Stock Ownership, Political Beliefs, and Party Identification from the "Ownership Society" to the Financial Meltdown

In this paper we investigate the link between stock ownership, political beliefs, and party identification. Stock ownership significantly increased the likelihood of voters identifying with the Republican Party between 2000 and 2004 – a period when that party offered tax cuts and proposed an overhaul of Social Security which directly appealed to shareholders. Yet in the period leading up to the 2008 election, the financial crisis cast doubt on the idea that a Republican administration would best represent stockholder interests. We find that while there was a small backlash, stockholders largely remained committed to the party in high numbers. But these effects vary depending on the ideological orientation of stockholders: In 2004, those stockowners with the most ideologically conflicted views were most receptive to recruitment by the Republican Party, and stock ownership continued to increase Republicanism among those in 2008 who were more ideologically liberal on economic issues. These results suggest that party identification may be less about pure economic interests than about identity, especially for those whose ideological beliefs do not map cleanly onto the liberal/conservative continuum, and that psychological mechanisms such as cognitive dissonance and identity conflict are important drivers of political behavior.