Political pundits have argued that owning financial assets induces households to support business-friendly political parties. This column analyses how ownership of liberty bonds – mass marketed to US households during WWI – affected voting behaviour in the 1920s. Voters responded to fluctuations in the value of the bonds by punishing incumbents when their value fell, and rewarding them when bond values recovered. Although liberty bonds contributed significantly to Republican margins in the 1920s, they don’t appear to have been decisive.
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