America votes for less regulation of Wall Street! Or not.
My colleague Mike McGough's skeptical post about the USA Today poll on Supreme Court nominee Elena Kagan reminded me of a survey released Thursday by GfK Financial Services, a New York firm that does research for the financial industry. The headline on the press release neatly summarizes the research:
NEARLY HALF OF AMERICANS PREFER LESS GOVERNMENT INVOLVEMENT IN THE FINANCIAL SERVICES INDUSTRY
By "nearly half," the survey meant 42% of a "representative sample" of 1,000 adults, compared to 25.5% favoring more government involvement. The methodology seems reliable (unlike, say, an unscientific online poll), but that doesn't mean the poll's results are meaningful. What, exactly, does it mean to "prefer less government involvement in the financial services industry"? To blanch at the thought of regulating derivatives, or to oppose more bailouts of Wall Street high-rollers? Or both?
The problem with GfK's poll is that it's based on a single, vague multiple-choice question: "How would you describe your feelings about the future of government involvement in the financial services industry?" Respondents had to pick from the following answers: "I prefer less government involvement"; "I prefer more government involvement"; "I prefer the government involvement stay the same as it is now"; and "Don't know."
If you think that Washington should never rescue another bank -- a feeling shared by approximately 105% of America -- does that mean you want less government involvement in the future, or more? You might equate "less government involvement" with "no taxpayer bailouts" but still support measures that would limit risk-taking and require more transparency. Or you might like the idea of giving large, failing institutions an orderly way to go out of business without bringing down the entire financial system. That might seem like less government involvement, even if it means giving regulators new powers to dissolve nonbank banks such as American International Group instead of keeping them afloat.
The best indication that the question was fundamentally flawed is that more than 12% of the respondents wanted to maintain the status quo. We just went through one of the all-time worst collapses of the financial industry, and 1 out of every 8 Americans wants regulators to keep doing what they've been doing? I don't think so.
-- Jon Healey