Video – MidSouth Bank President: “Free enterprise has to have the right to fail”

June 21, 2009 by · Leave a Comment
Filed under: Videos 

Editor’s Note: Karl over at Market Ticker ran this video titled “Not All Bankers Are Liars”.  I watched it and I do think with his credentials, Rusty Cloutier has advice about this current subprime (note: subprime as in all instruments  involved) financial crisis that carries merit.  He talks about the free enterprise, market system and how you have to let the downside effects happen and I assume the upside as well.  Rusty and Karl are correct that certain legislation’s that were in place to prevent systematic risk, are at the heart of this problem.  Also, with Rusty being a former Federal Reserve Boardmember, he would understand how monetary policy does affect the outcome in the “real” economy.  We need a fair system that has basic rules that are to be enforced.  If you don’t like a rule, then lobby to change it and it is our obligation to be able to make a case against an obvious “bad” rule.

We also need to let companies fail to set precedence so over time these types of events do not continue to happen.  Its not our job to try and prevent anything bad from every happening, because that would become to restrictive to capitalism over time.  It would smother innovations because the fight would be to costly.  So if we do not take that course, then I propose that we create the framework for all actors to play in and enforce the rules every time so we get the desired effect.  Only then you can look back at the data and debate if that “was” the correct course of action and possibly make another decision in the future.  This is a cycle that helps move us forward.  What do you think?

CNBC Video:


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