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Americans reluctant to bail out Wall Street

Most of those surveyed say it's not the government's job, but some agree that it may be necessary.

September 24, 2008|Doyle McManus | Times Staff Writer

WASHINGTON — Most Americans don't believe the government has responsibility for bailing out financial firms with taxpayer money, a core part of the rescue plan Congress is considering to halt the near-meltdown of the nation's financial markets, a Times/Bloomberg poll has found.

Reluctance to use public money to rescue private firms runs across the population, the poll found: Democrats and Republicans, high-income and low-income families alike.

Asked whether the government should use taxpayer dollars to rescue financial firms whose collapse could have adverse effects on the economy, 55% of the poll's respondents said they did not believe the government should be responsible for funding a bailout plan.

However, opinions about the bailout plan appear to be malleable, perhaps because voters are still learning about the proposal. When some of those who opposed a bailout were interviewed, several said they would reluctantly accept a bailout plan if Congress decided one was necessary.

"It sticks in my craw," said Camille Woyak, 82, a retired office worker in Appleton, Wis., who said she opposed a bailout. "There should be some other solution. But I think the taxpayers are going to have to cover it. I don't know any other way out.

"I lived through the Depression as a little girl," she added. "I don't want to go through that again."

Other polls have found that voters want the government to do something to prevent a financial collapse, even though they don't like the idea of footing the bill. A poll released Tuesday by the Pew Research Center for the People and the Press, for example, found that 57% of respondents think the government is doing the right thing by intervening to stabilize the economy.

The contrast between the Times/Bloomberg poll and the Pew survey probably reflects the different wording of their questions.

The Times/Bloomberg poll asked respondents whether they believed it was "the government's responsibility to bail out private companies with taxpayers' dollars." A majority said no.

The Pew poll, by contrast, asked respondents if "investing billions to try to keep financial institutions and markets secure" was the right thing to do. A majority said yes.

"These were two different questions," explained Susan Pinkus, director of the Times Poll. "One asked whether the bailout was the right thing to do. The other asked if it was the government's responsibility."

Even Times/Bloomberg poll respondents who supported a bailout often added that they weren't happy about the idea.

"Normally, I'd like to keep government out of the economy as much as we can," said Morris Vermeulen, 73, a retired housing inspector in Rogers, Ark. "But somebody's got to do something. We can't have a complete financial collapse."

Still, Vermeulen added, he hoped Congress could find a way to penalize the Wall Street financial houses for forcing taxpayers to come to their aid. "We should draw a little blood from them," he said cheerfully.

That mix of sentiments is one factor that has caused some Democrats and Republicans in Congress to balk at the Bush administration's bailout plan. Democrats have demanded new aid for distressed homeowners and limits on the pay of top executives whose firms get help. Some conservative Republicans have said the plan is an unwarranted use of taxpayer money to intervene in the private markets.

In the Times/Bloomberg poll, a solid majority, 62%, said they believed that insufficient government regulation was partly responsible for the financial crisis.

As to where the blame should go, respondents were divided: 32% blamed Wall Street financial institutions, and 26% blamed the Bush administration. (Democrats tended to blame the White House; Republicans tended to blame Wall Street.)

Most also oppose federal loans to help ailing automakers -- another proposal Congress is considering -- the poll found. Among all respondents, 64% said they opposed government loans to automotive firms, and only 25% were in favor.

The financial crisis has helped push public gloom to a record depth: 79% of adults said they thought the country was "on the wrong track," the highest rate ever in a Times poll.

Asked whether the country was "generally going in the right direction" or "on the wrong track," 79% said "wrong track" and only 13% said "right direction." That exceeded the previous record of 78% who said "wrong track" in June.

When asked whether they felt the nation's economy was doing well or badly, 81% said the economy was doing badly, an increase from the 76% recorded in August -- and close to the record high of 82% recorded in June, when energy prices were soaring.

The nation's focus on the faltering economy appeared to bolster Democratic presidential nominee Barack Obama, seen by most voters as a better economic leader than Republican John McCain.

Asked which candidate could do a better job of handling the financial crisis as president next year, 48% of registered voters named Obama and 35% named McCain.

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