Following the Returns: Investor class or immigrant tide?

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."

Of course, the Bush campaign calculated that it could win immigrant support with its own brand of multiculturalism. In particular, it set out to woo the Latino vote not only by broadcasting its welcome for (relatively) open immigration but also by refusing to oppose the cultural policies associated with it-notably bilingualism. As with the Asian vote, however, the results are disappointing. Democrats won the Latino vote nationally by a clear two-to-one landslide-and by an even larger margin in California. One small but useful measure of the Bush failure here was the result of the Arizona referendum opposing bilingual education. Bush had refused to endorse this on the grounds of divisiveness; in the event, the referendum won by a two-to-one margin and ran something like 12 points ahead of his own small victory.

Paul Gigot has sought in the Wall Street Journal to portray Bush's 35 percent Latino vote as a silver lining in an otherwise cloudy prospect for the GOP. And while it is obviously better to score 35 percent than 25 percent among any group of voters, that simple calculation is overwhelmed by other figures when immigration is taken into account. After all, if the GOP can hope to gain only 35 percent of every 100 Latinos who arrive in the U.S. and subsequently on the voting register, then it will suffer a net loss of 30 votes every time 100 people come in. And if mass immigration means that 1 million people come in, then it will suffer a net loss of 300,000 votes.

If Bush adopted this support for mass immigration in order to soothe moderate white suburbanites, as some observers claim, then that calculation is not working out either. He won only 54 percent of the white vote-almost exactly the percentage of the total vote won by his father in 1988.

Further, it seems that support for immigration doesn't gain votes for Republicans even among Latinos. A Harris Interactive poll for the Federation for American Immigration Reform asked a sample of 1,000 Hispanic voters in California whether they were more or less likely to support Gore and/or Bush because of their support for more immigration. Gore increased his support by 13 percent on this issue; Bush lost a net 3 percent. In short, the GOP's base among Latinos was alienated by a policy that was adopted in order to woo them and to soothe their white neighbors.

What the GOP discovered in this election was that it is gaining a steadily smaller percentage of almost every immigrant group at the very time when these groups are increasing as a percentage of the total population. Time magazine noticed this point when it observed "a steady reduction" in the party's white Protestant base. In fact, that base is not shrinking at all; it is being overtaken by other population groups whose growth is due very largely to an immigration policy the party endorses.

It will be a long time before most new immigrants become investors and think of supporting the GOP. And when they do, their move to the right will be canceled out by the votes of new arrivals. On the basis of experience, however, this looks too alarming a prospect for the GOP to think about.