In June 2007, the Foundation funded a project on citizen investors and American inequality by Wendy Rahn (University of Minnesota). With her original award, Rahn proposed to write a book on how the rapid expansion of the “investor class” has affected American politics. She argued that increased stock market participation has unique and politically significant implications: even small stock holdings may have the potential to transform people’s beliefs about their fundamental political interests, and therefore may help explain the lack of political response to rising inequality in the United States, as well as increasing political polarization. To date, her research has borne out many of these hypotheses.
Rahn’s original project was intended to tell the story of citizen investors up to the year 2006. However, the drastic changes in the U.S. economy and the financial markets in the past few years have made it clear that a project on the political effects of citizen investors would be painfully out of date unless it took account of the Great Recession. With this supplemental award, Rahn will now be able to continue her project by analyzing more current data and extending the timeline of the book’s coverage through 2010. These new projects will allow her to analyze the political reaction to the economic crisis and whether it has altered the place of the stock market in the American public’s imagination.
Rahn’s first new project will analyze Congressional votes for or against TARP (Troubled Asset Relief Plan) according to representatives’ electoral vulnerability, their personal stock holdings, and their receipt of campaign donations from banks. In the second project, Rahn will analyze data from the March 2010 Pew Financial Reform Project survey in order to understand who people hold responsible for the financial crisis and if this impacts voting preferences. She will also examine whether this differs between investors and non-investors, and whether stock ownership shapes preferences for government regulatory action. Finally, Rahn will extend her original study through use of 2006 and 2008 National Election Studies pilot data and the Survey of Consumer Attitudes from late 2010, which will allow her to compare survey responses during and after the Great Recession to those in the 2004 NES regarding voter preference, ideology, and stock ownership.