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.
I am a Democrat and I voted for Obama, but I think that certain banks, such as Citi Crop, Bank of America etc should fail. They got bail out money just to pay their top exec not lend to their customer base or help this ecomony get back on its feet.
More easy, cheap populism from the Grand Hypocrite Party. Letting big banks fail is a sure-fire way to screw up the economy for a good long time.
I worked in the financial industry my entire career and spent many years back and forth in Washington dealing with the Senate and Housing Banking Committees.
Republican Sen Shelby has been on the Senate Committee for more than 7 years. He saw what was happening a long time before American got hit over the head with these huge bank losses. Why wasn't he so vocal then? Because he and his rich buddies were getting richer at the time taking full advantage of what eventually brought the banks down.
Now that he got all he could – he is screaming to just let the banks fail because the vultures cannot get anymore riches from these banks.
Republicans are so quick to snipe and criticize President Obama for problems he inherited from them. WHERE WAS SHELBY'S LEADERSHIP THS PAST DECADE WHEN HE WAS IN CHARGE OF THE SENATE BANKING COMMITTEE???
HE HAS SAT SILENT FOR A YEAR WHILE THE BANKS SLID FURTHER IN THE DITCH – NO SOLTUIONS, NO ACTION – JUST MORE TYPICAL REPUBLICAN LACK OF RESPONSIBILITY FOR ANYTHING THEY DID WRONG.
SHELBY WAS IN CHARGE WHILE THESE BANKS WENT WILD WITH IDIOTIC PRACTICES AND SAID NOTHING – THIS IS HIS FAILURE AS A SUPPOSED LEADER OF THE BANKING INDUSTRY.
JOHN MCCAIN HAS NO CREDIBILITY WITH THE AMERICAN PEOPLE. HE WAS THE ONE THAT SAID THE ECOMONY WAS STRONG AND ONLY STOOD UP FOR THE RICH AND CORPORATIONS DURING THE BUSH ADMINISTRATION.
GIVE ME A BREAK. HE NEEDS TO GET OUT OF THE WAY AND LET THE DEM'S WORK TO SEE IF THEY CAN TURN THIS COUNTRY AROUND. UNFORTUATELY, WE WON'T KNOW IF THINGS ARE WORKING OUR NOT FOR ANOTHER 5-6 MONTHS.
WHY DO THESE SOUTHERN REPUBLICANS NEVER GET IT?
McCain, as much as I respect his past, has never had to face the economic realities of the current situation. As we say in the South, He "married up" and she has accountants. Shelby....
hey! I have a GREAT idea. Lets' just cut out ALL of the Repubs pork, especially Shelbys and see how they OINK. This sounds like a yelling contest in the grade school yard or the pushing and shoving at the pig's garbage pail. Some one hand me as asprerin, I have a headache.
It is obvious that we will not be able to maintain the status quo. I don't feel we should. If we are going to recover we need to weed out those institutions that should fail due to their bad or archaic business practices. That I think will be what the recovery is all about. I don't envision recovery as to the way everything was before but a new order having learned from the past. It also is not a Democratic vs. republican fight but one of the return of good common sense. The same also holds for many other entities that we are bailing out. If a companies practices had deteriorated that badly (i.e. GM/Chrysler, AIG etc.) then they need to fail. We shouldn't be investing money in worthless causes.
If a bank (or any other business for that matter) does not operate in a profitable manner, then of course it should be allowed to fail. Businesses with superior management tend to have better foresight; an essential attibute for a profitable firm. Banking firms that have this superior management should be rewarded with larger market share.
Similar to Darwin's theory of evolution, let the incompetent banks/businesses fail, so that all that are left are the best businesses with the best management. Certainly, these failures will have adverse effects on people and businesses in the short term, but these effects are necessary, and the fruits to be gained in the long term will be far more worthy.
We already did let a 'big bank' fail. It's name was Lehman Brothers and the ripple affects were monumental. Do the Republicans forget what happened back in September? Some would argue that Lehman wasn't even a 'big bank' as its primary function was as a broker/investment bank. Imagine how the global markets will react to someone bigger failing? Their logic is flawed
Easy to say let something like Citibank go under, but it would create very far-reaching problems. First of all, the FDIC has $19B to cover failed banks at the moment, and Citi has almost a trillion dollars to be covered. This means virtually everyone – consumers, businesses, corporations, pension funds, states, countries, etc. – who has money in the bank would lose everything. I doubt that the stimulus package could even cover the $250,000 minimum loss for each depositor. Not to mention 55,000 people immediately out of work and on unemployment (which would have to picked up by the states because Citi would no longer be paying the unemployment insurance tax).
I do not believe Citi will survive ultimately, but there needs to be an orchestrated plan to break it up and sell off the desirable bits and close down the parts that are not viable in an orderly fashion. Does free-market capitalism mean that you are free to starve to death because of someone else's greed? When you are along-term wealthy senator or have a secure job it is easy to be cavalier about "free-market". You would change your mind quickly if you were the loser in one of these deals and ended up on the street with precious little chance of getting a job in this economy. This involves a lot of ordinary people, and there needs to be some regard for simple humanity here.
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?????
Whether for good or ill, large banks like Citi are woven into the fabric of the US economy and the US economy is just as inextricably woven into the global economy. The global economy functions because people have confidence it it. Look what's happening now with that confidence being shaken and imagine things ten times worse when that confidence gets destroyed aftre the likes of a Citi collapses.
Sure, it may be psychologically soothing to ponder about seeing a bunch of overpaid fatcats get their "come-uppance," but the reality of the situation is that if they sink their wake will bring down many more.
Yes, these banks must be protected, but many of the regulations that fell away over the years need to be reinstituted so that we don't get a repeat
No. ALL banks should be allowed to fail.
When businesses are mismanaged and are not run efficiently, not only should they be ALLOWED to fail, they should ALWAYS be allowed to fail. The whole "too-big-to-fail" theory that the government is dishing out is a bunch of bunk. It's their excuse for bailing out their pals on Wall Street. It is time we start practicing REAL capitalism in this country again, the system which made this country an economic super power.
Also, THE GOVERNMENT NEEDS TO STAY OUT OF THE MORTGAGE BUSINESS. This whole housing mess happened because Congress and the Administration was pressuring banks to loan money to people (mainly minorities) who could not pay the money back. This practice was started by Clinton and continued by Bush. The housing mess was not caused by NOT ENOUGH regulation. It was caused by THE WRONG KIND of regulation.
Some people just don't get it. No one wants bail outs but we're not talking about letting some little flower shop fold because they can't run a business. We're talking about large banks that hold large pieces of the American workers' butts. Republicans keep letting their ideaologies get in the way of common sense. Some banks and corporations have gotten too big; so big that letting them fail would put a huge hurt on everyday, average Americans trying to buy homes and cars or anything else that requires credit from financial institutions. If people can't get the money, goods and services aren't bought, businesses lay off, unemployment goes up and now even less people have buying power and the cycle continues. Why is this so hard for some people to understand?
if bank fails then we suffer.
we all have savings in the bank
No one is listening to the Republicans any more. Just CNN
Whoa! Doesn't he remember what happened when Lehman failed! I wouldn't want to go there again. Instead, lets nationalize and cut the dead weight that way.
The Senator is right, bury some small ones let some of the bigger banks die as well, they did it to themselfs not the taxpayers in rural america
For once I agree with the GOP. Laissez-faire means that any for-profit enterprise that cannot produce profit should fail. To want government intervention isn't socialism, it's federalism. Unlimited bureaucratic growth, at the expense of a deficit. Somebody's going to pay the piper someday.
I do not like Shelby one bit, but he's dead on here... Citigroup should be gone, giving them money will NOT help anybody or anything. And BofA needs some investigating, I think there has been funny business from them. The Merril Lynch deal smells bad... Lewis and Thain,co-conspirators ?
Isn't that what Obama wants to do anyway?
HE IS RIGHT FOR THE FIRST TIME THE ONE THAT ARE OWNED BY THEIR FRIENDS AND FAMILIES
It is stunning that the same people that criticized bailouts are now criticizing bankruptcy. Could you leftists make up your minds already and support your attacks with reasoned arguments and not simply spew invective?
Shelby and McCain two names you can trust, yeah, and the check is in the mail.
Best post (most intelligent) today
'It is amazing, where were those republicans when Bush was throwing money around to the banks? I did not hear anything like the constant quarrel I am hearing now. Repubs, you lost, it is time to shut up. '
They have nothing to do but be the opposite of the democrats, the nightmare 8 years and Bush's lost money on his bail out attempt brought none of the Republican response, very sad and telling
"The recovery will to hold by the end of this year, until then, the dow as an economic indicator will go down to between 2500 to 3000, and after that a robust economic recovery will begin."
I hope this is true. I think your take sounds correct. I am for letting the car makers and banks go under, but your read sounds correct.