Abstract
The economic crisis of 2008 led to a loss in confidence in financial institutions and to government more generally. However, public perceptions of the economic stimulus plan were marked by beliefs that wealthy businesspeople were getting special treatment while ordinary Americans were not. Perceptions of increasing inequality are not typically linked with confidence in government or business as much as they are with trust in people more generally, which is a key element in social cohesion in any society. A survey by the Pew Research Center in 2004 asked whether business is more concerned with making a profit or balancing profits with public service. While most Americans see business as striking a balance, there are clear concerns for how people might see business after the economic crisis. Factors that underlie trust in other people include whether success in life is determined by hard work, whether the rich get richer and the poor get poorer, and whether success is determined by factors outside your control – and they also shape the belief that businesses balance profits and public service. I also show a strong connection between both trust and honesty and the level of inequality in American society. With greater inequality comes less trust and with less trust comes a lack of willingness to compromise to achieve a larger social purpose. The legacy of the financial crisis and the economic inequality that it has left in its wake (both actual and perceived) is a hardening of both ideological and partisan lines, making it more difficult to enact legislation that might help the economic recovery.
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Notes
This discussion largely follows Uslaner (2002: Chapter 2).
Online data analysis at http://sda.berkeley.edu/cgi-bin/hsda3, accessed 10 May, 2009.
These measures are dummy variables measuring whether a respondent expressed great confidence in financial or political institutions, both for the individual and aggregate measures.
I estimate these probabilities using the predict command in Stata and an ado file that I wrote (available from me) with help from James Hardin when he was at the Stata Corporation. For age, I do not use the maximum value, but truncate it at 75.
I am grateful to Michael Hanmer for providing the Stata routine to estimate changes in probabilities with different mean values by estimating the probabilities using the normal distribution.
The ANES used a five point scale, the Pew survey used a four point scale. I use the share of respondents who agree or completely agree here.
From a Pew Global Attitudes Survey in 2007, obtained from IPOLL at the Roper Center Archives (www.ropercenter.uconn.edu).
From a May, 2007 survey by the Pew Forum on Religion & Public Life US Religious Landscape Survey, from IPOLL (see footnote 8). Other surveys mentioned below are also from IPOLL.
Tau-c=0.345 and gamma=0.617. The honesty measure is a five-point Likert measure, but I dichotomized it and recoded the small share of people in the middle (7.4 percent) as missing values. The correlations are based upon the full five-point scale for honesty. For the dichotomous measure, phi=0.311 and Yule's Q=0.847.
Putnam has made the DDB Needham data from 1975 to 1998 available on his web site, http://www.bowlingalone.com. I am grateful to Chris Callahan of DDB Needham for providing the Lifestyle Surveys from 1999 to 2006.
http://www.politico.com/news/stories/0509/22445.html, accessed 13 May, 2009.
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Acknowledgements
I am grateful to the General Research Board, University of Maryland – College Park and the Russell Sage Foundation and the Carnegie Corporation for a grant on a related project that is encompassed in my work on the United States on ‘Inequality, Trust, and Civic Engagement’, 2001–2004 and to my colleague Michael Hanmer for help in estimating changes in probabilities over time.
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Prepared for the Ruffin Summit on Public Trust in Business, Darden School of Business, University of Virginia, 18–20 September, 2009.
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Uslaner, E. Trust and the Economic Crisis of 2008. Corp Reputation Rev 13, 110–123 (2010). https://doi.org/10.1057/crr.2010.8
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DOI: https://doi.org/10.1057/crr.2010.8