Ethics Newsline®

“Six in 10 Oppose Wall Street Bailouts,” Poll Finds

Apr 7th, 2008 • Posted in: Research Report

“But majority of Americans support the government helping people stay in their homes,” Gallup says

From Gallup:

“A new Gallup Poll, conducted March 24-27, shows that 6 in 10 Americans oppose the federal government taking steps to help prevent major Wall Street investment companies from failing.

“On March 13, Bear Stearns told the Federal Reserve it would file for bankruptcy the next day and as a result, the Fed voted on March 14 to extend the investment company emergency credit to keep it from failing. On Sunday, March 16, the Fed, with the support of the U.S. Treasury, extended a $29 billion loan against Bear Stearns assets to facilitate its merger with JP Morgan.

“On Wednesday, Fed Chairman Ben Bernanke defended this highly unusual emergency action by stating, ‘Given the current exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain.’…

“While the Fed’s effort to maintain financial stability is clearly justified when viewed in economic terms, it is opposed by a surprisingly uniform 6 in 10 Americans across a wide variety of demographic groups: men (61%) and women (60%); those in the East (55%), Midwest (60%), South (64%), and West (62%); those with annual incomes of less than $35,000 (61%), of $35,000 to $74,999 (59%), and of $75,000 or more (62%); and even those affiliated with political parties (or with no party): Republicans (61%), independents (64%), and Democrats (57%).

“In sharp contrast to their opposition to helping Wall Street investment companies, Americans — by a margin of 56% to 42% — support having the federal government take steps to help prevent people from losing their homes because they can’t pay their mortgages….

“While federal officials, the president, and the Congress may act against public opinion to preserve global financial stability, it seems hard to believe they will not also respond to help American homeowners. In fact, swooping in to rescue struggling homeowners could be crucial in offsetting consumer resentment toward the Fed over its Wall Street bailout….”