Wall Street Fix Seen Ineffectual by Four of Five in U.S.

“The mood of the American public is highly skeptical toward government and its ability to do right by the average person”

Almost four out of five of Americans (79%) 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 (78%) 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.

While skeptical about the bill’s benefits, Americans don’t want a return to the days before the financial markets suffered their biggest turmoil since the Great Depression: A plurality of respondents says they have become more supportive in recent months of tougher regulations. By a three-to-one margin (45% to 15%), Americans have grown more favorable to stronger regulation rather than less. Even Republicans have become more inclined to stricter oversight.

Americans are about evenly divided on the question of government regulation in general. Thirty-five percent of those polled see the need for more oversight, while 33 percent prefer less; 30 percent say the current situation is adequate. In some other national polls before the crisis, a plurality favored less government regulation.

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. Seventy percent of 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.

Americans say the restructuring won’t make much difference in the way Wall Street does business. Almost half of those polled (47%) say banks will make few if any changes in the way they act in response to the overhaul; another 22 percent expect only minor changes.

Democrats More Optimistic

Democrats have greater optimism that consumers will benefit more than the financial industry from the proposals, with 51 percent saying that will be the result. Just 28 percent of Republicans and 35 percent of independents agree.

Most Americans reject any new government rescues of financial institutions, such as arranged for New York-based Citigroup Inc. and insurer American International Group Inc., according to the poll.

They also oppose letting the market work and having the private sector deal with the consequences of any collapse.

Fifty percent of respondents think the federal government should force a company to work its way out of any problems, including bankruptcy, through the courts.

Down on Bailouts

Almost 60 percent of respondents say the $700 billion plan that Congress passed in late 2008 to help the banks – the Troubled Asset Relief Program -- was an unnecessary bailout.

“The mood of the American public is highly skeptical toward government and its ability to do right by the average person,” says J. Ann Selzer, president of the polling firm. “That explains some of the apparent contradiction in seeing a need for more regulation yet having little confidence that what is currently on the table will do much for consumers. They just feel they’ve been played and they don’t want to be fooled again.”