Icahn: 'Our Economy Is Breaking Down'

Financier Carl Icahn said the need for U.S. regulators to make depositors in failed Silicon Valley Bank whole points to the bigger issue of a lack of corporate leadership and accountability in the U.S. economy.

Asked by CNBC's Scott Wapner whether he viewed the bailout of uninsured depositors as a loss of financial discipline, Icahn said, "Our system is breaking down. We absolutely have a major problem in our economy today."

Icahn went on to discuss the absence of corporate leadership, especially in difficult economic times. Restoring faith in the banking system through the bailout of SVB sends citizens a message that there is no accountability for their actions, that the government will step in and save the day, Icahn said.

Important: Reagan’s OMB Director first warned of major debt and bank crisis to happen in 2023 in new bestseller, advises 4 ways to protect cash – See Emergency Details Here Now!

"You can't have the country feeling that it doesn't matter if they save," said the head of holding company Icahn Enterprises. "That they could spend all the money they want, they could do whatever they want, because the government will bail you out."

One of the reasons the capitalist system is breaking down "is that you don't have good corporate leadership," which is equally critical in both good and bad economic times, Icahn said.

If someone had put money in Icahn Enterprises (IEP) over the years and reinvested dividends, they would "earned an annual return of 15%," Icahn said. "The closest is Buffett, who, I believe, made 9%. The S&P made 7%."

"Why?" Icahn continued. "Because we go into companies and clean them up. There's so much to clean up, and as far as corporate governance goes, it's getting much worse now."

"The whole economy is breaking down," not because Silicon Valley Bank and Signature Bank depositors were bailed out, he continued, "but in the sense that our economy is breaking down."

The bottom line, Icahn said, is it is becoming hard today to "define [the] capitalistic system."

Important: Reagan’s OMB Director first warned of major debt and bank crisis to happen in 2023 in new bestseller, advises 4 ways to protect cash – See Emergency Details Here Now!