Apr 15 2009
No company or business is “too big” to fail, Sen. Richard Shelby, R-Ala., said at a town hall meeting Tuesday in Rainbow City.
Shelby told a crowd of about 50 people at Regency Pointe that General Motors and other car makers should be allowed to go into Chapter 11 bankruptcy rather than being propped up by government assistance.
“I don’t believe anyone is too big to fail,” Shelby said. “What they mean by too big to fail ... means we’re going to prop them up even if they’re walking dead.”
Shelby said the biggest challenges facing the economy are getting trust back in the banking system and getting lending going to small- and medium-sized businesses that create jobs.
He admitted jobs would be lost if General Motors, Ford or Chrysler closed.
“But somebody would come up in their stead because it’s the law of supply and demand,” Shelby said.
Shelby said he thought General Motors could survive, but not with its current management and attitude. He said the company’s work force and product would have to be slimmed down but could survive.
“They need to go in Chapter 11 (bankruptcy) or something like that,” Shelby said.
“I don’t believe we should bail out people over and over with our tax money from small business and working people taxes that caused most of the problem, I opposed the bank bailout because I thought it wouldn’t work; it hasn’t worked yet.
“I don’t believe myself that the government — you that are the government — should make decisions or prop up companies that have failed or failing,” Shelby added. “The market takes care of that, the law of economics always has.”
Detroit automakers are a “failed model,” according to Shelby, and if they don’t change they will be “on the dole.”
Shelby is completing his fourth term in the Senate and said seniority has helped him obtain seats on powerful committees such as Appropriations and Banking, Housing and Urban Affairs.
To help improve math, science and engineering in the Alabama, he has gotten funding for Auburn University, the University of Alabama, the University of Alabama at Birmingham and University of Alabama at Huntsville.
“I’m trying to get a billion dollars,” Shelby said, “I’ve gotten over $500 million.”
Federal funds have been going to other schools in the U.S., according to the senator, who said he wanted to bring funding home to Alabama.
“If we don’t lead the world in math, science and engineering, our economy will lag the world,” Shelby said.
He also would like to see improvements in K-12 education.
Shelby pointed out that it took 200 years for the United States to reach a trillion-dollar debt, in 1982.
“Now we owe about $12.5 trillion,” he said, “and we’ve added two trillion in the past six months, we’re probably going to add six to eight trillion more in the next few years. We will probably be close to or more than $20 trillion in debt.
“That is a really big thing for our grandchildren in this country,” Shelby said, adding that it will affect the value of U.S. currency and bonds the government sells.
Shelby said top Chinese officials recently questioned the U.S.’s ability to pay off its debt.
About 25 percent of the U.S. government debt now is held by foreign governments.
“That’s too much,” Shelby said. “That is not a healthy trend, for us it has not been for a long time, because people that own our debt will be calling the tune, won’t they?”
Asked about President Barack Obama and the military’s response to a pirate attack on an American vessel off the coast of Somalia, and the rescue of the ship’s captain who was held hostage, Shelby said, “I thought that was very positive. I’m proud of our Navy Seals and I glad they were well trained and good shots.”
However, he doesn’t expect piracy in the area to go away because of that incident.
“You’ve got terrorist pirates assisted with sophisticated weapons,” Shelby said. “And as long they stop people and you pay the hijacking fees and the bribery fees, this will be a real impediment to world commerce.”
He likened it to stopping truckers on the interstate and requiring them to pay before letting them proceed.
Shelby said the U.S. needed to work with its allies to get rid of the pirates, but added, “Our problem is we can’t police the world.”
The senator called “cap and trade” legislation, an effort to reduce emissions on greenhouse gases, “horrible” and said it would result in a tax on power bills.
He said it would be “the biggest tax on America you’ve seen in a long time” and vowed to do everything he could to block it.
Shelby said the Obama administration is the most liberal administration since the administration of President Jimmy Carter and could be the most liberal administration the country has had. “Make no mistake about it. Wait and see.”
He added, “I don’t believe we can borrow our way into prosperity and I don’t believe we can tax the American people into prosperity either, over, over, over.”