Linda Forest cringes when she thinks about the millions of dollars corporate chief executives earn. She believes greed is to blame for the nation’s economic crisis.
So the third-grade teacher from DeSoto, Texas, believes the pendulum needs to swing away from a less-regulated business environment to one with more government intervention and oversight to lift the country out of its morass.
She is among the majority of Americans who favor the idea of Washington stepping in to prevent any further collapse of the nation’s economy, according to a Los Angeles Times/Bloomberg poll.
“I’m hesitant to get government involved,” said Forest, 46, who was contacted in a follow-up interview. “But I do know there needs to be intervention. They need to do it with a watchful eye.”
The survey of 1,000 adults was taken Saturday through Monday and has a margin of sampling error of plus or minus 3 percentage points. The poll showed that most of those surveyed favored increasing government intervention in the economy, and half blamed lack of regulation for many of the nation’s current woes.
About two-thirds back tighter regulation of banks and financial institutions, and half said the federal government should take an ownership stake in banks and other industries to save the private sector.
Asked whether such moves would constitute a step toward socialism, about half said yes, but just 20% said that this worried them “a lot.”
Most also said they favored President-elect Barack Obama’s plan to engage in public works projects as a way to kick-start the economy, and 60% favored helping individual homeowners who face foreclosure.
The poll, which was completed before Wednesday’s announcement of a plan to issue $14 billion in emergency loans to automakers, found lukewarm support for helping the car industry, even though 88% agreed that a collapse of the major car companies would be a problem for the country.
Forty-seven percent of Americans favored some sort of financial rescue for automakers, slightly more than the 42% who opposed a rescue.
Forty-eight percent of those polled said the federal government should let financial institutions fail, and 34% said they should be rescued.
Americans drew the line when it came to restricting pay. Fifty-three percent opposed prohibiting companies that receive assistance through the Treasury Department rescue plan from paying CEOs or executives more than $400,000 a year, the same salary as the U.S. president. Thirty-six percent favored the salary limit.
Yet 37% said year-end bonuses should be canceled for Wall Street executives whose firms are bailed out by the government. Thirty-nine percent said all Wall Streeters should forgo their bonuses -- whether or not their companies are rescued by taxpayers.
“Americans are conflicted,” said Times Poll Director Susan Pinkus.
“They realize that we have to help the economy and they may have to hold their noses while the federal government does the things they don’t like. They are reasonable and pragmatic about it and understand it has to be done.”
But the support for federal loans comes with stipulations. Americans want to make sure companies don’t squander the money, and some believe there should be some sacrifice in order to receive the loans.
Dave DeBoer, a former owner of a rail-car manufacturing company, doesn’t mind having the government hand out loans to struggling industries -- as long as they go through bankruptcy first, he said.
“Bankruptcy is a cleansing process,” said DeBoer, who lives near Watsonville, Calif. “I have no problem with government giving a lending hand after that. That way, you might not have the same folks in charge who got you into trouble in the first place.”
DeBoer was one of the 87% of those polled who thought deregulation in the banking and financial industries should take some or all the blame for the current economic crisis -- a seemingly growing viewpoint.
By comparison, a September Times/Bloomberg poll asked whether deregulation was partly responsible for the financial and housing crises, and 62% said yes.
“There’s a place for [government intervention], because during the Great Depression nobody did anything until it was too late,” DeBoer said.
Forest, the teacher, said she’d like to see a “car czar” appointed and more guidelines for the banking industry.
“There needs to be tighter regulation,” Forest said. “We were too far on the side of capitalism. We need to move more toward the middle.”
Not surprisingly, nearly everyone interviewed -- about 90% -- said they believed the economy was doing badly, and about two-thirds thought the situation would remain the same or get worse over the next six months.
Still, the results showed a small rise in optimism, with 35% of respondents saying they thought the economy would do better in six months, up from just 28% in August.
“Some of the change is because of the hope and optimism of a new president,” Pinkus said.
“Obama came out of the gate really fast picking an economic team and laying out what he wants to do to turn the economy around. Yet people are still very worried.”
The poll also found that Americans continued to be insecure about their personal finances.
“I’m going to have to continue being very frugal with my money to get by,” said June Myers of Herculaneum, Mo.
Myers, 76, said she receives $1,046 a month in Social Security, which she supplements with $280 every two weeks washing dishes at a nearby middle school.
“It’s mind-boggling when you hear about these salaries on Wall Street,” Myers said. “Me? My house is paid off, I’m very healthy and active. I hope I can retire by 80.”