4 out of 5 Americans Aren't Buying Financial Reform

Bloomberg just completed a poll this week which finds four out of five Americans have little to no confidence in new financial reform legislation likely to be approved by Congress. The bill includes additional Wall Street oversight, a new consumer watchdog housed within the Fed (where it’s bound to be as secretive as other Fed activities), a new procedure for winding down “too big to fail” institutions in the process of collapsing, and other such programs.

It’s an enormous and wide-reaching bill more likely to bring about a host of new unintended consequences than to avoid the next economic shock. At least this time around the public seems to be eyeing the governmental maneuver with caution.

Here are the results from Bloomberg:

“Almost four out of five Americans surveyed in a Bloomberg National Poll this month say they have just a little or no confidence that the measure being championed by congressional Democrats will prevent or significantly soften a future crisis. More than three-quarters say they don’t have much or any confidence the proposal will make their savings and financial assets more secure.

“A plurality — 47 percent — says the bill will do more to protect the financial industry than consumers; 38 percent say consumers would benefit more.”

The findings also go on to show…

“A plurality of respondents age 55 and older — 39 percent — still favors a smaller government role. Younger Americans don’t agree, with only a quarter of those under 35 in favor of less regulation.

“Skepticism about the financial bill, which may be approved this week, cuts across political party lines. Seven in 10 Democrats have little or no confidence the proposals will avert or significantly lessen the impact of another financial catastrophe; 68 percent doubt it will make their savings more secure.”

At this point, it’s not surprising to see the public lack enthusiasm about financial reform given the failure of stimulus to offer more than a flash in the pan boost to markets. The article also highlights how about 60 percent of respondents now view the $700 billion Troubled Asset Relief Program as an “unnecessary bailout.”

One of the interviewees — with two jobs including one at a check-cashing firm — probably says it best, “They’re just going to find a way around the new rules.”

You can read more details about lost faith in US financial reform in Bloomberg coverage of how the Wall Street fix is seen as ineffective.


Rocky Vega,
The Daily Reckoning

The Daily Reckoning