Attitudes of Business Students on the TARP Program: A Semantic Differential Analysis

Article excerpt

The TARP program, a federal response to the 2008 financial crisis, has generated much debate both inside and outside of academia. Since business ethics, corporate responsibility, and public policy form the basic educational framework of the undergraduate business school curriculum, we investigated attitudes toward the TARP in the Spring of 2009. The sample, comprised of 57 undergraduate-level business students from a mid-sized public university in the deep South, responded to a semantic differential measure that rated the concept $700 BILLION BAILOUT. The results, based on a One-sample t-test, indicated that respondents expressed rather negative attitudes (1.5 SD above the mean) toward the TARP. The findings were discussed in light of the academic exposure that business students receive with regard to econometric theory, fiscal policies, government rescue packages, investment strategies, banking crises, corporate ethics, and the national debt problem. The impact of these issues on the attitudes of the contemporary business student was noted in an expository framework.

The Troubled Asset Relief Program (TARP) is a U.S. federal government program, signed into law by President G.W. Bush, on October 3,2008 (Public Law 110-343). This legislation was initiated as a major response to the sub-prime mortgage, banking, and financial crisis that hit its peak during the early fall of 2008. The TARP's major function was to purchase or insure up to $700 billion of 'troubled assets' on residential and commercial property mortgages, backed largely by U.S and international banks, to promote financial market stability. In short, the TARP allows the U.S. Treasury to purchase illiquid difficult-to-value assets from banks and other financial institutions (Cocheo, 2008). One major aspect of the program is to encourage lending to the consumer, small business owner, and large companies; thus restoring the flow of capital that is vital to a healthy, robust economy. The TARP underwent several revisions with the change in party government in 2009, but the basic objectives of the program were left intact (Lawson, 2010).

However, during the seminal phases of the program, the public became aware of several controversial aspects of the TARP (Ayon, 2010; Harvey, 2008). For example, some financial institutions were using the TARP funds for business purposes not intended in the spirit of the program, such as using TARP funds for strategic acquisitions or takeover activity. Overall, government officials are aware of the difficulties in implementing the program and many regulators are suspect of the TARP bailout's effectiveness.

Business Students' Views on Public Policy

A review of the literature indicates that the specific attitudes of business students was a rather neglected area of research decades ago, although several studies investigated student attitudes toward political issues, environmental concerns, and social responsibility (e.g., Aldag & Jackson, 1977; Benton & Funkhouser, 1994; Prasad, 1982; Willoughby & Keon, 1985). However, recent research has shown that the contemporary undergraduate business student is rather cognizant of civic responsibilities of elected officials and public service workers (Piotrowski & Guyette, 2009). At the same time, business students hold staunch ethical views with regard to how organizations and corporate leaders conduct business activity (e.g., Guyette & Piotrowski, 2010; Malone, 2006; Piotrowski & Guyette, 2010). To obtain a sense of some of the areas that have attracted the interest of researchers, Table 1 presents several studies over the past decade that reported on business student attitudes. Based on this recent attention on the views and opinions of business students, it would be of interest to investigate the attitudes of today's business students on the TARP program which has been a key topic of discussion in the national media as well as in classroom discussion across U. …