Both Democrats and Republicans appear to be stumbling over one another in their efforts to establish supremacy on the issue of regulating financial institutions, big banks, and/or Wall Street. For his part, President Obama said in his Saturday radio address: "We will hold Wall Street accountable. We will protect and empower consumers in our financial system. That’s what reform is all about."
Both parties’ leaders appear to assume that the public is all in favor of anything relating to putting it to these big financial institutions.
One fundamental fact supports this assumption. Americans are not in the least sympathetic to anything big, including, in particular, big banks, etc.
Case in point. Take a look at this graph. A pretty graphic illustration of the depths to which banks have fallen in the public’s esteem.
Still, based on a review of existing data, we do not find as much of a massive majority in favor of new regulations on banks and Wall Street as party leaders may have assumed.
Here’s a sample result from a CNN/Opinion Research poll in March: 53% favor “regulation that would increase federal regulation over banks, Wall Street investors, and other financial institutions.” A Pew poll from early February shows a little higher 59% say it is a good idea for “the government to more strictly regulate the way major financial companies do business.”
Clearly public opinion tilts in favor of increased regulation rather than the opposite. But these are not huge majorities. In the CNN poll, for example, a not insignificant 43% opposed increased regulation.
I would recommend that you check in with us Tuesday morning. We will have new data on the public’s current reaction to financial regulation. This will include an interesting test of negative connotations of the two words "Wall Street." It may be that the publicity surrounding the currently pending regulation legislation will have changed some minds.
To this point, the main complaint Republicans appear to have with the pending legislation is that it will not be harsh enough and will “bailout” financial/Wall Street institutions.
Paul Krugman of The New York Times opines that Republican leaders' verbal talking point emphasis on "bailouts" is a result of recommendations from pundit and consultant Frank Luntz. Presumably Luntz or someone else decided that the "bailout" emphasis would play well in terms of activating distrust among the American public for a financial regulation bill. Luntz's memo, in fact, instructs those opposed to financial reform legislation to use the nicely alliterative phrase "big bank bailout bill" in framing their opposition.
There isn't a lot of current data dealing directly with the concept of a "bailout."
An ABC news poll in late February/early March found a split public in response to a complicated question juxtaposing a positive explanation for "banks and other financial institutions" taking government loans to avoid bankruptcy (". . . because returning the banks to profitability will help the broader economy in the long run . . .") against a negative take (". . . it's unfair that the banks benefited from the bailout while many Americans still are struggling.") Not much strong support for the anti-bailout position there.
On the other hand, a CBS News poll in January found that Americans overwhelmingly thought that investors/Wall Street benefited from the bailout of banks and financial institutions rather than homeowners and people throughout the country.
In general, the current battle over financial reform pits concerns over big banks' malfeasance against concerns over big government. As much as Americans may be negative on big financial institutions and big banks, they are also negative on big government. So there may be some room for push back here as Americans ponder the implications of big government moving to a bigger footprint in its effort to regulate big financial institutions.
In January our Gallup poll found that twice as many Americans thought that the federal government should become less involved in regulating and controlling business as thought they should become more involved. This question did not ask about financial institutions per se, but gives an indication of the concern Americans have about big government. This is just one of many examples of Americans' current concerns about big government.
Speaking of the economy, we have more evidence in our recent April 8-11 poll of the totally different ways that Republicans and Democrats look at the economic world. At issue here is the question in which we ask Americans how much confidence they have in seven different people/groups of people relating to the economy.
Well, Republicans have the most trust in Republican leaders, business leaders, and Tea Party Movement leaders. Less than half have trust in Obama, Secretary of the Treasury Timothy Geitner, Federal Chair Ben Bernanke, or Democratic leaders.
On the other hand, Democrats have the most confidence in this latter group of four, modest confidence in business leaders, and little confidence in Tea Party movement leaders or Republican leaders.
A surprise to me is how well business leaders do on this dimension. This is the first year we have included them and, by one way of reckoning, they have as much trust as Obama.
Note that this question did not specify “big” or “small” business leaders. My colleague Jeff Jones has a more detailed analysis of these data at gallup.com.