March 9th, 2009
04:37 AM ET
5 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. Sue

    So the man who suspended his Presidential campaign to rush back to Washington to GIVE the banks the first money now thinks that Obama must make the "hard decision." Typical republican thinking...I don't have the guts to do it, but I can sure tell that evil Democratic President exactly what do do...

    I said all along that if McCain had stood by his proclaimed principles and voted against the bailout, he would be President. Too little, too late, John.

    March 8, 2009 05:13 pm at 5:13 pm |
  2. jj

    This republicans PR should stop now!

    March 8, 2009 05:14 pm at 5:14 pm |
  3. Dayahka

    Jeez, the Republicans are on a roll with two good ideas today–let GM fail, and now let some of the banks fail. The only disagreement here would be–let ALL the big banks fail. No more money. And they should have said not only let them fail, but they should also have added–arrest, try, and incarcerate all top management of these banks because they are all crooks, and bring Paulson back from wherever he's hiding out to answer some serious questions about how he distributed money to his friends, for he too belongs behind bars. There are numerous very good and responsible banks and credit unions that will survive and be able to take over the management of finances for the country–and we don't need any of these monstrosities with their gargantuan appetites for fraud.

    March 8, 2009 05:16 pm at 5:16 pm |
  4. cnnnewser

    The republicans would rather see major banks fail than give them loans – wonder if they have their dollars in offshore bank accounts?
    The republicans want GM to fail, the banks to fail, and President Obama to fail... what does this tell you about the republicans....

    March 8, 2009 05:17 pm at 5:17 pm |
  5. Zion

    That's why you guys are not in the majority. Republicans do not get it. Yes, I agree that many of these companies behaved irresponsibly. We can all agree on that. The problem is bankruptcy for huge corporations is alot different than an individual filing for bankruptcy. I hate to see our tax dollars bailing out these irresponsible guys, but unfortunately, their fates are tied to millions of American workers who had nothing to do with the company failure, and would be victims.

    March 8, 2009 05:19 pm at 5:19 pm |
  6. Lisa, Las Vegas NV

    If it were as simple as closing the doors on the banks, I'm sure it would have been done. However, Letting them fail would mean thousands of jobless people and on down the line. The Republicans know this. The people at the top of these institutions have been stealing money hand over fist via fees, feign investments on Wall Street, etc. Of course they want the banks to fail so that their dirty little secrets don't come to public view.

    March 8, 2009 05:21 pm at 5:21 pm |
  7. george

    Speed bankruptcy, FDIC receivership, whatever. This is clearly the correct path and the sooner we recognize it the better.

    using the word nationalization just confuses the issue.

    There is no upside for taxpayers to seize.

    March 8, 2009 05:21 pm at 5:21 pm |
  8. Pat CA

    Bill March 8th, 2009 3:01 pm ET
    This is the first thing anyone in he Republican party has said that makes sense in a very long time. To bad they didn't stand up for these principles a year ago. We could have saved 700 billion dollars and be on our way out of the recession.
    ----------
    This whole mess started with the mortgage meltdown in 2006-2007, perpetuated by the irresponsible financings by Freddie and Fannie. Republicans warned in 2002 that Fannie and Freddie were heading for the toilet, but Barney, Chris, and other Dems in Congress shouted them down. McCain warned them again in 2006 - google his letter to Congressional leaders.

    March 8, 2009 05:23 pm at 5:23 pm |
  9. bb

    I'm the first to admit I don't have a better idea but I have at least three major concerns. First, by what standards does the government decide which banks are insolvent? Under mark-to-market we probably have far more insolvent banks than current institutions can process. Second, won't speed bankruptcy for some banks prevent the recapitalization of others, leading to contagion effects and perhaps even collapse of the entire banking system into speed bankruptcy? Third, the real question is what the government will do with *non-depositor* creditors to the banks. Not paying them off means more contagtion but paying them off costs probably trillions. I think it is unwillingness to face that expenditure, not the lobbying power of banks, which prevents this outcome from coming about.

    It's time for Shelby to stop politics and be real!

    March 8, 2009 05:24 pm at 5:24 pm |
  10. william

    I believe that bank nationalization is now very likely. It may even be desirable

    March 8, 2009 05:31 pm at 5:31 pm |
  11. cph9680

    They should. Wells Fargo should be the first to go. They've stole $400 from me, if they can't turn a profit even after stealing from people, then they're screwed.

    March 8, 2009 05:32 pm at 5:32 pm |
  12. Had It

    This whole thing is a diversion to keep our minds off of the Billioins that were "lost" and "unaccounted for" on some of the no bid contracts set up by Bush/Cheney. This keeps people from continuing to ask for investigations into that. Wonder where our money really went --–

    You people are not looking at all the pieces of the puzzle.

    March 8, 2009 06:02 pm at 6:02 pm |
  13. kelly WI

    How strange....I heard some dems on the talking heads shows this morning saying the same thing. Wonder why CNN doesn't quote them. ?

    March 8, 2009 06:26 pm at 6:26 pm |
  14. Kingkang

    A beating!?! Citigroup is already at $1. How much more of a beating do you need?

    March 8, 2009 06:29 pm at 6:29 pm |
  15. JSU-TIGER99

    The Republicans would say something like that since they are the ones to blame for allowing them to do what they wanted to do for the last 8 years given loans to people who was not able to pay them back in the first place. The banks they want to fail are not in their districts so do not care which ones it be they just want them to fail when the pupm $350 billion dollar into all of these failing company.. IDEA WHY NOT GIVE ALL THE HARD WORKING PEOPLE SOME MONEY,YOU HAVE MONEY TO KEEP GIVEN ALL THE CEOS BUT NONE FOR THE LITTLE MAN WHO IS TRYING TO STAY ABOVE WATER.

    March 8, 2009 06:29 pm at 6:29 pm |
  16. Matt, Canoga Park

    Survival of the fittest. That is the nature of the beast. Stepping in and saving useless banks with bad management staffs is not the right answer. Let them fail. The good ones will survive.

    March 8, 2009 06:32 pm at 6:32 pm |
  17. Proud American

    Typical Republican their failures now they want everything around them to also fail. Mom was right " Misery Loves Company"

    March 8, 2009 06:33 pm at 6:33 pm |
  18. fearful for my country

    Citibank is trying to stay afloat by chargring credit cart holders with 700 plus scores 28% interest. They are crooks! Let them SINK!

    March 8, 2009 06:34 pm at 6:34 pm |
  19. Precious

    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?

    March 8, 2009 06:34 pm at 6:34 pm |
  20. Sean Chong

    This is nothing new. You're talking like you're the experts. Several banks have already failed. The biggest challenge of letting banks fail.... the government needs to pay the depositors their money up to $250,000 now, and the government needs to clear up the mess. Will this cost less? Maybe. But jail Henry Paulson first.

    March 8, 2009 06:38 pm at 6:38 pm |
  21. Bud in NC

    Oh my gosh. The beat goes on. If Obama let these banks fail, the jumping fleas like shelby would be sceaming at the President to not let any banks fail.

    If the President looks this this way, they look that way; if he looks that way, they look this way. What phonies.

    Mr. President. pay no attention to partisan JERKs like Shelby and his ilk. Pay attention to US, the hard working MAJORITY of Americans who love this country.We need YOU. Not some lunatics.

    March 8, 2009 06:42 pm at 6:42 pm |
  22. Dennis

    Most of the republican members of Congress did vote against the Bush bailout in October. They are correct now. Let the bad banks fail.
    This won't hurt the economy any more than it has already been damaged by the greed and incompetence of the banking industry.

    March 8, 2009 06:44 pm at 6:44 pm |
  23. bk

    It appears that some of the Dems in congress have finally started thinking on their own, instead of following like the rest of the sheeple. Even some of the Dems know that Obama's policys are wrong. I have never seen people refuse to use their own brain to see whats going on. He is spending us into bankruptsy. We do not have the money and the dollar will be worth zero. All the money has to be paid back and thats means higher gas taxes, higher electric bills, and anything else he can think of to tax. Think people think

    March 8, 2009 06:44 pm at 6:44 pm |
  24. allan

    I vote for McCain, but i m glad he lost. Now i m going to lose money on banks share. "Thanks"rep. and McCain.

    March 8, 2009 06:47 pm at 6:47 pm |
  25. Renee

    The Republicans have about as much "credibility" as the Obama administration does right now. Just getting the tax cheats in his administration to PAY UP would probably save several banks, AND budget an entire state for this year.

    March 8, 2009 06:48 pm at 6:48 pm |
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