Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"That is certainly the attitude of many, that you don't bail out a person or bank for bad investments, and we really had that attitude ingrained in policy in the 19th century, but we found it can lead to problems. The economic system really rests upon the financial system. For our economic system to work, you need to have a place where people can safely and with confidence invest their money. At the same time, businesses and others go to that system to take out loans. If people do not have confidence in that system, they are going to horde their money, and the economic system simply won't work. So before we had the Federal Reserve, we had situations in our country where if the financial system were in trouble, people would simply stop using it, and there were no loans and no investment, and the economy really suffered. So we created the Federal Reserve as a backstop to banks, to go in and help individual institutions if they are having trouble, because those individual institutions really help the entire economy. This is a balancing act. You don't want to overdo it and create the incentive for banks to take unwarranted risks. But it is an important role that banks play, because they are the underpinning of the economic system."