Shareholders of the World Unite!(Brief Article)

Keep your eye on a financial trend that Will eventually be a political one. The United States is becoming a nation of investors, and people with money in the stock market are likely to change their outlook about important political matters like taxes, regulation, trade, property rights, and labor relations.

Last year about one in four households owned individual stocks. Polls place the proportion of households owning stock through any means at around half. An Investor's Business Daily survey found 49 percent of households had stock investments of $10,000 or more.

For political purposes, the most exciting findings of recent surveys are (1) the fastest-growing groups of new investors are young people and lower-middle-income families; (2) investors are more apt to be voters than non-investors; and (3) investors lean Republican.

A study by the Joint Economic Committee of Congress reported that from 1989-98 the proportion of families with incomes from $25,000 to $50,000 who owned stock rose from 32 percent to 53 percent. Among families with a household head under 35, the proportion went from 22 percent to 41 percent; for families with a household head aged 35 to 44, from 39 percent to 57 percent.

Several studies find investors are voters. And in the 2000 vote, investors chose George W. Bush over Al Gore by 51 percent to 47 percent, while among non-investors, Gore led Bush, 52 percent to 45 percent, according to exit polls.

But what is the political issue when it comes to stocks? Certainly, stockholders want lower taxes, especially on capital gains, dividends, and estates. Broad stock ownership may have been one reason Bill Clinton didn't veto the 1997 capital gains cut. It was hard to call it a break for fat cats when half of Americans own stock.

More important to corporations are such things as overzealous environmental regulation and government intervention in general. Many of these issues are specific to individual firms, but so far investors show no inclination to exert political influence. Nor have firms asked them to.