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In 2009, during the depths of the Great Recession, marketing research firm Harris Interactive surveyed thousands of Americans to gauge their feelings about the federal bailouts targeted at specific industries.
None of the bailouts were particularly popular. Only 23% liked the idea of providing federal support to insurance companies, 31% approved of bailing out the auto industry, and 35% approved of bailing out banks. In fact, the only semi-popular intervention on the table at the time was targeted at the construction industry, which was liked by a very slim majority of Americans -- 51%, to be exact.
Ironically, the construction bailout never happened, but the others did.
Today, the public's feelings about those federal initiatives is even worse. In March, Harris asked 2,451 American adults how they felt about the bailouts of 2008 and 2009. A miniscule 14% were happy about federal support of the insurance industry, 16% approved of the banking deal, and 30% liked the help offered to car companies.
But here's the funny thing: even though Harris found that 70% of Americans disapprove of the auto industry bailout, more often than not, they admit that it worked out okay.
Survey participants were asked, "Regardless of whether you support or oppose these government bailouts, do you think the ones that the government has done have helped or hurt the growth of the economy?" Approximately 29% insist that the auto bailout hurt the U.S. economy, while 20% think that it had no effect one way or the other. But 45% agree that the auto bailout program initiated by President Bush and continued by President Obama has helped the U.S. economy grow.
Are they right?
There's little arguing that the U.S. economy is in a much better place today than it was in 2009, and signs from most economists indicate that it's on an upward trend -- even though that movement comes in fits and starts.
The auto industry has contributed to the U.S. economy's growth. New-car sales are on a roll, keeping folks employed at car companies, parts suppliers, and service centers. And according to the Center for Automotive Research*, tax revenues associated with that work have been a boon to state and federal coffers.
In 2010, the production, sales, service, and use of automobiles contributed $91.5 billion to state governments and upwards of $43 billion to the feds. Kim Hill, CAR's director of the Sustainability and Economic Development Strategies group, says that "The automotive industry accounts for 13 percent of all state government tax revenues." (For CAR's full report, check this PDF.)
Which is great and very interesting, but Harris didn't poll bean-counters locked away in state vaults: Harris polled people on the street. And since most of those people aren't degreed economists, their responses tell us as much about public opinion of the auto industry as they do about the U.S. financial situation
In other words, in the public's mind, people often see a linkage between improvement in the auto sector and improvement in the U.S. economy as a whole. The validity of that view is up for debate, but it's clearly held by 45% of Americans.
How about you? Nearly three years after the fact, do you approve of the auto industry bailouts? And no matter how you answer that question, do you think the bailouts have helped the U.S. economy improve? Drop us a line, or leave a note in the comments below.
*Note: As our colleague John Voelcker has pointed out, CAR's research isn't necessarily suspect, but it bears mentioning that CAR "is closely associated with and partially funded by the industry". That's not to say that we question CAR's tax revenue figures, only that independent verification would be nice.