How do Americans view business? What about the economic crisis?
What role do they think the government should play?

In two new AEI studies, AEI scholar Karlyn Bowman analyzes the latest polls and gives us the historical context to better understand how Americans think about Wall Street, the economic crisis, TARP and the stimulus.

FOR IMMEDIATE RELEASE: May 19, 2010

With the vote on the financial reform bill looming, polls show that most Americans have little trust that Wall Street will fix the problems that caused the financial crisis. Almost as many lack trust in Congress to do so as well. How do Americans view Wall Street generally? How serious are its problems?

In two new AEI studies, public opinion expert Karlyn Bowman and her research assistant Andrew Rugg bring together a comprehensive collection of survey data about (1) public attitudes toward business and (2) attitudes about the economic crisis including TARP I and II, the auto rescue, the mortgage rescue, and the stimulus package.

These new studies differ from other surveys in that they frame the attitudes of Americans toward business during the financial crisis in a historical context. These studies also shed light on how Americans view the proper role of government in regulating business. Among the highlights:

Attitudes on Business:

• People have long been ambivalent about government regulation, believing on the one hand that it is necessary and yet, on the other hand, that it frequently does more harm than good. While there does not appear to be more support for 'regulation of business in general' now, today there is more support than opposition for 'somewhat greater financial regulation.'

• Even with the financial crisis, more people see big government as the biggest threat to the country in the future (55% government) than big business (32% business). The number of people who see big business as the greatest threat, however, is at the highest point since the question was first asked in 1954. (Gallup)

• People are well-disposed toward free enterprise (86%), entrepreneurs (84%), and capitalism (61%). Big business (49%), the federal government (46%), and socialism (36%) fare less well. (Gallup)

• Positive confidence in business took a hit in 2008, although it has never been high. In Harris polling, in 2008, only 11% said they had a 'great deal of confidence' in the people in charge of running major companies and 35% had 'hardly any confidence.' There has been slight recovery in 2010 (15% 'great deal of confidence' versus 27% 'hardly any').

• Solid majorities still believe that the strength of this country today is mostly based on the success of American business (76%). (Pew)

Attitudes on Wall Street:

• The public favors stricter regulation of Wall Street, though support for greater regulation appears to be down from earlier points during the financial crisis. In a March 2010 CBS News/New York Times poll, 56% (down from 71% in April 2009) favored increased government regulation of banks and financial institutions. In a March 2010 CNN/ORC poll, 54% favored increased regulation.

• In the positive economic times of the late 1990s, a bare majority said people on Wall Street deserved to make the kind of money they earned. Today, only 29% agree. (Harris)

Attitudes about the Economic Crisis--TARP, the Auto Bailout, and the Stimulus:

• While initially supportive of TARP, public opinion turned against it very quickly and, in almost all polls, the public opposed releasing the second half of the TARP money. In February 2009, a CNN/ORC poll showed that 62% thought that the second half of the money should not be released to banks and other financial institutions.

• In most polls, solid majorities opposed aid to the auto companies. A December 2008 Gallup poll showed that 51% were opposed, while 43% were in favor of financial assistance to the big three automakers.

• Americans initially supported the stimulus, but once again, opinion turned against it very quickly. In February 2009, a CNN/Opinion Research Corporation poll showed a majority of 60% favored the economic stimulus bill. In January 2010, 42% favored it.

• Most polls show that Americans thought the stimulus package was too large and wasted much of its money. In a January 2010 CNN/ORC poll, 21% said nearly all the money was wasted, 24% said most, 29% said about half, and 25% said little or none.

• Banks, large businesses, and the Bush administration receive much more blame for the crisis than President Obama. In a March 2009 ABC News/Washington Post poll, 56% said banks deserve a great deal of blame, 47% said the Bush administration, and 57% said large business corporations. Only 13% said Obama.

• Individuals did not believe that these government programs would make their economic situation better: in an October 2008 Fox/Opinion Dynamics question, 47% said that the financial rescue package would make no difference to their family's financial situation, 16% said it would help their family's situation, and 28% said it would hurt. In February 2009, 54% said the stimulus bill would not make a difference in their financial situation, 24% said it would help their economic situation, and 19% said it would hurt.

• The overall impression from this AEI Public Opinion Study is that as Congress passed new initiatives during the economic crisis, Americans' historic skepticism of government action in the economy reached new levels.

AEI resident fellow Karlyn Bowman is available for interviews. She can be reached at (202) 862-5910 or kbowman@aei.org (assistant (202) 862-5917--andrew.rugg@aei.org).

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