Local banker brings foreign news crew to Houma Rotary

MidSouth Bank President Rusty Cloutier has become a fierce critic of the banking system that led to the current national financial crisis. After writing a book and testifying before the Financial Crisis Inquiry Commission, Cloutier has even attracted international attention for his views on the shortcomings of our financial institutions.

A German television news network called ARD was in Houma this week tailing Cloutier as he went about his business, including a speech at Wednesday’s Rotary Club meeting. Cloutier caught the eye of Klaus Scherer, ARD’s Senior Correspondent in Washington, D.C., because of his fierce contrast to major banks like Citigroup and Bank of America at federal hearings about last year’s banking meltdown.

Scherer will use footage from Cloutier as part of a long-format news package designed to get a look at American politics outside of Washington.

“We take Washington news, but fill it in with what we call ‘real life’ and ‘real country,’ outside of the Washington bubble,” said Scherer. “The mood in the country, contradictions that an audience in Germany can compare with their own daily lives: that is what, from our perspective, the audience is very thankful for. We leave Washington and talk to ordinary people, because that’s what they are too. They want to know how big politics affect people, how emotions kick back.”

Cloutier, a community banker and native of Morgan City, said the problems leading to the finance industry meltdown were not a problem of a single party, but part of a systemic lack of regulation.

“We went through a crisis that I truly believe brought this country to the brink of insolvency. We think we’ve solved the problem by throwing a lot of money at it, but we have not,” Cloutier said. “I love when people say we need more regulations. Name me one company that was indicted during the last financial crisis. Not one. They just ignore them. When you’re too big to fail, you’re above the law.”

Ultimately, Cloutier said that bailing out the large banks was a necessary act, despite his disdain for them. The problem, said Cloutier, was letting them get big in the first place. Now, he recommends breaking up larger banks so they can’t be too big to fail.

“It’s time to break them up. We did it to the monopolies in 1911 with Standard Oil and all of them, and that’s we need to do. Absolutely. And all this talk that we’ll regulate them won’t make a difference,” said Cloutier.

The American banking crisis and the subsequent political fracas has been perplexing to the German people, said Scherer. His goal is to help the German people understand a foreign crisis that sharply impacts them.

“Germans thought for a long time this was an American thing, and they had to learn that it wasn’t. We have also the deepest crisis since World War II,” said Scherer. “What we learned is that on a higher level, an international level, the financial system is so connected that even German countryside administrations had taken money to build some city facilities that was linked to American mortgage packages without knowing it. So the downturn affected them too.”

Obama, who is much more popular in Germany than his predecessor George W. Bush, has not been effective at implementing his policy. After Obama’s sweeping electoral victory, many in Germany don’t understand why he has not been able to implement some of the change he was elected to bring.

“There’s a thinking in Germany, and maybe even here, that the president can snap his fingers and make everything into law, and they forget about Congress. They’re more aware of that here, but abroad, there’s no awareness about that,” said Scherer. “The feeling in Germany is ‘what is going on in America?’ They voted for [Obama] to bring change and now, it looks like they hate him. So they feel like, ‘did we miss something?'”

Klaus Scherer (center), a reporter from German television network ARD, interviews local banker L.J. Folse to get his reaction to Rusty Cloutier’s speech. Tony Gonzalez (right), who works for ARD’s Washingon Bureau, filmed the interview. * Photo by BRETT SCHWEINBERG