MSNBC "Morning Joe" - Transcript

Interview

MSNBC "Morning Joe" - Transcript

MSNBC "MORNING JOE" INTERVIEW WITH SENATOR RICHARD SHELBY (R-AL)
SUBJECT: PRESIDENT OBAMA'S ADDRESS TO CONGRESS INTERVIEWERS: JOE SCARBOROUGH, MIKA BRZEZINSKI, MIKE BARNICLE, SUZE ORMAN

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MR. SCARBOROUGH: All right. Let's bring in right now the Republican senator from the great state of Alabama -- roll, Tide, roll -- who also possesses the number one recruiting class in college football for the year 2009, and also the ranking member of the Senate Banking Committee. We can talk about that, too.

MS. BRZEZINSKI: What a resume.

MR. SCARBOROUGH: Senator Richard Shelby. He's also, along with Senator Christopher Dodd, will be meeting with President Obama today to talk about financial regulatory reform.

The big question is this: We are bailing everything else out. I think most people believe, like Jack Welch believes, that it's the banking system that's the most important thing. When do we fix that?

SEN. SHELBY: Well, that's a good question. Jack Welch said that it was a thousand times more important -- that is, fixing the banking system -- than the stimulus. Than the stimulus.

MR. SCARBOROUGH: He said it's like having a heart pain and -- (cross talk) -- instead measuring them for their shoes.

SEN. SHELBY: Than the stimulus. Yeah, they tried to get him to endorse the stimulus on TV. He wouldn't do it, but he said, I'll tell you what's a thousand times more important -- straightening out the banking system.

MR. SCARBOROUGH: So when are we going to do it, and why has it taken -- why are we talking about everything else but reforming the banking system?

SEN. SHELBY: Well, my own take on it is that they're in uncharted waters. The Fed chairman has basically told us this.

Secondly, they're propping up a lot of banks that you can't even feel the pulse on, and they need to close some of these banks. Dr. Volcker told us that some banks were too large to exist, so you can't be too big to fail.

It will cost the taxpayers a lot more money in the long run to prop up banks that have no pulse.

MR. SCARBOROUGH: What about Citigroup? Let's say Citi right now, if what we hear is the truth, Citi's going to get 40 percent of its stock bought up today. Is that a mistake?

SEN. SHELBY: Well, I think it is. I think Citi's -- if you look back at Citi, they've always been a problem bank, way back. Back in the '90s, Greenspan grew them out of basically insolvency. They have slimmed down a lot, but getting --

When the government gets 40 percent, working control, common stock of a bank, you say well, it's not nationalization, but gosh, it's control.

MR. SCARBOROUGH: It is control.

Mike Barnicle, would you like to ask the great senator about Bank of America? Any questions about whether Bank of America should be bought out?

MR. BARNICLE: Well, I don't know enough about the buyout of stock among any bank to talk knowledgeably about it or to ask a knowledgeable question.

My principal concern as a consumer is the mechanics of how we got here, in terms of the collapse of the banking system. Do we understand how we got here, and can we fix the foundations that cracked, that resulted in us being here? That would seem to me one of the best ways to go about saving the bank system.

Senator, how did we get here? What happened?

SEN. SHELBY: An excellent question, and a very timely one.

I have brought that up in every hearing. I said we've got to learn the causes of all these problems before we try to fix them.

We haven't had enough hearings yet. I've talked to Senator Dodd. We can't rush to judgment on something we don't know a lot about. I think if we -- go back, step one.

And I think it will all lead to derivatives' lack of regulation, too, by the Fed. The Fed is the big regulator of our largest banks. I think they've failed the American people, really.

They didn't know what was going on in those banks. Otherwise, you wouldn't have all the money center banks in the trouble that they're in today.

MR. SCARBOROUGH: Suze Orman, a lot of Americans are afraid that the money they put in their banks is not a safe bet. What do you tell them?

MS. ORMAN: Well, what I tell them is as long as they're FDIC- insured, and you would know so by going to myFDICinsurance.gov, and you know that you're fine, all right?

The big problem is when one bank takes over another bank, you may have more money in one bank than you know. For instance, just very quickly, First Republic used to be owned by Merrill Lynch. So you have money in First Republic.

Now, you have -- Bank of America owns Merrill Lynch. And you also had money in Bank of America, thinking that both those accounts were safe and sound. Now they're one account and you have over the amount and you don't even know it. So people have to be very careful.

But just very quickly, Joe, I just have to ask the senator this, and this is a little bit off base, Senator, but I hope you take it with the utmost of respect.

What concerns me is that a person, in order to give advice, has to practice the advice, has to be very financially astute and personally has to be solvent and very aware of their own money.

Sometimes I look at politicians and I look at certain people on these committees, and when it comes to their own personal finances, they're a total wreck. So I have a hard time with people on banking committees and so forth. When they can't even handle their own finances, how do they plan for -- (inaudible) --

(Cross talk.)

MR. SCARBOROUGH: Senator -- Senator, are you a financial wreck, Senator?

SEN. SHELBY: No, I'm not -- I don't think I'm a financial wreck. (Laughter.) I'm not a wealthy, wealthy person, but -- (laughter) -- my wife and I have no debt, and that's good today.

MR. SCARBOROUGH: Yeah, that is very good.

What are you going to tell the president today?

SEN. SHELBY: Well, we'll -- we're going to talk basically about financial regulation. You know what went wrong -- the good question that was asked a minute ago -- and how do we bring insurance, banking and everything under some regulator that knows what's going on in the banking system.

MR. SCARBOROUGH: All right, Senator. Thank you so much.

SEN. SHELBY: Thank you. Thank all of you.

MR. SCARBOROUGH: Appreciate you coming in.

SEN. SHELBY: Roll, Tide.

MR. SCARBOROUGH: Roll, Tide, baby.

END.

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