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. Expat American

    Close the banks now or let them fail and the fat cats will just spend their bailout money on more fancy dinners with mistresses and plastic surgery for their unhappy wives. The human element will always pretty much ruin whatever theoretical financial solution that is put into place; no matter who is in office/power in Washington.

    March 9, 2009 09:17 am at 9:17 am |
  2. jim

    I don't usually agree with Shelby but in this case I couldn't agree more. The corruption and incompetence of these larger groups are what put us here in the first place. What do you want to do, keep paying more taxes to prop them up while they don't change their policies? Keep in mind how little they did to help the people they foreclosed on...or is the policy kick the "irresponsible family" out in the street but SAVE the "irresponsible institution"?? To h3ll with Citigroup and all the other big banks.

    March 9, 2009 09:18 am at 9:18 am |
  3. frank c.

    Why cant the senate stop the politics, and start doing something for the american people, what are they thinking.

    March 9, 2009 09:19 am at 9:19 am |
  4. Gordon Shumway

    Amen! Shouldn't have thrown away the first $700Billion, let alone the newer throwaway and all the giveaways. Redistribution of wealth won't work, because most of the donees won't work!

    March 9, 2009 09:20 am at 9:20 am |
  5. frank c.

    Why cant the senate stop the politics, and start doing something for the american people, what are they thinking.

    March 9, 2009 09:20 am at 9:20 am |
  6. Gordon Shumway

    Amen! Shouldn't have thrown away the first $700Billion, let alone the newer throwaway and all the giveaways. Redistribution of wealth won't work, because most of the donees won't work!

    March 9, 2009 09:20 am at 9:20 am |
  7. frank c.

    Why cant the senate stop the politics, and start doing something for the american people, what are they thinking.

    March 9, 2009 09:20 am at 9:20 am |
  8. Gordon Shumway

    Amen! Shouldn't have thrown away the first $700Billion, let alone the newer throwaway and all the giveaways. Redistribution of wealth won't work, because most of the donees won't work!

    March 9, 2009 09:20 am at 9:20 am |
  9. Ketan

    Yes it is the free economy. If they were allowed to do the free business, let them pay the price too. Why American people have to pay for the wrong doings.

    March 9, 2009 09:20 am at 9:20 am |
  10. Gordon Shumway

    Amen! Shouldn't have thrown away the first $700Billion, let alone the newer throwaway and all the giveaways. Redistribution of wealth won't work, because most of the donees won't work!

    March 9, 2009 09:20 am at 9:20 am |
  11. frank c.

    Why cant the senate stop the politics, and start doing something for the american people, what are they thinking.

    March 9, 2009 09:20 am at 9:20 am |
  12. Gordon Shumway

    Amen! Shouldn't have thrown away the first $700Billion, let alone the newer throwaway and all the giveaways. Redistribution of wealth won't work, because most of the donees won't work!

    March 9, 2009 09:20 am at 9:20 am |
  13. frank c.

    Why cant the senate stop the politics, and start doing something for the american people, what are they thinking.

    March 9, 2009 09:20 am at 9:20 am |
  14. Gordon Shumway

    Amen! Shouldn't have thrown away the first $700Billion, let alone the newer throwaway and all the giveaways. Redistribution of wealth won't work, because most of the donees won't work!

    March 9, 2009 09:21 am at 9:21 am |
  15. yuri

    Seventeen banks failed this year, hitherto, dear folks, and keep countin'. Lord help the economy, because most everybody is tryin' to do whatever he or she can. Hopefully, there shouldn't be any lookin' back, once we tide over these crises..

    March 9, 2009 09:21 am at 9:21 am |
  16. Seattle Sue

    The "Financial Wizard" John McCain has spoken again. How pathetic and delusional this old man is.

    March 9, 2009 09:21 am at 9:21 am |
  17. Ketan

    Yes it is the free economy. If they were allowed to do the free business, let them pay the price too. Why American people have to pay for the wrong doings.

    March 9, 2009 09:22 am at 9:22 am |
  18. Tom

    I like how McCain is suddenly against helping the banks, yet had to problem pushing for Bush's $800B bailout bill just a few months ago. Sorry Republicans. You had your chance to actually make the government smaller and reduce spending, for 6 years, yet you simply made it worse. Even though I enjoy hearing, and agree with their current stance against the bill, and the government in general, I'm simply not buying it. If I help put them back in power, not much will change. Your lip service is merely entertaining at this point.

    March 9, 2009 09:22 am at 9:22 am |
  19. Jesse Bechtold

    Allowing these large companies to fail would free up capital and people to start new ventures that are not burdened by years of failure and mismanaged risk. For capitalism to thrive we must allow-and encourage-failure, I believe the markets would reward the "creative destruction" of what doesnt work with capital and confidence to build on those failures.

    March 9, 2009 09:23 am at 9:23 am |
  20. James L.

    Right, then you should had voted that before "bailing them out". Is it me or are republicans truely living in DENIAL? Why did he not make this suggestion when Bush/Cheney were in office?

    March 9, 2009 09:24 am at 9:24 am |
  21. Laura, Boston

    That is it CNN!

    I submitted a blog and it was awaiting moderation per usual...and now it is gone!

    I'm going over to MSNBC...at least I know that my thoughts which by the way were not obscene or anything will be posted!

    March 9, 2009 09:24 am at 9:24 am |
  22. Sandy

    They realize they can't get around Obama's popularity unless he makes mistakes. If Obama's administration lets them fail, not only do we have more unemployment, but people will try to make a run for their money from the banks. Not all will be fdic insured and that will create a panic mode in which people want all their money from all the banks, even safe ones. There goes our credit and the government will be forced to print money which will cause inflation. Ever see zimbabwe in the news? 20 billion dollars doesn't even buy a loaf of bread. With things that bad, the country might just get desperate enough to vote for Limbaugh and republicans. I don't think any one of us wants things so bad that we have major inflation or to the point of seeing Obama fail because if we fail, we lose everything.

    March 9, 2009 09:24 am at 9:24 am |
  23. Mike

    Clearly, noone knows what to do or it would be done. Maybe Obama is letting everything fail so he can socialize the country. The GOP certainly laid the groundwork. What makes me think they are all in it together. They say something in front of the camera's then go behind closed doors to a wild party where they all laugh at our utter stupidity.
    Everyone should just stay home for a couple of days. That would get the ball rolling.

    March 9, 2009 09:24 am at 9:24 am |
  24. phoenix86

    I think its funny to see the democrats and liberals on this blog suddenly angry at some Republicans because they say the banks should be allowed to fail.

    These are the same liberals and democrats who screamed at these very banks for causing this mess.

    That, in a nutshell, is the problem with liberals and dems. They don't understand the issue but certainly shout, insult, and threaten to "do something".

    Funny.

    March 9, 2009 09:26 am at 9:26 am |
  25. Steve H.

    Yes. Insolvent banks should fail and not be propped up by the Gov't and the Fed. They are not "Too big to fail". There is also a precedent for the current situation we are in. Japan experianced almost the identical situation in the 90's and constant toying with interest rates and stimulus only worsened their recession and kept it going for almost 2 decades. The free-market has to be allowed to re-adjust and set interest rates where they should be based on supply and demand. Not artificially by the Fed and Gov't persuasion.

    March 9, 2009 09:26 am at 9:26 am |
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