March 9th, 2009
04:37 AM ET
6 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. BJ

    No more bailouts!

    When is this administration going to learn that no matter how much money you throw at the problem, the free market system is going to make some businesses winners, and some are going to be losers.

    March 9, 2009 08:27 am at 8:27 am |
  2. Mitchell from MS

    THIS IS WHAT HAPPENS WHEN YOU ELECT A FRESHMAN SENATOR WHO SPENDS MORE TIME WRITING BOOKS AND RUNNING FOR PRESIDENT THAN ACCTUALLY BEING IN THE SENATE AND LEARNING HOW TO ACTUALLY HELP RUN A COUNTRY.

    YOU DEMS ARE GETTING WHAT YOU DESERVE AND IN 2010 AND 2012 I THINK THE MODERATES AND INDEPENDANTS WILL VOTE FOR THE GOP BECAUSE BO HAS SCREWED UP SO BAD!

    March 9, 2009 08:27 am at 8:27 am |
  3. P

    March 8th, 2009 7:04 pm ET

    My career was spent in the financial services industry and I was in Washington for many years meeting with both the Senate and House Banking Committees.

    Republican Senator Shelby has been in charge of the Senate Banking Commitee for the past decade. WHERE WAS HIS LEADERSHIP WHILE THESE BANKS WERE RUNNING WILD WITH IDIOTIC BEHAVIOR? He was getting rich so he said nothing.

    AS BANKING LEADER SHELBY DID NOTHING AND SAID NOTHING AND NOW HE IS REFUSING TO ACCEPT RESPONSIBILITY FOR HIS LEADERSHIP FAILURE – How Republican to make the mess and then point fingers when it all falls apart!!!

    SHELBY SHOULD RESIGN FROM THE BANKING COMMITTEE.

    President Obama is trying to decide with INTELLIGENT AND RESPONSIBLE people what is the best plan to deal with the banking crisis.

    We would be better off to nationalize banks like Citi on a temporary basis – get rid of the bad debt and bad management – and then put them back into the private sector under strict regulation and oversight.

    Republicans have caused enough job loss – closing banks is not the answer. Of course – what answers do Republicans have to ANY of our economic disasters?????

    I TOTALLY AGREE, temporary nationalization!! There are some who say the shareholders will be wiped out out, but wouldn't bankrupty acheive the sane effect? Nationalization would save those jobs (hopefully), and we still have competetion, which keeps prices at reasonable levels. If they fail, we have LESS competition among large banks, and we all pay higher prices in the long run, b/c they have a semi-monopoly on the market share.

    March 9, 2009 08:28 am at 8:28 am |
  4. Bill

    The last people we should be listening to are the republicans. Was it not them who got us into this mess? There solution to the current crisis is to let everything fail. The auto industry, banks, whatever is troubled let them fail is there solution. Yeah, that's a good plan, good leadership McCain, GOP, did Rush Limbaugh come up with this one?

    March 9, 2009 08:29 am at 8:29 am |
  5. Hypocrisy is a Democratic Trait

    Shelby was not the Senate Finance chair for the past 2 years – Dem Senator Dodd was. And it has been the Democrats who have controlled the legislative agenda for 34 of the past 40 years with a House Majority – and MA Congressman Barney Frank has been the House Chair of the Finance Committee for most of those years. So the Dems are the ones who have been in charge, And for the record, the three largest recipients of contributions from Fannie Mae for past two years has been Barney Frank, Chris Dodd, and Barack Obama. And for the record, the Fannie Mae program to extend housing to people who could not afford it was a Democratic concept. They created the sub prime scandal, and they fought oversight over Fannie Mae and the banks for years.

    Obama will go through 4 years and his mantra will be – I inherited this – it is not my fault. This is not the type of President we need – someone who has all the excuses but none of the answers. – someone wgho votes "Present" like when he signs the ear mark filled omnibus spending bill And it is the Democratic House who has gotten us into this mess. By the way, while the Democrats have had a majority in the House for 34 of 40 past years, those 6 years when they did not control the House, they had a Dem in the White House. Hypocricy – Greed – Deceit – Misdirection – Excuses – Lies - Slander - these are the hallmarks of the Democratic part

    March 9, 2009 08:31 am at 8:31 am |
  6. TCM

    You liberals are the idiots....who do you think is paying the funds to the banks that were irresponsible? YOU ARE!

    Obama's brainwashed you libs to the point that you think SOMEONE ELSE is paying.....we're paying! How stupid can you people be....oops...I forgot, you VOTED to impose this self-inflicted wound

    March 9, 2009 08:33 am at 8:33 am |
  7. Patrick Manley

    Shelby is dead wrong. Letting even one more bank fail resulting in more pensions and savings lost by shareholders and further eroding confidence is exactly what should not be done.

    Like it or not, the economy begins and ends with banking. To revive the economy, its time to stop blaming banks The White House must absolutely guarantee that not one more bank is going to fail and not one is going to be nationalized. This alone will bring investors back into the stock market as a whole, but more importantly, save the thousands of Americans whose pensions and savings will be wiped out if more banks are allowed to fail.

    Shelby and Barney Frank are merely trying to deflect blame solely to the banks, when Frank himself is probably the one person that can be blamed the most for the banking crisis.

    March 9, 2009 08:33 am at 8:33 am |
  8. cole

    Based on recent performance, and particularly during last year's campaign, I think the best policy might be to listen to whatever GOP leaders have to say about the economy and then do the exact opposite. Things could only get better. Seriously, does anybody really have any confidence in what the GOP says we ought to do about the economy? Their best strategy mnight be to shut up and let things happen...one way or the other.

    March 9, 2009 08:34 am at 8:34 am |
  9. Unshrub

    Hypocrisy is a Democratic Trait:

    When you correct people you should make sure you have your facts correct.

    March 9, 2009 08:34 am at 8:34 am |
  10. NewBlueRI

    As if we should take ANYTHING the sorry excuse for a human being Shelby says! And to Mitchell from MS, just 2 words: KEEP DREAMING!

    March 9, 2009 08:37 am at 8:37 am |
  11. Republicans display Hypocricy - Greed - Deceit - Misdirection - Excuses - Lies — Slander

    This is something we have lived with for twenty years and not 4 years, republicans have ruined this nation and we must now do our best to pick up the peices and try to move in a more solid less 'greed is good' direction, we are all at fault for electing Bush to 8 years

    what a nightmare he was and is

    March 9, 2009 08:38 am at 8:38 am |
  12. redleg

    Why shouldn't the shareholders take a beating? The owners of a business bear the ultimate responsibility for its operation. The Board and officers work for them.

    March 9, 2009 08:38 am at 8:38 am |
  13. Unshrub

    Don:

    Stay focused! I understand that as a republican you have talking points you must get out, but the subject is not about Ted Kennedy.

    March 9, 2009 08:39 am at 8:39 am |
  14. John

    Conservatives crying about Fannie may sound lik ecomplete fools. Those arguments only work on each other, not on reasonable informed people. You grasp at any chance to make an argument tht sounds even remotely beleivable, juts to deflct the blame. Today's GOP remains the party invested in the failure of America.

    March 9, 2009 08:40 am at 8:40 am |
  15. Dave

    Tom, do you even know what populism is?

    PLEASE STOP LEAVING COMMENTS IN CAPS IT MAKES YOU LOOK LIKE A FOOL, ESPECIALLY WHEN YOU HAVE NOTHING RELEVANT TO SAY.

    March 9, 2009 08:42 am at 8:42 am |
  16. alvino

    Under Bush, the market went from almost 15000 to 7500 in less than a year before it rebounded to 8000 in November. That destroyed my 401K. What little money I have left is securely located in a Bank of America account, and Shelby wants it to fail. I won't even be able to have access to that money.

    I am beginning to think that Shelby is not bright.

    March 9, 2009 08:44 am at 8:44 am |
  17. ST

    You know it easy for people to say 'let them fail' of 'no more bailouts', but there is a bigger picture. Do you know how many jobs would be gone if the auto industry and big banks fail? Well, I do. MILLIONS. People need to think before they say such things. Look at the bigger picture and put down the blinders.

    March 9, 2009 08:45 am at 8:45 am |
  18. cnnnewser

    The republicans love failure....so, is anyone surprised by what this man says?

    March 9, 2009 08:47 am at 8:47 am |
  19. BK

    I find bailing out billionaires repulsive. Greed and short term profits lead to this mess. Let the free market take its toll, let those who made bad investments fail instead of rewarding and perpetuating the problem. Failure for one is opportunity for another...may the strongest survive.

    March 9, 2009 08:47 am at 8:47 am |
  20. Sue

    If the rich and greedy continue to take our bail out money hat in hand, tout about making profits last year, and then turn around and ask for more money... something is seriously wrong, and these businesses should be allowed to FAIL so newer, up-and-coming businesses should be able to compete free of old and greedy and tired dinasaur competitors.

    March 9, 2009 08:49 am at 8:49 am |
  21. Tony

    AGREE!!!!

    Some of these banks went out and made risky loans and have BAD management and need to go down and the owners be held accountable.

    Government IS NOT the answer!!

    March 9, 2009 08:51 am at 8:51 am |
  22. Bill, Bloominton IL

    I wish they had thought about this the first time around and we would have saved lots of money.

    March 9, 2009 08:52 am at 8:52 am |
  23. JB

    To hypocrisy is a democratic trait:

    You are 100% correct, and every dem should read your post. Barney Frank and Dodd are responsible for this mess, and the dem attemt at deflecting by saying ":george bush is evil" accomplishes nothing. Look at the facts, this is not republican driven. But, dems will try to ignore facts as ususal.

    By the way, I see a black monday today! We will learn in 40 minutes.

    March 9, 2009 08:52 am at 8:52 am |
  24. John ernst

    Amazingly enough I think the obstructionist Republicans are actually making sense. They seem totally focused on regaining power but in this particular instance Senator Shelby is correct. If an individual acted like the banks or auto industry, refusing to make changes to improve performance, he/she would be in bankruptcy court. Continuing to give these institutions public money is throwing good taxpayer money in the toilet.

    March 9, 2009 08:52 am at 8:52 am |
  25. Rick from Murfreesboro, TN

    Again, this is the end result of Ronald Reagan's voodoo supply side economic theories. The time bomb that he started during his administration with tax breaks for the rich and deregulation of the banking and savings and loan industry has exploded and we now should all see the complete failure of his ideas. McCain and the other Republicans are neck deep in this. Their blind allegiance to a failed actor and his idiotic policies has led us and the rest of the world to this sorry state. The Bushes, father and son, continued these failing policies and are just as much to blame. Yes Mr. Obama has inherited a mess left by the previous administration. Yet all we hear from the Republicans is for us to listen to them and continue marching off the cliff to their tired old songs. Mr. Obama is trying to turn things around, If the Repulicans can't help then they need to shut up and get out of the way.

    March 9, 2009 08:55 am at 8:55 am |
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