America Hates Congress More Than Wall Street

At least, that's what a new Bloomberg poll (.pdf) says. Interestingly, the article accompanying the poll focuses on American's hatred of Wall Street, even though Congress, corporate executives and insurance companies all scored less favorably than Wall Street. The broader poll has some interesting political consequences, particularly for financial reform.

First, I put the full results of what I was referring to above in a chart:

As you can see Congress gets the most unfavorable response at 67%, while small business lies at the other end of the spectrum with an impressive 79% of Americans approving. I am kind of surprised that only a little over half of respondents had unfavorable views of Wall Street and banks. I also wouldn't have expected the Federal Reserve to fare so well -- only 31% had an unfavorable opinion. It looks like the public relations campaign the central bank began last year worked pretty well, as a Gallup poll in July showed only 30% thought it was doing a good job then. Now, 42% approved of the Fed according to this poll.

Consequences for Financial Regulation

Let's go back to Wall Street for a moment. Even though only 57% had an unfavorable view, just 2% had a very favorable view. So while it doesn't appear that a huge majority of Americans dislike Wall Street, very few love it. Banks didn't fare much better. So does this indicate Americans want financial reform? Luckily, Bloomberg asked a few more questions to clarify matters. Here are those results (click on it for larger version):

Let's start with the last two questions above. A tiny 18% portion thinks that the White House has done enough to address the financial crisis. Only 12% believe banks have responded adequately. If that's not a mandate for financial reform, I'm not sure what is.

With that said, I found the first statistic in the chart above a little shocking. Only 24% appear to be in favor of a new, independent consumer financial protection agency (CFPA). Most respondents would prefer existing regulators are enhanced instead. Since the creation of a CFPA is the most controversial portion of the financial reform proposals floating around Congress right now, it looks like Republicans have little political reason to compromise on creating a new, independent CFPA. Doing so appears even less popular than health care reform, which they fought as intensely as possible.

In a separate poll question (not shown), Bloomberg asked whether individuals from Wall Street banks who helped caused the crisis should be punished by the government through "limiting their compensation or banning them from working in the industry." Fifty-six percent thought so. The same proportion separately said that big financial companies "enrich themselves at the expense of ordinary people and have a negative impact on the economy." A majority of Americans want to see change in the financial industry.

From this, I think it's clear that financial reform would prove politically popular, but that doesn't mean any reform would please Americans. In particular, a new, independent CFPA isn't what most people want.

Taxes

The poll also asked about taxes. It presented a number of different taxing options for the future and asked people which they thought should be considered or taken off the table. The least popular? Raising the tax rate on the middle class by 2%. Only 34% of respondents wanted that considered. The most popular was to remove the cap on Social Security taxes so those with incomes above $107,000 will pay more. Seventy-eight percent want that option considered. As you might expect, anything involving taxing the rich was fairly popular, while any option where the middle class or elderly would feel the tax did poorly.

Spending

There was one poll question that stood out as having the grimmest consequences for the economic recovery. Only 2% of respondents said that they planned to spend more in the next couple of months. That would indicate that any increased spending we've seen recently should quickly plateau. Virtually no one has plans to increase their spending soon. In fact, 28% said they will spend even less. These results indicate that the recovery will be a slow one.