Pundits have talked for years about how the growing trend of stock ownership will revolutionise US politics, writes Amity Shlaes.
The new investor citizen, we are told, will transcend all three of the traditional groups - Democratic voters, Republican voters, and Angry voters - and shatter the political paradigm.
Until recently, though, there hasn't been much shattering going on. The attitudes of citizens themselves have been changing - the privatisation of Social Security, America's government pension system, becomes more popular ever year. A poll by National Public Radio, the Kaiser Family Foundation and the Kennedy School of Government found 65 per cent of people favouring diverting some share of Social Security payments into new individual investment accounts.
But the positions of the party faithful have still tended to correspond to party lines. Vice President Gore has opposed privatisation, as has most of the leadership of the Democratic Party. So individual Democratic donors also oppose the "dangerous scheme" no matter how many stock options they personally have accumulated with their startups.
The same holds for the Republicans. The Grand Old Party, including Governor Bush, supports privatisation. So Republican donors, activists, and campaign workers do too, even if they themselves hold not a single share.
This week though brings a sign that the old order may finally be cracking. The occasion is the publication of a book by Wade Dokken, the 40-year-old CEO of American Skandia, a fast-growing financial services firm.*
Mr Dokken is, by his own description, a classic "FDR-Truman-Kennedy-Johnson-Humphrey-McGovern Democrat". He has a picture of Hillary Clinton in his office, and a simple but clear relationship with the party - "I write cheques". And he challenges anyone who says Democratic policy is bad for economic growth. "Look at America now," he writes, "eight years after the Clinton-Gore bus tour and 'putting people first.' Trade is up. Poverty is down. Wealth is up. Crime is down. Small business creation is up. Everything that's supposed to be down is down. Everything that's supposed to be up is up. With Democrats at the helm. So there!"
Just the sort of talk that should be good for a spot on the short list for Treasury Secretary, or at least a post advising the Gore White House on prescription drugs. Except that Mr Dokken supports Social Security privatisationviolently. Converting the old entitlement into a system of individual accounts that invest in markets is, to his mind, the most important task for America in the next century. "Forget Watergate. Forgot Monica", he writes. "If Washington doesn't move quickly and decisively to save Social Security in a way that will truly keep the promises that have been made, it will be engaging in the biggest betrayal of all".
But Mr Dokken doesn't stop there. He also laces into his party for not recognising the importance of privatisation, or as he puts, for failing to "wake up and smell the Starbucks". He's furious at Mr Gore for alleging that the Bush privatisation plan would leave the nation with "trillions of dollars of debt". And he feels that its anti-capital position will hurt the party in future: "Despite presiding over the greatest bull market in history, Al Gore and the Democratic Party are missing a golden opportunity to appeal to the dreams and the aspirations of the new investor class."
It's not hard to see why Mr Dokken feels so strongly. Social Security promises a return of less than 2% for Americans 30 or younger, and only an average of 2.2% for those who are now 50. The only way to fix it - aside from increasing already hefty payroll taxes or cutting benefits - is to allow this public programme to earn higher returns in the marketplace. Mr Dokken wants to start a new movement, the movement for what he calls equity rights.
The real question is, why aren't there more of him? Mr Dokken posits that many of his fellow Democrats suffer from "Attention Demographics Disorder" - that they simply are failing to recognise there will be too few workers to support the Baby Boom in retirement. This though seems improbable, at least when it comes to the party's bigger givers. These are, after all, people who have made their fortunes playing with numbers. The better bet is that these folks are just waiting for the party leadership to get in tune with the nation.
*"New Century, New Deal: How to Turn Your Wages into Wealth Through Social Security Choice" (Regnery)
© Copyright 2000 Financial Times
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