Execs, White House Rethink Regulation | NBC New York

Execs, White House Rethink Regulation

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    Twenty-one percent of 1,007 poll respondents said they had a positive view of large corporations.

    As Democratic support for President-elect Barack Obama's stimulus package picks up in Congress, politicians in Washington and members of the business community are starting to look toward the country's next economic hurdle: re-regulating the financial system.

    It won't be an easy task, and the manifold challenges regulators will face were thrown into relief in a recent Politico/Allstate poll that showed Americans deeply distrustful of both corporate and government institutions, and eager for a new wave of comprehensive regulation.

    At least for some executives, that's not necessarily an unpalatable prospect.

    "We need to have a comprehensive federal regulatory framework," said Allstate CEO Thomas J. Wilson. "It requires both the willingness to enforce principles but also the willingness to have a set of rules that applies to everybody."

    In the poll, taken in late December, just 21 percent of the 1,007 respondents said they had a positive view of large corporations. Just four percent said their view of large companies was very positive.

    Politicians in Congress fared somewhat better, but only in relative terms: 41 percent of respondents had a positive view of Democrats in Congress, but only 14 percent had a very positive view of them.

    The GOP trailed, with 24 percent of American voters saying they viewed congressional Republicans positively, and only five percent reporting a very positive impression of the group.

    The result is a regulatory playing field that has some corporate leaders sensing an opportunity to reprove their trustworthiness in the public eye.

    "My belief is we're entering a new era of social responsibility," Wilson said. "I think you see it in the recent election and I think you see it in the polling."

    According to Wilson, business executives have an opening to step up and show they can make difficult choices, sometimes sacrificing short-term profits for long-term corporate and societal gain.

    "I think there is a need to implement longer-term business practices that may involve trading off short-term profits for long-term economic growth," Wilson said. "Business leaders need to put their companies and employees ahead of themselves."

    If they don't, the President-elect - who registered strong positive approval ratings in the Politico/Allstate poll - may force their hand.

    In an interview last week with CNBC, Obama told reporter John Harwood that he intended to reorganize the country's regulatory infrastructure under a more streamlined agency or group of agencies.

    "We're going to have to look at this alphabet soup of agencies and figure out how do we get them to work together more effectively?" Obama said. "We've got to stop splintering functions in such a way that capital in one form is treated one way and capital in another form is treated in another way, because these days in global financial markets, they're all fungible."

    But Wilson warned that some politicians and executives would be reluctant to impinge on the current system's state-based regulatory mechanisms.

    "Many politicians won't want to go against the state-based regulatory framework," Wilson said. "Good things are hard to do and I think we need to take the approach that everybody should be in and nobody should be out."

    In addition, the insurance industry heavyweight suggested the government should pave the way for economic prosperity by investing in longer-term economic assets, like education and job training.

    "Give people tax credits for pursuing secondary education at this point in time," Wilson recommended. "I've never found investing in myself or in people has been a bad investment. That just seems like a slam dunk to me."

    In Politico's polling, 60 percent of Americans said stricter business regulation would be effective in improving the economy. Other measures Americans viewed as very effective were debt reduction, by 49 percent of respondents, middle-class tax cuts, by 41 percent, infrastructure and worker training programs, both of which 38 percent of Americans called very effective, and investment in community colleges, by 35 percent of respondents.