A Tuesday Wall Street Journal editorial reported results of the annual Gallup Poll on the public’s “views of various industries.” The Journal concluded, “The public mood isn’t especially buoyant… though there is one notable exception: American business … most (industries) continue to have positive and durable reputations,” including banking and finance.
The WSJ’s cheery conclusion about American business is understandable, merited and important. It also misses a larger opportunity to challenge finance and banking to luxuriate in Gallup’s findings.
The Journal editorial notes Gallup surveyed Americans “across 25 areas” and found that all businesses/industries polled more positively than did the federal government. Correct. Combining favorable and unfavorable ratings for each industry, Gallup compared “net favorable / unfavorable ratings.”
On top was the restaurant and computer industry at 59% and 53%. At the bottom of industry ratings, healthcare and pharmaceuticals sit at minus 20% and 23%, respectively. Below this industry bottom, the WSJ correctly notes, with relish, is the federal government. The unfavorable rating of the federal government: minus 27%. As the Journal correctly concludes, “The worst performer in the Gallup survey? None other than the federal government…”
The Journal fairly notes that the local restaurant or grocery store or superstars of new economy, “the computer industry” far and away outperform the federal government in “trust.” But this is where a fair analysis pretty much stops.
There is no accounting for the wide variances among different industries’ net “positive” ratings. The Journal explains the five “net negative” industry ratings of oil and gas, legal, healthcare, pharmaceuticals and the federal government. It has no explanation of the significance of the wide range among industries’ net positive ratings. The enormous range is effectively overlooked.
Case in point. The computer industry, the second highest-ranked industry noted above, fairly wins Gallup’s silver medal with a net positive rating of 53%. Then the Journal effectively comes up with new rules to get banking on the Gallup medal podium. It creates a group of ten industries the Journal says have, “Images that are solid or near neutral,” and essentially awards them its bronze medal.
Even though banking sits at the very bottom of this group, seventeen places behind the second place computer industry in Gallup’s report, (and tied with advertising and PR in the 19th place), with a net positive rating of just 2%, it brings home a medal.
Is this 19th place Gallup showing of banking deserved? Other opinion research suggests so.
Consumer confidence in finance, banking, financial services or stock brokers, including The Wall Street Journal’s own research, indicates that investor distrust from the financial crisis persists eight years later.
The WSJ surveys of consumer confidence in “the financial industry” from 2008 to 2014 report a tiny uptick from a very low positive rating, 10% to 13%. Meanwhile, Gallup surveys of stock brokers from 2008 to 2015 report virtual stagnation, from 12% to 13%. In a 2014 Harris survey, 50% of respondents reported they had “less” trust in “Banks” relative to “the past few years” and 9% said they had “more” trust. In 2012, the Atlantic / Aspen survey asked if executives of large Wall Street banks “share the same fundamental values” or have a “a different set of values.” By 79% to 17% consumers said Wall Street executives have different values.
No doubt banking, finance and stock brokers often get bum raps that hurt their reputations. The problem, though, is when leading voices in finance attribute any reputational problems they have to a few bum raps and then appear to believe that all criticism is essentially unfair or “without merit”. Resentment of any criticism can become the norm. Any chance to overlook weaknesses, booster industry morale, criticize the critics or exaggerate positives is grabbed.
The Journal takeaway, “Americans are more invested in the resilient private economy than in their public leaders.” This is true and important. But it blows a huge opportunity to reinforce a more fundamental takeaway from the Gallup report.
What if the Journal instead concluded by asking finance leaders, “How can banking continue its indispensable role ‘investing in the resilient private economy?y’ when it sits alongside “Madmen” in public confidence, while its newest competitor is nestled in the Silicon Valley halo 3000 miles and 51 percentage points away?