No one ever gets punished, so they keep doing it again... and again

Many Americans believe the country's economic meltdown was primarily due to criminal behavior by some financial executives, and a sizable majority feel the federal government has not been aggressive enough in pursuing criminal behavior by top Wall Street executives.



The latest Rasmussen Reports national telephone survey shows that 47% of American Adults think criminal behavior by some in the financial industry was the primary cause of the meltdown. Twenty-eight percent (28%) blame insufficient government regulation, while only 12% say it was due to uncontrollable economic circumstances. Thirteen percent (13%) are undecided.



Just 13% believe the government has been aggressive enough in pursuing possible criminal behavior by major Wall Street bankers. Sixty-four percent (64%) disagree and say the government has not been aggressive enough. Another 23% are not sure.



But then 51% of Americans believe the federal government is more concerned with making Wall Street firms profitable than making sure the U.S. financial system works well for all Americans. Only 22% say the government is more concerned with making the system work for all, but 26% more are not sure.



...In October 2008 when the bank bailout was first being considered by Congress, 63% of voters said Wall Street will benefit more than the average taxpayer. That figure jumped to 80% by July of the following year. ...Two-out-of-three voters (68%) believe that government and big business work together against the interests of consumers and investors. That view is shared across partisan, demographic and ideological lines.



Majorities of adults across all demographic groups believe the government has not cracked down on Wall Street enough. Investors are only slightly more likely than non-investors to think the government has been aggressive enough in pursuing possible criminality on Wall Street.



Government workers feel more strongly than those who work for private companies that criminal behavior among financial executives is chiefly to blame for the financial meltdown... Sixty-eight percent (68%) of adults continue to believe that most of the federal bailout money for the financial sector went right to the people who created the economic crisis. Americans have opposed the bailout of the financial industry from the start.

[H]ousing prices continue to fall. They’re now 33 percent below their 2006 peak. That’s a bigger drop than recorded in the Great Depression. Homes are the largest single asset of the American middle class, so as housing prices drop many Americans feel poorer. All of this is contributing to a general gloominess. Not surprisingly, consumer confidence is also down.



The problem isn’t on the supply side of the ledger. Corporate profits are still healthy. Big companies continue to sit on a cash hoard. Large and middle-sized companies can easily borrow more, at low rates.



The problem is on the demand side. American consumers, who constitute 70 percent of the total economy, can’t and won’t buy enough to get it moving. They justifiably worry they won’t be able to pay their bills or afford to send their children to college or to retire. Banks, with equal justification, are reluctant to lend to them. But as long as consumers hold back, companies remain reluctant to hire new workers or raise the wages of current ones, feeding the vicious cycle. ...Worse yet, state governments-- starved for revenue and constitutionally barred from running deficits-- continue to cut programs. Local governments are now in worse shape, laying off platoons of teachers and fire fighters.



Under normal circumstances, this would be the time for the federal government to take bold action to ward off a double dip.



For example, it could put more cash in peoples’ pockets while giving employers an extra incentive to hire by exempting the first $20,000 of earnings from payroll taxes, for a year or two. It could lend money to state and local governments. It could launch a new WPA (modeled after its antecedent during the Great Depression) to put the long-term unemployed to work on public projects. It could amend the bankruptcy law to allow people to include their prime residences in personal bankruptcy, thereby giving homeowners more leverage to get mortgage lenders to mitigate the terms of their loans. It could enlarge and expand the Earned Income Tax Credit so that the bottom 60 percent got a wage subsidy instead of a tax bill.



But these aren’t normal circumstances. America has been through a devastating recession that poked a giant hole in the federal budget. And with a presidential election coming up next year, both parties are already maneuvering for tactical advantage.



Since taking over the House of Representatives in January, Republicans have focused on cutting government spending and paring back regulations. Their colleagues in the Senate, whose leader has proclaimed his major goal to unseat President Obama, are almost as single-minded. Cynics might suspect Republicans of quietly hoping the economy stays rotten through Election Day.



Democrats, meanwhile, are behaving as if they’re powerless to affect the economy even though a Democrat occupies the White House and his appointees run the federal government. They’d rather not dwell on the slowdown because they don’t want to spook the bond market or add to the prevailing gloom (Jimmy Carter’s ill-fated comment about the nation’s “malaise” during the stagflation of the late 1970s has served as a permanent admonition for presidents to stay upbeat).



Democrats are staking their electoral hopes on continuing disarray among Republican presidential aspirants, as well as the Republicans’ suicidal plan to turn Medicare, the popular health insurance system for seniors, into vouchers that would funnel money to private, for-profit insurance companies.



The result is as if Washington were on another planet from the rest of the country (many Americans would argue this is hardly a new phenomenon).



The noisiest battle in the nation’s capital is over raising the statutory debt limit-- a game of chicken in which Republicans are demanding, in return for their votes, caps on future federal spending while Democrats insist on preserving the possibility of tax increases on the wealthy. Countless budget analysts are combing through endless projections of government revenues and expenditures in five or ten years. Think tanks and blue-ribbon panels are issuing voluminous reports on how to tame the budget deficit in decades to come. The President, meanwhile, is trying to appear as fiscally austere as possible-- keeping a lid on non-defense discretionary spending, freezing the wages of civil servants, and offering his own deficit-reduction plans.

Rasmussen is generally recognized as part of the right-wing political machine. Their polling operation is normally a cheerleading squad for the GOP, not a serious investigation into public perceptions. It wasn't Rasmussen polling that inspired Donald Trump yesterday to declare that Ryan's plan is a death wish for Republicans . Both Quinnipiac and Herndon have shown in recent days-- as if the gigantic Republican upset in the conservative suburbs between Buffalo and Rochester weren't enough-- that voters are freaked out over the Republican Party's war against the middle class-- and particularly Paul Ryan's extremism.Across the country, Republican candidates are starting to get cold feet about walking the plank for Ryan's Ayn Randian delusions the way the whole GOP caucus in the House did. Florida state Senate president and US senatorial candidate Mike Haridopolos is too scared of the teabaggers to say he opposes it but too scared of independent voters to say he supports it.But yesterday in another matter near and dear to Randian sociopaths and Republicans in general-- abolishing regulations on Wall Street-- Rasmussen reported more heavy seas ahead for the GOP. Just as the Republicans are trying to water down regulations governing Wall Street predators, a huge majority of Americans say the government hasn't been tough enough on the banksters . Ras had no sugarcoating for their GOP clients on this one:Robert Reich has been writing about this endlessly. Tuesday evening I watched him patiently explain the vicious cycle of bankster foreclosures and economic downturns on CNN during Eliot Spitzer's show. On his blog yesterday he explained why the recovery has stalled and why economic growth is so anemic-- a "measly 1.8 percent annualized rate of the first quarter... not nearly fast enough to reduce our ferociously-high level of unemployment."

Labels: bankruptcy, banksters, Chris Hayes, mortgage crisis, Rasmussen, Robert Reich