In October 2008, former SEC Chairman Arthur Levitt told Congress, "The key problem plaguing our markets is a total breakdown of that trust–investor confidence." Current SEC Chair Mary Schapiro spoke early and often on restoring investor confidence, as she did in February, just days into her new post:
"At a time when investors are appalled at the ways of Wall Street, it is there that change must begin. A strong and reinvigorated SEC will be on the beat like never before to catch wrongdoers. But there needs to be a new era of responsibility on Wall Street and throughout our markets to ensure that wrongs don't occur in the first place. The sooner that Wall Street works to repair its own problems, the sooner investors will once again find the confidence to invest in what should be the finest markets in the world."
Important words, no doubt. Particularly so as a snapshot of consumer attitudes right now is not a pretty picture and suggests there is a long road to travel before investor confidence returns.
Public opinion
Anti Wall Street; not anti business: A CNN poll, conducted from December 16-20, shows that 45% of the participants believe there is "too little" regulation of "the stock market and financial institutions," as opposed to "too much," (29%). In contrast, 50% of those surveyed believe there is "too much" regulation of "business and industry," compared with 30% who believe there's too little regulation.
A Bloomberg poll, conducted from December 3-7, further suggests public angst is not, generally, "anti business," but is specific to "big financial companies" and Wall Street. "Big financial institutions" are viewed as enriching themselves "at the expense of ordinary people," say 54%, versus having a "vital function that enables the economy to grow," as 39% indicated. In terms of "favorable/unfavorable" impressions the difference is stark. "Small business" is viewed favorably by 92% versus unfavorably by 3%; while "Wall Street execs" are viewed favorably by 18% of participants–and unfavorably by 66%.
Not confident in government: Also, a Time poll (October 26-27), suggests that the public is not confident of the government's handling of the financial crisis. In terms of "taking steps to avoid another financial crisis," President Obama gets better, but not good, grades as compared with other actors: 42% give the President a score of "excellent or good" versus 55% "only fair or poor." The president's score far exceeds "Democrats in Congress," who were rated 22% "excellent or good" versus 73% "only fair or poor;" "Republicans in Congress,"–rated by 13% as "excellent or good," and 82% as "only fair or poor." "Federal government regulators" received 14% "excellent or good" responses, compared with 75% "only fair or poor." And, finally, "Major banks and other Wall Street financial institutions," had the worst showing, with 7% of participants rating them as "excellent or good" and 88% "only fair or poor."
Still need more regs. Not surprisingly, perhaps, 59% of the public believes there "should be more regulation of Wall Street than we have had in the past," versus 23% who say there shouldn't be. This may be associated with the public view–75% to 18%–that Wall Street financial institutions, "will return to business as usual now that Wall Street has started to recover," and not "learn from their mistakes and…change the way they do business." As to whether "the United States could suffer another financial crisis in the next few years as a result of Wall Street firms taking too much risk," 85% of the public is "very concerned or somewhat concerned," while 14% of the public is "not very concerned or not at all concerned."
