"Close them down, get them out of business. If they're dead, they ought to be buried," he said. "We bury the small banks; we've got to bury some big ones and send a strong message to the market. And I believe that people will start investing [again] in banks."
I asked Sen. Shelby if he was referring specifically to Citigroup, the struggling bank that has received about $45 billion in taxpayer money.
"Well whatever. Citi's always been a problem child," said Shelby, who has long opposed giving federal TARP money to struggling banks.
But Thomas Donohue, head of the U.S. Chamber of Commerce, disagreed.
"It's not practical to talk about closing a bank that is integrated throughout the whole global economy," he said. "It is practical to talk about buying some of those assets away from those banks and holding them in an institution that would have both public and private money." Donohue said federal bailout money for the banks was the right thing to do for the economy
How can we accomplish anything with a ranking member giving us the Hoover treatment? The banks are so interconnected to the global economy that you just can't treat them like a mom and pop grocery store, but thi sis what Republican leaders want to do.
Something like this is both heartening and insanely distressing at the same time because what exactly does he think people are talking about when people talk about nationalization? They're talking about some form of FDIC-like takeover, though probably one that would take longer and be much more complicated since you simply can't find another bank that is going to buy up most or all of Citi's assets at some knock-down price over the weekend -- certainly not in the present climate. You either clean the bank up (which would require what amounts to a de facto bankruptcy proceeding) and sell it back into private hands or break it up and sell it off in individual pieces -- likely some combination of the two.
It would be one thing if Shelby were just one more Fox News robot. But he's the ranking member of the friggin' Banking Committee.
C&Ler David emailed me this:
Keith Olbermann: Shelby didn't just say the banks should be left alone to meet their own fate to fail if that's the case. He suggested having federal regulators come in and shut them down. How is that not government intervention? How is that not nationalization?. And just because there's no bank standing at the end of this, how is that not socialism by [Shelby's] own terms and definitions?
Richard Wolffe: Well, I love the "socialist" debate. It's just so
amazing that people throw the word around and they have obviously no idea what it actually ever meant. You just have to be grateful that this congress wasn't dealing with the Soviet Union otherwise they would have threatened Sweden with nuclear annihilation.