If failure is the outcome of the new financial regulations that President Obama announced today, then I'll consider it a success.
Let me explain. I'm not saying that I hope Obama's plan fails. Nor am I hoping that it causes financial institutions to fail. What I do hope though, is that it achieves its goal of creating a framework where financial firms are able to fail.
The recent financial crisis has seen AIG
AIG, meanwhile, has been sucking government funds into its gaping maw. While Lehman Brothers, rest its soul, brought fire and brimstone down on the marketplace when it slid into chapter 11 bankruptcy. And let's not leave Citigroup
Other major financial firms -- from Goldman Sachs
In the end, we don't want to demonize risk. After all, it is risk, the entrepreneurial spirit, and, yes, greed that have helped make our economic system so great in the first place. But if nobody ever failed when taking a risk, it wouldn't be a risk, now would it? So my hope is that Obama's plan will help make sure failure is no longer a four-letter word.
What I've seen so far looks promising. There will be new regulations to help ensure firms don't turn themselves into dirty bombs set to nuke the entire financial system if they fail. At the same time, there will be a new focus on making sure there are plans ready to quickly resolve major failed financial firms so that they don't poison the water.
There's often a yawning chasm between ideal outcomes and government regulations, so only time will tell if this plan will lead to a better system or just a bureaucratic mess, but I've got my fingers crossed.
Fool contributor Matt Koppenheffer owns shares of American Express and Bank of America, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool. The Fool’s disclosure policy has never once been caught with its pants down. Of course, it doesn't actually wear pants …