March 9th, 2009
04:37 AM ET
9 years ago

Some banks should be allowed to fail, say two top Republicans

'We bury the small banks -- we've got to bury some big ones,' said Shelby Sunday.

'We bury the small banks - we've got to bury some big ones,' said Shelby Sunday.

WASHINGTON (CNN) - Two top Senate Republicans said Sunday that banks shouldn't be able to count on any more bailout money - and that the federal government should let some of them fail rather than distribute further funds to keep them afloat.

"Close them down, get them out of business. If they're dead, they ought to be buried," Sen. Richard Shelby, the Ranking Republican on the banking committee, told ABC's This Week. "We bury the small banks - we've got to bury some big ones, and send a strong message to the market." He did not mention any banks by name, although he responded to a question about Citigroup by noting that "Citi's always been a problem child."

Former GOP presidential candidate John McCain told Fox News Sunday that he did not think President Obama "made the hard decision, and that is to let these banks fail." He did not call for nationalization of troubled financial institutions, which many Republicans oppose, but said their assets should be sold. "Unfortunately, the shareholders and others will take a beating," he said.

Filed under: John McCain • Richard Shelby
soundoff (417 Responses)
  1. A tired American

    I like the GOP's idea for poorly performing banks except for one thing: what happens to the over-paid bank executives who oversaw the failures of their banks?
    Bank employees will lose their jobs. Shareholders will lose their investments. The FDIC (taxpayers) will have to cover losses to account holders. What will the bank executives lose?

    March 9, 2009 05:06 am at 5:06 am |
  2. Kevin Austin

    I agree all banks can't be bailed out!

    March 9, 2009 05:14 am at 5:14 am |
  3. A tired American

    March 9th, 2009 5:16 am ET
    Your comment is awaiting moderation.
    Precious March 8th, 2009 6:34 pm ET
    "Wow! things were good until late 2007. What happen after that? Where did we go wrong? People sure weren't complaining for seven years (2001-2007)? What happened? Who took over in 2007?"
    Wrong!!! Things only looked good back then. Actually the rot was already in the heart of the economy, but the government agencies who were supposed to oversee the banking sector were otherwise occupied.
    Don't try to blame this on the Democrats taking over Congress. We are not that stupid!!!

    March 9, 2009 05:17 am at 5:17 am |
  4. Bruce

    The only reason most Democrats in here think it's wrong for the banks to fail is because a Republican said it. If it were a Republican in the White House and wanted to bail the banks out, they would want his head. What a bunch of two-faced people the Democrats are.

    March 9, 2009 05:29 am at 5:29 am |
  5. John McCain is a Bitter Loser!

    John McCain has nothing positive to say about President Obama. WOW – what a sore loser you are John McCain!!!!!

    This is exactly why you and your republican party are yesterday's wash out news. Bitter and empty in the solutions department.

    March 9, 2009 05:30 am at 5:30 am |
  6. Eloise

    Sure nationalize the banks... and see where it leads us! One step closer to socialism. This is what America needs to be on the lookout for people. To Obama and the Dem cronies... there is no such thing as temporary nationalization, they want it permanent and they want it now. Just you watch...

    March 9, 2009 05:43 am at 5:43 am |
  7. CJ in FL

    You people are still playing partisan pool.

    Can you address the issue without regard to party...or does your intelligence not allow for complex thinking?

    March 9, 2009 05:45 am at 5:45 am |
  8. Mike

    On the other hand....Can we just bail out the banks and reward the bankers for being idiots? Maybe we can't let these 'big' banks fail but we should be asking for the resignations of the executives at the top. Otherwise they will just give themselves big fat bonuses for screwing the American people out of $billions.

    March 9, 2009 05:46 am at 5:46 am |
  9. JL

    if anyone doesn't believe these clowns haven't converted their money to gold...your dreaming.

    I got a real bad feeling about this week coming here's the "cliff" folks....

    Get behind your new president NOW..

    you had your chance to lead.

    March 9, 2009 05:50 am at 5:50 am |
  10. Hopeful

    I am amazed at the Ignorance, Arrogance and the Hypocrisy
    Sounds a lot like " Let them eat cake"

    March 9, 2009 05:58 am at 5:58 am |
  11. Tom in Delaware

    The Textile Industry, the Shipping Industry, the Steel Industry, and the Airline Industry were all 'allowed' to fail and somehow the economy survived, so why should the Auto-makers who didn't give a crap about the needs or wishes of the people, or some greedy banks and other poor investors not be allowed to receive the nautral consequences of their actions.

    Why are we enabling this dysfunctional behavior?

    Citibank is one of the first banks to have kowtowed to the ACORN protestors and shelled out sub-prime loans to people who could not afford to pay them back, only to have them 'picked up' by Fannie and Freddie.

    Let them fail and stop giving out sub-prime's the only way to stop the bleeding.

    You can't solve the sub-prime mortgage crisis if your still handing out sub-prime loans.

    March 9, 2009 06:14 am at 6:14 am |
  12. Joe

    Wasn't Bush the one who bailed out these banks in the first place, and was into socialism? Wasn't that all before Obama was in office?

    March 9, 2009 06:15 am at 6:15 am |
  13. Truth

    This guy should shut to hell up.

    March 9, 2009 06:21 am at 6:21 am |
  14. ROC

    As a former republican, and although I disagree with some of Obama's recent policies, I fully support the president's decisions and I stand proudly behind his administration.

    Before talking about burying banks, Shelby should perhaps talk burying himself - he has always been in charge of the Senate Banking Commitee!!! Be a man and take responsibility your own failures senator!!

    March 9, 2009 06:30 am at 6:30 am |
  15. Republican for change

    "Close them down, get them out of business. If they're dead, they ought to be buried"

    I agree senator...on the remaining pockets of insurgents in the GOP party.

    March 9, 2009 06:44 am at 6:44 am |
  16. Alice Newman Center Harbor NH

    Quick Question: Were these two same Republicans saying "let 'em fail!" three months ago when the Bush Administration was bailing the financial system out?

    Or is GOP hindsight so much better than their foresight?

    March 9, 2009 06:46 am at 6:46 am |
  17. frank c.


    March 9, 2009 06:53 am at 6:53 am |
  18. Matt

    This is exactly why the republicans are lost and not to be found. I used to gravitate towards the right side but republicans are so out of touch and irrational it is no wonder they are losing elections left and right. It is too late to shut these big banks down and much as they deserve to be. The government has already dumped too much money now to give that up and not to mention the more people to lose jobs and the thousands of people and businesses that have above the fdic cap invested. Oh, and by the way, that safe bond fund you invested in, well now that will be worth 80 cents on the dollar because of how much citi dect will default. The consequences are just to big.. The real time to move would have been to STOP these banks from becoming too big to fail. Where was congress then???? Oh yes, they were cashing big bank lobby checks... hmmm.

    March 9, 2009 06:54 am at 6:54 am |
  19. Stu-Florida

    Greed, lies and collusion have always been an American staple.
    These banks need a strong message that they cannot keep we, who keep them alive, prisoner of their tactics and interest rate increases. They pay out a pittance in savings and CDs while sticking it to us with 10, 15 or even 30% interest rates if you're a couple of HOURS late in paying... PLUS a "late fee".
    The same with the automakers who keep sticking it to the consumer for the sake of the UAW and all of the problems they have created. Let 'em fail... let 'em get rid of the UAW, if they won't make any concessions. They've had their place in history!

    March 9, 2009 06:59 am at 6:59 am |
  20. Luis Villanueva

    McCain....please stop your bickering, still angered about your defeat? If you really want this country to prosper lead your party and get on with Obama so all the problem will be solve not by opposing it. Everybody knows in the GOP party that you guys should have had a good stratedy during the election but, OMG let the past be the past and start working for the good of the people and not about your pride. Why, do you think if you had been elected you had this country rolling in 46 days? I don't think so.
    Telling everybody to let a bank fail is just not so professional...The congress and most of the GOP did not do enough about transparency and regulation about all these mess and it was the GOP who was on the helm when all these started. You all, GOP and DEMS should grow up together and take the responsibilities that was given to you by the VOTERS! Enough of these childish acts.

    March 9, 2009 07:03 am at 7:03 am |
  21. D Bama

    hindsight I am Not happy with Mr Shelby's approach to this whole situation – I help put him in office but I will not mark that box come next term. We need solutions and new voice.

    March 9, 2009 07:09 am at 7:09 am |
  22. Doug

    Only the strong survive. When one or two go down the rest will clean up their houses. Citigroup should go down.

    March 9, 2009 07:19 am at 7:19 am |
  23. Jim

    (1) The lemmings from both political parties remind me of Monty Python's "I want to have an argument" skit. (2) I am amazed at the lemmings' general lack of intelligent info (e.g., AIG is not a bank – it's an insurance company that insured bad bank investments), but I realize that's partly what makes them lemmings in the first place. (3) An orderly restructuring of Citi through Chapter 11 will result in a leaner bank, not somthing that just closes its doors. The last move by the US govt to trade preferred shares for common shares sounds like that's where we're headed because the govt can now use its voting shares of stock to make that happen.

    March 9, 2009 07:19 am at 7:19 am |
  24. Luis Villanueva

    To Mr. Shelby...
    What was your position again? Well, I think you should be fired for letting these bank go bankrupt and let your compadre McShame retire too, he is not for the poor and mostly not for African-Americans. Remember when McShame tried to oppose the MLK holiday? Hmmm, and now you you all are using this Steele guy to attract African-American voters? LOL. this is really funny.

    March 9, 2009 07:28 am at 7:28 am |
  25. Christopher W. Mannoia

    I agree with letting some of the banks fail; but, isn't it something how old Mac keeps sticking it to the President even though he promised to work with him?

    Obama '12

    March 9, 2009 07:33 am at 7:33 am |
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