Oct 28, 2009

Americans Frustrated with Wall Street Bonuses;

Many Call For Increased Government Involvement

By Seth Brohinsky and Mark Schulman, Abt SRBI

The outsize bonuses being awarded by a number of Wall Street firms bailed out by the government have drawn the ire of many Americans, according the latest Time Poll.

• Almost two thirds (63%) say Wall Street executive pay is completely out of line with what they do.
• More than seven in ten (71%) favor federal government limits on salaries and other changes in compensation for top Wall Street executives.

Most Americans (67%) dismissed arguments from Wall Street that the pay cuts would hinder their ability to retain and attract "the most talented employees these companies need to recover and pay back the billions of dollars they owe" the government. Only 26% agreed.

Fear Repeat Because of Lessons Not Learned

Three quarters (75%) of the public fears that Wall Street has not learned from their mistakes of the past and things will simply return to business as usual.

• Less than two in ten (18%) think Wall Street has learned lessons and will change the way they do business.

This sentiment is spread across the political spectrum:

• 75% of Republicans report being concerned
• 83% of Independents report being concerned
• 71% of Democrats report being concerned

Moreover, most Americans (85%) remain very (44%) or somewhat (41%) concerned that the country could suffer another financial crisis in the next few years as a result of Wall Street taking excessive risks.

Too Much Wall Street Influence

Nearly six in ten (58%) feel that Wall Street has had too much influence over the government's recovery policies.

• Only about 21% believe Wall Street has had about the right amount of influence.
• 62% feel the government needs to do more to help regular people.
• 59% believe there should be more government regulation of Wall Street.

Bailout Still Considered Wrong, But Mixed Message on Results

A majority (55%) believe that the federal government's bailout of the major financial institutions was the 'wrong thing' to do. Partisan differences emerge:

• Seven in ten (71%) Republicans and 64% of Independents agree that the bailout was the 'wrong thing' to do.
• However, nearly six in ten (58%) Democrats say the bailout was the 'right thing' to do.

However, over half (54% - 40%) say that they would personally have suffered if these banks had failed. By contrast, only a scant two in ten (22%) believe that recovery policies have helped people like them.

• More Democrats (30%) than Republicans (17%) or Independents (17%) say the recovery policies have helped people like them.

Economic Outlook A Bit Rosier than Current

Fueling this discontent, most Americans (94%) rate economic conditions in the country as only fair (39%) or poor (55%). However, few see continued economic slippage. Many Americans believe that the economy will either rebound in the next year (43%) or that it will remain the same (42%).

• Only 13% predict a worsening economy in the next year.

News Not All Bad for Wall Street

Although many Americans support federal limits on executive compensation, public is split on imposing a special federal tax on executive bonuses - 49% support the proposal, while 45% oppose it.

A majority of Americans (57%) do not think the government should have the power to break up banks and financial companies it believes are "too big to fail."

Failing Marks for All on Avoiding Another Crisis

Americans have become increasingly skeptical of both the government and private sector's ability to take steps to avoid another financial crisis. While President Obama receives the highest marks, a majority (54%) still feel he has done an 'only fair' (29%) or 'poor' (26%) job in taking steps to avoid another financial crisis.

Everyone else receives failing remarks, including the American people (62% negative scores of fair/poor), Democrats in Congress (73%), Republicans in Congress (82%) and Wall Street banks (88%)