The signs are everywhere: Americans have lost trust in our institutions.
The Chicago Booth/Kellogg School Financial Trust Index published yesterday shows that only 22% of Americans trust the nations financial system.
Seven in 10 Americans believe that the country is on the wrong track; eight in 10 are dissatisfied with the way the nation is being governed. Only 23 percent have confidence in banks, and just 19 percent have confidence in big business. Less than half the population expresses a great deal of confidence in the public-school system or organized religion.
We have lost our gods, says Laura Hansen, an assistant professor of sociology at Western New England University in Springfield, Mass. We lost [faith] in the media: Remember Walter Cronkite?
We lost it in our culture: You cant point to a movie star who might inspire us, because we know too much about them. We lost it in politics, because we know too much about politicians lives. We have lost itthat basic sense of trust and confidencein everything.
As trust declines, so does Americans willingness to invest their money in the financial system. Our data show that trust in the stock market affects peoples intention to buy stocks, even after accounting for expectations of future stock-market performance. Similarly, a persons trust in banks predicts the likelihood that he will make a run on his bank in a moment of crisis: 25 percent of those who dont trust banks withdrew their deposits and stored them as cash last fall, compared with only 3 percent of those who said they still trusted the banks. Thus, trust in financial institutions is a key factor for the smooth functioning of capital markets and, by extension, the economy. Changes in trust matter.
Read more: Americans Are Losing Trust In All U.S. Institutions :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website
No comments:
Post a Comment