Bank Bailout Now Hated More Than Ever: Study

We Hate Bailouts More Than Ever: Study

Americans have always kind of hated bank bailouts, but that hatred seems to be getting hotter with time -- which is a headache for President Obama, who gets blamed for them, fairly or not.

A new poll by Harris Interactive finds people still dislike the bailouts the U.S. banks got during the financial crisis, as they have pretty much consistently for the past few years.

What's striking is that the few remaining bailout fans are a dying breed.

Just 23 percent of Americans think bailing out the banks in the crisis helped the economy, according to the poll, and even fewer, just 15 percent, think bailing out insurance companies helped. In contrast, a slightly larger 45 percent think bailing out the auto sector helped the economy.

The appetite for future bailouts is almost universally gone, with 84 percent of respondents opposing another bank bailout, 86 percent opposing another insurance-company bailout and 70 percent opposing another automobile bailout.

In 2009, in contrast, only 65 percent of Americans opposed another bank bailout, compared with 69 percent opposition to another car bailout and 77 percent against another insurance bailout.

The disgust is bipartisan, with 87 percent of Republicans and Independents opposing future bank bailouts, along with 81 percent of Democrats. There's a bigger split between the parties on the subject of future auto-sector bailouts, with just 54 percent of Democrats opposed, compared with 84 percent of Republicans and 72 percent of independents.

Americans have registered their distaste for bailouts repeatedly in recent years, even at the depths of the crisis. A Rasmussen poll in February 2009, when the recession was still raging and the stock market still crumbling, found that just 56 percent of Americans opposed funneling more government cash to the banks.

Keep in mind that the American public is not exactly razor-sharp when it comes to understanding the bailouts or their implications. Other polls have shown that most Americans think President Obama was responsible for the bank bailout, when in fact it happened on the watch of President Bush.

For what it's worth, most experts think the bailout prevented an even deeper crash and economic depression. Then-Treasury Secretary Hank Paulson tested the counterfactual by letting Lehman Brothers croak, and the result was a face-peeling market firestorm that nearly took down AIG -- the massive insurance company whose bailout is so unpopular now.

But the public's attitude will make it tougher for policy makers dealing with future financial crises. You can bet they're going to want to bail stuff out again, and the sell is going to be harder.

It's also a challenge for President Obama, whose re-election campaign depends in part on convincing Americans that the bailouts they think he cooked up have prevented far worse outcomes.

Then again, maybe the president could have insulated himself a little better from association with the distasteful bailout by not seeming to cater to the banks as much as he has: Among other things, he gave bank apologists like Larry Summers and Tim Geithner big jobs in his administration and has let the too-big-to-fail banks get even bigger.

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