Masses aren’t buying bailout
As congressional leaders struggled to craft a bailout plan for the nation’s troubled financial system Thursday, angry protesters mobbed Wall Street, telephones rang off the hook in House and Senate offices and a group of prominent economists sent off e-mail blasts critiquing the proposal.
Numerous opinion polls taken this week came to wildly varying conclusions about the level of support among Americans for the Bush administration’s $700-billion plan. But the increasingly loud roar coming from all corners of the nation shows that the idea of a bailout has touched a particularly sensitive nerve among the public.
A spokesman for Sen. Dianne Feinstein (D-Calif.) said her five offices had doubled staffing to deal with the constantly ringing phones. Through late Thursday, Feinstein’s offices had received a total of 39,180 e-mails, calls and letters on the bailout, with the overwhelming majority of constituents against it. The spokesman said the volume was as great as during the immigration debate and at key points during the war in Iraq.
Rep. Linda T. Sanchez (D-Lakewood) was also hearing it from her district, which includes parts of the city of Los Angeles and unincorporated L.A. County. “My constituents are telling me loud and clear that they aren’t convinced,” she said in a statement.
Typical of the tone of such contacts, Sanchez’s office said, was a missive from a constituent in Whittier: “The bailout legislation is being rammed through Congress in a matter of days. This is an illegal power grab by the White House and their richest friends on Wall Street.”
“It’s getting really controversial,” said Peter DeMarzo, a professor of finance at Stanford who was among 166 academics who signed a letter sent to House and Senate leaders calling on lawmakers not to rush deliberation on the plan. Sen. Richard Shelby (R-Ala.) held a copy of the letter as he attended a meeting on the bailout negotiations at the White House. Shelby cited the letter as support for his stance against the Bush plan.
DeMarzo and seven other faculty members organized an on-campus panel discussion Thursday night on the topic of the credit crisis and the bailout. “Everything is moving pretty fast and furious,” he said.
Polls taken in recent days have found little consensus among the American people on the Bush plan, which would provide funds to purchase huge quantities of mortgage-backed securities and other bad debt from troubled financial firms.
A poll by Rasmussen Reports early in the week found that 44% of Americans opposed the plan and 25% supported it. However, a USA Today/Gallup poll released Thursday showed more than 75% favored congressional approval of the bailout. A Bloomberg/Los Angeles Times poll conducted Sept. 19 through Monday showed 55% opposed to government bailouts of private companies.
More than 1,000 protesters clogged the street in front of the New York Stock Exchange on Thursday, bearing signs calling the bailout a “class war crime.” A quartet dressed in business attire contrasted with the mob, holding up signs asking Congress to “have a heart, save a hedge fund,” as other demonstrators jeered and shouted obscenities at them.
But even where tempers were more subdued, opinions were in healthy supply.
At Los Angeles’ Cobras and Matadors, a tony Westside restaurant, a group of six new students at UCLA’s Anderson School of Business met Wednesday night to prepare for their first day of classes. Over red wine, steak and churros, most of the group professed conservative views on fiscal issues, stressing individual responsibility. Yet most everyone felt the plan had some merit.
Jadine Knox, an information technology analyst who aspires to use her MBA to start a career in construction, fashion or baking, called herself “conflicted” on the matter.
“Seven hundred billion dollars works out to a lot of money for each person in this country,” said Knox, who lives in Redondo Beach. “I don’t see what the average person will get out of this.”
Irene Rashkovan, who works for NBC Universal, finished off her glass and wrinkled her brow. “I don’t think we have a choice but to do this bailout,” she said. “It’s not perfect, but we need these banks.”
Jason DeMatteis, an engineer who bought a home north of Burbank in 2005, guffawed.
“You have to hold people responsible to some extent,” he said. “I find it a very hard pill to swallow that I have to work my butt off to pay my mortgage and other people get bailed out.”
Times staff writer Carolyn Cole in New York contributed to this report.