Researchers Karlyn Bowman and Andrew Rugg at the American Enterprise Institute (AEI*) have published an important paper that delves into the nature of Americans’ distrust of Wall Street.
“Five Years After the Crash: What Americans Think about Wall Street, Banks, Business and Free Enterprise,” also illustrates that Americans clearly distinguish “Wall Street” from “business” and “free enterprise.”
While Bowman and Rugg note that negative American views of Wall Street are not new, what is new is that these negative views were magnified by the financial crisis and have become “deep-seated.” The findings of a survey that Harris Interactive has conducted for the past 23 years is particularly compelling. In 2007, the authors report, “30% had very little or no confidence in the financial industry. By January 2009, that number had doubled to 60%.” In 2012, 51% still had “little or no” confidence, and only 9% had a “great deal” or “quite a lot” of confidence in the industry
Distrust of Wall Street
The authors are troubled by several other findings from the Harris 2012 poll. Only 28% agreed that “people on Wall Street are as honest and moral as other people” while 70% agreed that “most people on Wall Street would be willing to break the law if they believed they could make a lot of money and get away with it.”
The Harris findings are corroborated in other polls. The American Values survey conducted by The Atlantic and the Aspen Institute found that only 17% of Americans believed that “executives at large Wall Street banks share the same fundamental set of values as other Americans.” An October 2011 CNN poll found only 3% trusted Wall Street bankers and brokers “a great deal” to do what is best for the economy; 54% trusted them “not at all.”
Bowman and Rugg conclude, “Americans see Wall Street as a culture apart, one that operates by a foreign code of conduct.”
In contrast, Americans’ views of “business” are mixed. While the authors note “small business” typically gets high ratings, views of “big business” tend to be weighted down by the public’s “innate skepticism of big, powerful institutions.” Yet these views are also modulated by the ups and downs of the economy. As the authors note, in 2013, “Feelings towards corporations are “warming” as the economy has improved.”
Another factor that contributes to a “mixed” view of big business, a point not mentioned in this paper, is the industry itself. In a Harris Interactive February 2013 survey that measured the reputations of the “60 most visible companies,” the consumer technology companies, Amazon, Apple and Google, actually rated quite high, at “excellent,” and occupy three of the top four positions, while financial institutions rated quite low, Wells Fargo, JPMorgan, Citigroup, Bank of America and Goldman Sachs occupy, respectively, positions 52, 53, 55, 56, and 59, all rated “poor,” “very poor,” or “critical.”)
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