform edged out Gore's smaller package of narrow tax credits for human capital formation (education) and physical capital formation (schools and other infrastructure).

Among the half of Americans who own stock, Bush's victory was surprisingly narrow because of Gore's effective play for those voters.