LAFAYETTE, La. (Map) - How did our economy come so close to collapse? How did we lose jobs, homes and retirement funds? Ordinary people are angry that they are suffering the grievous effects of the worst economic downturn since the Great Depression -- and they want an explanation about how it happened.

"They aren't getting answers from the big banks that created this mess, the ones that were bailed out with taxpayer dollars, and they aren't getting it from the government officials who were supposed to be guarding against this very disaster that has befallen us," MidSouth Bank President and CEO C.R. "Rusty" Cloutier writes on the book jacket in Big Bad Banks. "That's why I decided to write Big Bad Banks."

However, just weeks before Big Bad Banks hit bookstore shelves, former Federal Reserve Chairman Alan Greenspan did an about face. Speaking before the Council of Foreign Relations in New York on Oct. 15, Greenspan actually suggested breaking up big banks:

"If they're too big to fail, they're too big," Greenspan said, according to Bloomberg. "In 1911 we broke up Standard Oil -- so what happened? The individual parts became more valuable than the whole. Maybe that's what we need to do."

But where has America's "Economic Dictator," as Cloutier refers to him in Big Bad Banks, been for the past two decades? "It was pretty obvious to me from the get-go that Alan Greenspan had never met a big-time banker who he didn't like and had never met a small-time banker who he did like," Cloutier writes in Big Bad Banks. "With his deregulatory mindset he went about the business of making it easier and easier for his beloved big bankers to expand their franchises and become even bigger while making it more and more difficult for small banks to thrive and prosper."

Then, in a Nov. 6 Bloomberg story, another startling admission came from John S. Reed, who helped engineer the merger that created Citigroup Inc., which has taken $45 billion from the U.S. Treasury to shore up its finances. For the first time, Reed apologized for supporting the 1999 repeal of the Depression-era Glass-Steagall Act, which prohibited a bank holding company from owning other financial companies. He said lawmakers were wrong to repeal and replace it with the Gramm-Leach-Bliley Act on Nov. 12, 1999.

"We learn from our mistakes," Reed told Bloomberg. "When you're running a company you do what you think is right for the stockholders. Right now I'm looking at this as a citizen."

In Big Bad Banks, Cloutier points another finger of blame directly at Reed and Travelers Group CEO Sandy Weill, whom he calls "The Prince of Darkness." Cloutier writes, "In February 1998, Weill proposed to John Reed, the CEO of Citicorp, that they merge Travelers and Citi. Weill and Reed would serve as co-chairmen of the behemoth financial services company. There was, of course, a problem: such a merger was illegal on the face of it because it violated the Glass-Steagall Act, a law passed during the Great Depression that forbade a commercial bank (Citi) from owning or being owned by an investment bank (Travelers and its Smith Barney subsidiary). Congress isn't always the brightest group of people on the face of the earth, but legislators passed Glass-Steagall for a very good reason: The kinds of dealings it forbade were partly responsible for the devastation wrought by the Great Depression."

From his humble perch as a small bank president in Lafayette, La., Cloutier has seen this disaster shaping up for many years. "While the big bankers and government officials concoct elaborate theories about what happened -- theories that always seem to lay the blame on somebody else -- I can tell you right now what caused it: pure greed and ego," Cloutier adds.

In Big Bad Banks, subtitled How greed and ego among the big shots in banking and government created the crisis that wrecked our economy, Cloutier discusses the warning signals that went unheeded, the vast egos that drove the push for power and money at the expense of service to country and community, and the bad behavior that resulted. He also offers 20 specific recommendations that would go a long way toward restoring credibility to our financial system and avoiding the risk of future crises like this one. Among those suggestions is to break up big banks, requiring any financial firm with assets in excess of $500 billion to divest itself in order to reach a level of $500 billion or less within three years. Thereafter, the cap of $500 billion should be adjusted every five years to reflect the effects of inflation, Cloutier writes.

"My goal is twofold," Cloutier says, "for you, the reader, to understand what happened and for you, the citizen, to insist to your own bankers and lawmakers that it never happens again."

Big Bad Banks' Cloutier, a native of Morgan City, La., is a lifelong community banker. He was a director of the Atlanta Federal Reserve's New Orleans branch for six years and is a former chairman of the Independent Community Bankers of America. Over the past decade he has hammered the point that regulators, and in particular Federal Reserve Chairman Alan Greenspan, were complicit in the practices that allowed big banks to grow to the point where many believe they became too big to fail. When the current financial crisis took hold of our country, the trade association again called on Cloutier to represent the country's small community banks and their customers -- who have been damaged by the crisis through no fault of their own -- in numerous congressional hearings. Cloutier has worked tirelessly to convince Congress that big is not always better in banking and in no way justifies disregarding basic principles of lending.

In the spring of 2009 Cloutier held a series of 16 Town Hall-style meetings throughout MidSouth Bank's markets in Louisiana and Texas. Customers, community leaders and employees embraced the concept, turning out in large numbers to hear about the bank's proactive efforts to lend money to stimulate its local economies and to hear Cloutier's explanation for how the country got into this financial mess. Those efforts, combined with Cloutier's congressional testimony, shined a national spotlight on the issue of "Too Big To Fail." Cloutier was interviewed by CNBC, Fox Business News, ABC News, Bloomberg Radio and TV and The Dave Ross Show, and quoted by The Wall Street Journal and other national business publications. A Bloomberg reporter spent three days with MidSouth Bank executives during the Town Hall series, and in May 2009 The New York Times Magazine published a four-page feature, "Rusty Cloutier Has Money To Spare," which discussed the role of big banks in the massive collapse of our financial services industry.

The national media's interest in what Cloutier has been saying about how greed and ego created the crisis that wrecked our economy has generated substantial anticipation for Big Bad Banks. Through Big Bad Banks, the appalling behavior that shattered the nation's confidence will finally get the attention it deserves.

Early Praise for BBB:

-- "Rusty Cloutier is a knowledgeable and outstanding banker. When he writes a book, we should pay attention. Big Bad Banks is an excellent resource for understanding not just the latest banking crisis, but those that led to it as well." -- Fred C. Dent Jr., Louisiana Commissioner of Financial Institutions, 1987-1991 -- "Rusty Cloutier has the courage to write the book that needed to be written about the banking crisis of 2008-2009. Big Bad Banks is truly intelligence gathered at the front lines of banking. The time has come to lay the cards on the table face up, and Rusty does just that." -- Alex Sheshunoff, America's foremost banking consultant -- "While the causes and characters of the Great Recession of 2007-2008 will long be debated, we can get a unique insight into what happened from Big Bad Banks. A lot of powerful people won't like this book, but proponents of a better regulated financial system will find it a most timely read." -- Ken Guenther, former president and CEO, Independent Community Bankers of America -- "As a member of the U.S. Senate's Committee on Banking, Housing and Urban Affairs, I have often called upon Rusty Cloutier to provide his insight during many hearings before Congress. As an early opponent of the idea that some companies are 'too big to fail,' his positions served as a clear and early warning of the crisis that was ultimately brought to bear on America's banking system." -- Republican U.S. Sen. David Vitter, Louisiana

Big Bad Banks is due out nationwide on Nov. 12 and is now available for order at Barnes & Noble bookstores and at barnesandnoble.com, amazon.com, independent bookstores in Louisiana and Texas, and through www.bigbadbanksbook.com.

The views expressed in Big Bad Banks are solely the views of Rusty Cloutier in his individual capacity and are not necessarily the views of his employers MidSouth Bancorp Inc. and MidSouth Bank, N.A.