One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence that the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.
Even more — 80 per cent — rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations.
The public sentiment also poses a challenge to central elements of Mr. Obama’s governing agenda. Half of those surveyed said deficit reduction should be a national priority over increased spending on health care, education or alternative energy.
“I know a lot of people who don’t have health care and really can’t afford it,” said Judy Purkey, a 57-year-old grandmother from Morristown, Tennessee, who has raised four grandchildren and is living on disability payments. But she added: “The economy is so bad. You’ve heard the expression getting blood out of a turnip? — Well, that’s what’s going on.”
The President, in a CBS interview that aired on Sunday on the TV news magazine 60 Minutes acknowledged the public’s quandary.
“This is a very difficult economic environment. People are feeling anxious,” he said. “And I think it is absolutely fair to say that people started feeling some sticker shock.”
Still, Mr. Obama generally avoided public blame for the recession or the condition of the banking sector.
Only one out of five surveyed said Mr. Obama bore responsibility for the recession; 54 per cent blamed former President George W. Bush and 19 per cent blamed former President Bill Clinton.
Financial institutions, however, bore the brunt of the criticism — 79 per cent of those surveyed said banks and lenders that made risky loans deserve quite a bit of the blame. Sixty eight per cent held the federal government responsible for not adequately regulating banks and 65 per cent blamed borrowers who could not afford to repay loans.
In a glimmer of good news for the administration, 17 per cent of those surveyed said the government’s massive economic stimulus has improved the economy, a 10 percentage point increase over July. Nearly six out of 10, however, said they are not confident that the $787 billion that Congress approved to lower taxes and inject spending into the economy will do any good.
The White House has been promoting the stimulus package as a job creator and job saver that has helped keep unemployment from rising above its current 9.7 per cent level — the highest since 1983.
Michael Painter, a 38-year-old unemployed plumber from Orlando, Florida, said that while he believed that the spending package would ultimately stimulate the economy, it had yet to help him or his laid-off wife and teenage daughter.
He said he approved of Obama’s job so far, but not Congress’ “The people in Congress need to quit bickering about party issues and start worrying about people issues.”
The Obama administration also has begun to portray the financial sector in more upbeat terms, eager to make the case that government interventions begun under then President George W. Bush and continued, altered or expanded under Mr. Obama have brought stability to the markets.
Obama plans to deliver a speech on Monday — the anniversary of Lehman Brothers’ bankruptcy — to outline the administration’s achievements and press Congress to enact changes in bank regulations.
But the AP-GfK poll illustrates the difficulty he faces.
More Americans worry about facing big, unexpected medical expenses now than they did in July — up 7 percentage points to 68 per cent among those polled. Likewise, more worry that the value of their stocks and retirement investments will drop — up 4 per centage points from July to 68 per cent.
In October, then President Bush pushed a $700 billion financial rescue package through Congress on the condition that only half could be spent without further congressional authority. Mr. Obama, upon becoming President in January, succeeded in getting the second amount released, despite growing apprehension among lawmakers about the wisdom of such a bailout.
Mr. Obama has repeatedly said that the rescue of the financial sector would be incomplete without a new regulatory regime that would prevent a recurrence of the crisis. Mr. Obama has sent the outlines of possible regulation to Congress. Key lawmakers in the House and Senate have promised Mr. Obama legislation by the end of the year, but there is vigorous debate over key elements of Mr. Obama’s plan, including a new consumer finance protection agency and the designation of the Federal Reserve as the main overseer of large institutions that could pose risks to the system.
The survey of 1,001 adults with cell and landline telephones was conducted during September 3-8. It had a margin of sampling error of plus or minus 3.1 percentage points.