Commentary | Economic Growth

Tracking the recovery: Big banks seen as big beneficiaries of government economic policies

The government’s economic policies have helped big banks a lot, but done little or nothing for the average working person, according to a new survey of voters, which finds widespread concern over the country’s mounting unemployment, as well as a strong sense that the government needs to do more for workers and small businesses.

The survey, Tracking the Recovery: Voters’ Views on the Recession, Jobs, and the Deficit, compiles the views of 802 registered voters who were questioned in mid-September. Asked which groups had been helped “a lot” by the government’s economic policies, 62% said large banks and 54% said Wall St. investment companies. That compares to just 13% who said those same policies had benefited the average working person a lot, and 10% who said they or their families had been helped a lot. Asked how much the government’s economic policies had helped people who had lost their jobs or had their hours cut, only 15% said they had helped a lot, while 61% said they had helped very little or not at all.

It’s worth noting that a far greater portion of voters indicated that their families had been directly affected by the widespread job loss. Close to a quarter of those surveyed said their household had suffered a layoff, and 37% said someone in their household had had their hours or pay cut.

People who participated in the survey seemed cognizant of aid provided under the $787 billion American Reinvestment and Recovery Act (ARRA) passed earlier this year, but thought it did not do enough. Two-thirds of those surveyed said the Recovery Act had had a positive impact, but that it has helped a little rather than a lot.

As that poll reflects, while the $787 billion of stimulus spending provided under the Recovery Act sounds like a massive amount, it is increasingly being seen has too small to make more than a dent in the country’s long and deep economic downturn. September marked the 21st consecutive month of job loss, making it the longest job loss streak the country has seen in 70 years. During a Sept. 30 panel discussion EPI hosted on Generating a Robust Recovery, J. Bradford DeLong, professor of economics at the University of California at Berkeley, offered some context. “We did somewhere between a third and a fifth of what we needed to do with ARRA,” said DeLong, who served as deputy assistant secretary of the Treasury for Economic Policy in the Clinton administration.

In his July briefing paper, The Job Isn’t Done, EPI President Lawrence Mishel also outlined how the economy had deteriorated much more quickly than anyone had expected when the Recovery Act was designed in late 2008. “The ARRA was designed in late 2008 in the hopes of limiting the rise in unemployment to around 8%,” Mishel wrote. “Unfortunately, the economic forecasts at that time understated the growth of unemployment ahead: in fact, they weren’t even close.”