Commentary

Main Street vs. Wall Street

by Jack Loechner , Staff Writer, March 10, 2009

A new survey of American consumer attitudes to Wall Street by The Harris Poll of 1,010 adults surveyed between February 10 and 15, 2009, finds that 83% of adults thinks that bonuses paid by financial institutions, that lost money in 2008, should be returned and be paid to shareholders. 87% believe that "recent events have shown that Wall Street should be subject to tougher regulation."

78% of adults thinks "Wall Street firms should only pay bonuses when they are doing well and making good profits." Only 22% accept the argument that "in order to attract and retain top talent, these companies need to pay these large bonuses."

Asked over the last 13 years, this year's results are the worst ever for Wall Street. For example:

Those who think "most people on Wall Street would be willing to break the law if they believed that they could make a lot of money and get away with it" are up to 71%. The highest number previously was 64% in 1996
Those who believe that "most successful people on Wall Street deserve to make the kind of money they earn" have fallen to 30%, compared to 40% last year. The lowest number previously was 36% in 2002
Those who believe that "in general people on Wall Street are as honest and moral as other people" have fallen to 26% from 41% last year. The previous low was 35% in 2000, 2002 and 2003
A 54% to 39% majority believes that Wall Street benefits the country more than it harms it. However, a year ago a much larger 73% to 23% majority believed this
A 62% to 32% majority believes that Wall Street is absolutely essential because it provides the money business must have for investments. This is also lower, but not very much lower than the 71% to 25% majority who felt this way a year ago.

Two conclusions can be drawn from these results, says the report:

Many people differentiate between Wall Street: banks and financial services firms on the one hand, and Wall Streeters: the people who work and manage banks, financial services firm on the other. They tend to see necessary and valuable institutions managed by dishonest and unethical people
The new administration clearly has a popular mandate for new and stronger regulation and for taking a tough line on Wall Street bonuses

Consumer Attitude About Impact of Wall Street Trends On the Nation Base: All adults (% of Respondents, Percentages Rounded)
	*2000*	*2002*	*2003*	*2006*	*2009*
Benefits (Net)	69%	66%	68%	73%	54%
Benefits country a lot	22	23	24	22	17
Benefits country somewhat	47	43	44	51	37
Harms (Net)	16	24	16	23	39
Harms country somewhat	13	17	11	17	25
Harms country a lot	3	7	5	6	14
Not sure/Refused	13	7	13	4	5
Source: Harris Interactive, February 2009

Agreement/Disagreement About Wall Street Trends Base: All adults (% of Respondents)
	*Year Surveyed*	*% Agree*	*% Disagree*	*% Not Sure/Refused*
Recent events have shown that Wall Street should be subject to tougher regulations
	2009	87%	10%	3%
Wall Street firms should only pay bonuses when they are doing well and making good profits
	2009	78	20	2
Most people on Wall Street would be willing to break the law if they believed they could make a lot of money and get away with it
	2009	71	27	2
	2006	63	35	3
	2003	54	34	11
Wall Street is absolutely essential because it provides the money business must have for investments
	2009	62	32	5
	2006	71	25	4
	2003	62	24	13
In general what is good for Wall Street is good for the country
	2009	37	59	3
	2006	37	60	3
	2003	39	47	13
Most successful people on Wall Street deserve to make the kind of money they earn
	2009	30	66	4
	2006	40	56	4
	2003	37	51	12
In general people on Wall Street are as honest and moral as other people
	2009	26	70	4
	2006	41	54	4
	2003	35	50	15
Source: Harris Interactive, February 2009 (Note: Percentages may not add up exactly to 100% due to rounding.)

Agreement/Disagreement About Wall Street Bonuses Base: All adults
	% Agree	% Disagree	% Not Sure/Refused
These bonuses should be returned and the money should instead be paid out to the shareholders	83%	14%	3%
In order to attract and retain the top talent, these companies need to pay out these large bonuses	22	76	2
Source: Harris Interactive, February 2009

For more information, please visit Harris Interactive here.

financial services, politics, research

7 comments about "Main Street vs. Wall Street ".

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Nancy Cook from SRA Research Group, March 10, 2009 at 9:13 a.m.
Harris - How do you draw the conclusion that main street wants MORE government regulation? Can the government legislate morality? This conclusion is pulled out of thin air.
Reply

Richard Monihan, March 10, 2009 at 9:34 a.m.

This is a classic example of a poorly designed poll. The outcome it wished to push forth was built into the questions, yielding the desired result.

Fact is, if people understood that there is already PLENTY of regulation and the problem was LACK OF ENFORCEMENT, they'd shift their views.

I do believe that if people can get away with breaking the law so they can make money they will. Which is why we have law enforcement - to catch them. But designing laws to legislate behavior prior to action is wrong - how can we be sure people will be willing to break laws until they actually do?

Once Wall Streeters saw that bending or breaking laws would produce large returns, more of them began to do it. These returns, of course, are illusory because eventually the payback has to be made and if there is nothing to back it - the total loss becomes apparent.

Investors need to be smarter, the blame doesn't fall squarely on the shoulders of Wall Streeters. They do carry some of the blame, but certainly not all.

It's a shame that today the people who did things right and protected their money, didn't take inordinate risk, managed their finances, are the ones being punished while those who played fast and loose are getting governement bailouts.

The whole problem is due to moral hazard. Now that we have a government willing to bail out the cheaters, moral hazard will be taken to new heights.

Jim Dugan from PipPops LLC, March 10, 2009 at 10:44 a.m.

Did any of you ever read 1984 or watch The Prisoner or think about what you were doing when you were doing it? First of all, as stated in a recent article, we're dealing with the Parties of Liars, Buggers, and Thieves.

And, we always read about Wall Street vs. Main Street storyline. Well, I live in downtown Orlando, where, ironically, we have a little area called Wall Street, but I actually live on Central Boulevard in a high-rise condo, which I think has been forgotten. We were here before this all started - not to flip it - not because we were rich, simply a choice way back when.

We're the ones who live in one of the first high-rise condos in downtown Orlando (1983), and bought in 1995 to live downtown. Yes, we went up and up in value, and even at one time took an option for a year on the penthouse.

But, during analysis, decided to keep to the condo that we owned, not overextend on the penthouse, and maintain what we had. WE saw over a dozen HIGH RISE crains on any given day working downtown on new developments.

We would see helicopters flying over the city everyday looking for another group of trees to tear up and put up another parking lot or high-rise condo.

We own a nationwide exterior cleaning business and we're based in Orlando.

We have done nothing other than to try to run the business, maintain the overhead and earn a modest living. I know to some people living in a high-rise condo in downtown Orlando may not sound modest, but some people run businesses and others work for them and we made our choices. It's a little bit of stretch to become an entrepreneur, but you don't get there without a little bit of a stretch.

In any case, we have been slammed by everything, because of the way this has all been handled and I will love to do whatever I can for those in less fortunate situations, but I'm almost stagnant because of the situation where I could easily put a dozen people to work. I just don't have the credit line or ability to personally do it anymore. What do you do? And it's not just good intentions. It's critical to an important change that needs to be implemented - now!

Not sure if this is the forum, but would truly love to hear ideas. I'll sell our way out of it. We're in a preservation business and what a better time for that. Buying new shingles for your roof could set you back a few thousands.

But, we could do so much more.

And, by the way, WE ARE THE GOVERNMENT!

Stuart Schneiderman from MTV Networks, March 10, 2009 at 10:58 a.m.

"These bonuses should be returned and the money should instead be paid out to the shareholders" is an example of a double barreled question -- asking two questions in one. What if i think the bonuses should be returned but the money NOT be paid to shareholders? Wooops.

Rick Iswalt from Global Employment Solutions, Inc., March 16, 2009 at 4 p.m.

In my opinion, to stop at the bonuses is lax. The executives who accepted bonuses, while their companies failed, and took federal bailout funds (read: our & our children's' tax dollars) should be indicted under the RICO Act, and tried as criminals. Seize their assets: their yachts, their planes, their summer homes, their wives fifty-thousand-dollar rings. If found guilty, they should be prosecuted to the fullest extent the law will allow. Put them to work handing out food and clothing to the unemployed and working poor which they've created.

Send a message that these disgusting displays of greed, corruption, thievery, and complete lack of consideration for their fellow countrymen, and human beings will not be tolerated.

Angela Horn, March 23, 2009 at 9:59 a.m.

As distasteful and repugnant as I find rewarding dishonesty and failure, the fact remains that the majority of these were retention bonuses, designed to keep key employees from leaving a company in droves, thus hastening its demise. They are paid out according to the terms of contracts inked well before the house of cards began its collapse. To refuse to pay according to the terms of a legal contract simply because we don't like the way the game ended up is not fair to the individuals who signed the contracts in good faith. By staying through the deadline imposed, these individuals lived up to the terms of the contract, and they have earned the bonus. No, I'm not happy about it but at least I'm willing to admit to myself that part of it is sour grapes...

Either we are a country with rules, laws and contracts or we are not.

Claudia Torelli from Cary Capital Consulting, March 23, 2009 at 6:36 p.m.

Facts:
1) The bonus amounts are outrageous
2) There should not have been any bonuses for people in the division that created the losses of AIG.
3) However, if the bonuses were established in legally binding contracts, it is ILLEGAL to try to get them back by force, or to retroactively TAX them by creating a tax law that targets a specific group of individuals. That is taxing by revenge and is against our Constitution.

Shameful? Yes. But don't try to right a wrong, by ignoring the rule of law in this country.