Sen. Richard Shelby, R-Ala., the top Republican on the Senate Banking Committee, said today on "This Week" that the government should let trouble banks fail.
"I don't want to nationalize them, I think we need to close them," Shelby told me this morning. "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..."
The Chamber guy disagrees, but frankly I have no idea why.
...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."
So Donohue is endorsing a plan whereby Gummint/private partnerships purchase blocks of Citi nuclear-waste loans and Citi gets to keep the chocolate bon-bon loans and deposits?
Why? What did Citi's management do to deserve THAT treatment?
And does he really mean that Citi is the only bank on Earth which is 'integrated throughout the whole global economy'? Is HSBC chopped liver? Chase? Santander? UBS? WellsFargo?
Who's he trying to kid?
Kill it off. Somebody will buy the parts which are worthwhile (and the good loan officers and operations types.) FDIC's done it before and they can do it again.
And while they're at it, they could de-fund Robert