Bankers can breathe a sigh of relief, the public has put its pitchforks away. According to a recent Gallup poll a narrow majority of Americans have a favorable opinion of banks and real estate for the first time since the end of the crisis, possibly another sign that the recovery is finally starting to be felt throughout the economy. The average net favorability rating (percent favorable minus percent unfavorable) of all 24 industries surveyed by Gallup reached 18 this year, also a significant improvement over previous years, with banks scoring toward the bottom of the list for the last several years.
Changing views on banks likely a sign of the recovering economy
Bank favorability actually spiked in 2006 after deteriorating for three years, possibly because people who’s had difficulty getting mortgages in the past were suddenly qualifying in the run-up to the sub-prime crisis, but the bank’s role in that crisis understandably caused people’s view of banks to plummet afterward. It’s interesting that people’s opinion of the real estate sector fell faster and harder than banking, although the two sectors have roughly moved together in the years since.
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Although Gallup doesn’t try to explain why these views have changed, it seems likely that as long as unemployment was high and people were still suffering from the aftermath of the crisis they would have a low opinion of the industries largely behind it. Since the data was collected in early August, unemployment was under control (and reported as such), and people could simply be moving on. That the housing market is still a bit soft apparently hasn’t caused people to hold a grudge now that other factors are picking up.
Auto industry favorability dips
But public opinion isn’t just about assigning blame for the financial crisis. The reputation of the auto industry also took a hit after the crisis when the government decided to give auto manufacturers large, politically unpopular bailouts. Even though those bailouts, like the TARP loans given to banks and other financial institutions, ended up being paid back they smacked many people as unfair. Even so, the auto industry’s reputation recovered much faster than banking and real estate.
This year’s dip is pretty easy to understand considering the General Motors Company (NYSE:GM) faulty ignition scandal and an unprecedented number of recalls. Even if public opinion on other auto manufacturers was more or less steady you would expect that to show up in this year’s poll.