The prevailing attitude amongst the most partisan respondents is that the other party’s policies “are so misguided that they threaten the nation’s well-being.”
The partisan political divide is “deeper and more extensive” than at any point in the last two decades, according to a new Pew Research study. How does that impact investors?
Pew’s survey of 10,000 adults nationwide finds that these partisan divisions are most pronounced among those who are the most engaged and active in the political process. In a midterm election year, it does not seem like these tensions will abate soon.
The political climate and government gridlock are a very real concern among Affluent investors, according to 2014 Spectrem’s Millionaire Corner wealth level studies. Investors with a net worth of at least $1 million express more concern about the political environment (84 percent) than they do the prolonged economic downturn (80 percent), the national debt (76 percent) and stock market performance (69 percent). They are equally concerned about government gridlock, the perception that President Barack Obama’s administration and members of Congress cannot or will not work together to solve the nation’s economic problems.
Concern about the political environment is even higher among high net worth investors with a net worth between $5 million and $24.9 million (88 percent). The concern is highest among the wealthiest of these households with a net worth between $15 million and $24.9 million (90 percent). Among non-Millionaires with a net worth of at least $100,000, 79 percent are concerned about the political environment and even more (81 percent) about government gridlock.
The rise of ideological uniformity has become more pronounced among those who are the most politically active, the Pew report states. Almost four-in-ten (38 percent) politically engaged Democrats are consistent liberals, up from 8 percent 20 years ago. One-third of Republicans express consistently conservative views, up from 23 percent in 1994.
Affluent investors take it very seriously when partisan politics finds both parties at odds and embroiled in gridlock. In December 2012 for example, when an agreement that averted the Fiscal Cliff went down to the deadline, 26 percent of Affluent respondents cited the political climate as the most serious threat to achieving their financial goals vs, 21 percent who cited the economy and 19 percent who cited market conditions. A month prior, when the debate over the fiscal cliff was especially fraught, 48 percent said that the political climate was the primary factor affecting their investment plans.
Affluent investors have in recent years expressed scant hope that the branches of government can work together on issues of economic import. In 2011, when President Obama announced his $450 billion jobs creation plan, even among those who believed the plan would be successful, only 8 percent believed the administration and Congress would work together on jobs creation. Among the majority surveyed who did not think the plan would work, nearly three-fourths saw little chance of bipartisan cooperation.
The opportunities for “hands across the aisle” seem to be increasingly diminishing, the Pew survey finds. In each party, the share with a highly negative view of the opposing party has more than doubled since 1994. The prevailing attitude amongst the most partisan respondents is that the other party’s policies “are so misguided that they threaten the nation’s well-being.”
And while most centrist Americans think that the president and the opposition should simply meet each other halfway in tackling issues facing America, those who identify themselves as either liberal or conservative define the optimal political outcome as one in which their side gets more of what it wants.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.