Up Against the Wall Street Banks

April 22, 2010
Posted by Jay Livingston

President Obama could have stayed in Washington today to make his pitch for financial regulation of banks. But he decided to make the trip up to New York, and I think I know why. It’s all about “Wall Street.”

Words matter, as Bill Clinton recently said, alluding to an earlier speech by Barack Obama. Words matter to survey researchers too, not just to Democratic presidents. Ask people about the rights of “gays and lesbians,” you get one answer. Ask about “homosexuals,” you get less support. (See my earlier post here.)

Now it’s the banks. Should they be regulated? If you ask about “large banks and financial institutions,” the difference between Favor and Oppose is negligible* – three percentage points. But if you ask about regulating “Wall Street Banks” the difference jumps to 14 points – 50% in favor, 36% opposed. (From a recent Gallup poll.)

The choice of words matters, but it matters more to some people than others. Mostly Republicans. When you break down the Gallup data by political affiliation, the results look like this.

(Click on the chart for a larger view.)

For Democrats and Independents, the choice of words makes little difference.** A big bank is a big bank regardless of its address and regardless of what you call it. But not for Republicans. They are generally against regulation, of course. Only 22% of Republicans want to regulate “large banks,” and 70% oppose such regulation. But ask them about “Wall Street banks,” and regulation begins to look better. Thirty-five percent are in favor. And opposition drops to barely half (53%).

I leave it to readers to speculate as to why Republicans find that large banks are so much more in need of regulation when those banks are located in New York’s Wall Street district. But no wonder that the world’s largest banking group, HSBC, has been promoting itself, in the US at least, not as a multinational giant but as a repository of local values.

* That’s within the 0.95 margin of error of 4 points.
** The differences are within the margin of error, which is 5 points in the split-sample questions.

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