Financial Bailout problems

[Lynn Farris]

These guys, they don't get it," Rep. Elijah Cummings, D-Maryland, said on CNN's "American Morning."

"They came to us basically saying 'we are on the critical list, and we need a respirator,' and we bail them out, and the next thing we know, we turn around and they are going out partying and spending the taxpayers' dollars. And it's kind of -- it's very upsetting." Watch Cummings criticize AIG »

Cummings, a senior member of the House Committee on Oversight and Government Reform, called for the resignation of AIG CEO Edward Liddy, who joined the company only a few weeks ago as part of the bailout plan.

After the first set of parties they were at it again last week holding more luxury conferences. I agree with Cummings, the upper level management who approved this should be fired.
http://www.cnn.com/2008/POLITICS/11/11/aig.conference/?iref=mpstoryview

Now today, we hear about what Goldman Sachs wants to do with our money. Fox news just reported of the bailout money that they are holding 6.4 billion back

http://www.foxbusiness.com/story/markets/industries/finance/wall-street-bonuses-expects-come-season-despite-bailout/

This article doesn't use the 6.4 billion figure. But that was just reported on TV.

I ask you - do you think that if the goverment has to bail out your company that you deserve bonuses? Don't you think that you should feel lucky unlike so many Americans that you still have a job and your salary?

I for one really resent my tax dollars being used to enrich to CEO of Goldman Sachs giving him millions in bonuses, they aren't helping with the credit crunch. They are just fixing up their house and are giving themselves bonuses. But these people are the same ones that are saying we shouldn't help the auto industry save jobs of 1 of of 10 Americans. And to help them retool to more energy effiecient cars. Unbelievable.

[ryan costa]

“They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans."

http://www.portfolio.com/news-markets/n ... print=true

It all started in the Reagan years. Wall Street innovators do anything they wanted, so long as it used the word "freedom".

[Will Brown]

This whole thing is a bunch of mudslinging by politicians who rushed into spending our money without any knowledge of where it was going, or of how large businesses operate.

In a large company, periodic conferences are considered a necessary expense to get widely separated people together so they can get to know each other and all get on the same page. Why would management spend all that money on conferences, when it is an expense that reduces income and, in most cases, that reduction impacts their bonuses?

As to the amount, bear in mind that this is a huge company that tries to attract talent, and holding a conference in the washroom at MacDonalds probably won't do that. Rather, the conferences are planned many months in advance, and commitments for expenses of the conference are made. So if the company has already spent most of the ultimate costs by reserving rooms, etc., their choice is to spend a little more and hold the conference, or cancel the conference and lose all the money they have already committed. So their options were not good: they could either hold the conference and be trashed for spending the money, or cancel the conference and be trashed for spending the money.

The bigger concern is that people like Mr. Cummings are so eager to spend our money without giving any consideration to how it will be used. Now they are on the cusp of giving billions to auto manufacturers who don't seem to be able to produce products that we will buy, and to subsidize unskilled labor that has grown accustomed to earning $100,000 a year (overtime inclluded).

[Lynn Farris]

Mr. Brown,

I do understand business. And I think that if you are in this bad of situation that you would be declaring bankruptcy if it wasn't for the bailout of the government - you should be in a type of recievership so that top excecutives can't pad their salaries with bonuses or spend their days on luxury trips which we have all heard about. Maybe your company sends you on these junkets - but most of the taxpayers that are paying their way find other methods. Some of these taxpayers have been downsized and are working multiple jobs to meet the bills or are losing their homes while their tax dollars goes to a pedicure for some executive?

Mr. Brown there are many ways that business today can get around the outrageous expenses for meetings that you are condoning. There are conference calls. There is Go to Meeting software where you can sit in your office and all see the same white board. You can video conference. They got used to these perks as part of their business. They aren't needed and while the taxpayer is footing the bill, they should not be occuring. Thank God someone like Mr. Cummings is watching.

By the way it isn't hard to attract talent today. The unemployment lines are long with good people who have lost their jobs.

While I do agree that the same regulations should be attached to the auto industry, I can't see allowing 2 million people to lose their jobs in this economy. Along with our new energy policy, force them to make energy efficient cars that people will buy. Maybe that run on National Gas or Hydrogen. I can't believe that people are willing to bail out American Express, and the Fat Cats, but aren't willing to help the average worker when other countries (e.g., Japan has subsidized the steel and auto industry with whom they compete) And while we are talking about making energy efficient cars, remember that Bush gave tax exemptions for big SUV's which created a demand for them. Maybe that was to help the oil industry.

I normally agree the more government meddles, the more they screw us up, but I can't believe that Congress will let the auto industry die in this country. JMHO

[Stephen Eisel]

I normally agree the more government meddles, the more they screw us up, but I can't believe that Congress will let the auto industry die in this country. JMHO

good point...

[Will Brown]

Ms Ferris:

I Think you overstate your understanding of large business. I was talking about large national or international concerns, not some local hamburger stand. These businesses are still competing to obtain and retain the type of executive talent that has the education, experience, and talent to handle responsibilities that would confound most of us. AIG admits that the perks are to retain that kind of talent which will be necessary to restore the company if the bailout works.

What kind of business do you run that makes you think you understand that type of business, and if you really have that understanding and ability, why are you still in Lakewood, hardly a community where such executives aspire to reside?

I'm not in favor of a government bailout of any company. absent exigent circumstances, and I would want, in those rare circumstances, some kind of security to be held by the government that had higher rights than the common stock. The problem there, of course, is that the government, to protect its own interests, would probably try to protect the company and even give it advantages over its competitors. From what I have read, that is the rationale behind congress banning investment of Social Security funds in stocks or bonds, and requiring that they be invested in federal instruments (which gives congress more money to spend, but certainly that could not have been their reason). Apparently AIG had insured a huge amount of the substandard loans, and when those loans became a problem, AIG faced defaulting on some of their coverage, and the congress felt that allowing such defaults would make the whole house of cards collapse, so they funded a virtually unsupervised giveaway, and are now trying to point the finger everywhere so their own ineptitude won't be noticed.

I do understand business. And I think that if you are in this bad of situation that you would be declaring bankruptcy if it wasn't for the bailout of the government - you should be in a type of recievership so that top excecutives can't pad their salaries with bonuses or spend their days on luxury trips which we have all heard about. Maybe your company sends you on these junkets - but most of the taxpayers that are paying their way find other methods. Some of these taxpayers have been downsized and are working multiple jobs to meet the bills or are losing their homes while their tax dollars goes to a pedicure for some executive?

I don't share you confidence in Mr. Cummings. He helped approve this unsupervised handout, and is now posturing in response to some headlines; if he were really keeping tabs on this, he would have known about it before it hit the press, and would have placed some restriction on the handout that would have prevented AIG from such activities (in point of fact, AIG has said that no government funds were used for the conference, and I have no doubt they can provide the accounting entries documenting this, although the suspicious part of me feels that they felt freer to hold the conference when they knew that some of their other problems had been solved by government largess, and they wouldn't have to find the money to deal with them.

I don't doubt the unemployment lines are long with good people who have lost their jobs, but the kind of executive talent needed to run large companies doesn't stand in unemployment lines; they are satisfied to wait at home, or consult, for six months or a year, waiting for the right opportunity. Theirs is a different world from the one we live in; if I made 15 or 20 million a year, I'd probably quit after the first year and spend the rest of my life trying to see all the great art in the world.

As to the auto industry, I think you labor under the delusion that there would be no auto industry in our country if the so-called big three went into bankruptcy. First, a large number of cars are made in this country, by American workers, by companies that are headquartered overseas, and those companies would probably expand if there were opportunities. Second, bankruptcy does not necessarily mean that a company goes out of business; if often gives them the opportunity to restructure and continue in business, so we could very well end up with a more efficient domestic industry where more American workers would have a chance to earn a decent wage. Perhaps even GM (which makes some of the most fuel efficient vehicles in the world in Europe) would be inspired to bring some of those fuel efficient vehicles to our market. I agree that governments, absent some kind of threat) do try to protect industries. Left to their own devices, the government would have preserve a number of industries that have disappeared. No doubt we would still be manufacturing Steam Locomotives, with heavy government subsidies, which would not be salable, but we could put them all in storage yards and hire more people to watch them. The government maneuvered to protect American Motors, but its gone and I don't miss it. And as for crucial industries, where did the steel industry go?

The harsh fact is that if we hope to have innovation, we cannot protect the companies that don't innovate; we must allow failure and hope that those who are impacted by failure will have the initiative to move into a new field

Don't you realize that the government has tried for many years to entice the auto manufacturers to produce more fuel efficient cars, and their attempts to do this by regulation have been unsuccessful? I think a simpler and more effective way of accomplishing that goal would be to put a substantial tax ($5 per gallon, perhaps) on gas and diesel fuel. We could then each choose whether to buy a fuel efficient car with reasonable operating costs, or buy the SUV with exhorbitant operating costs. I think most of us would be smart enough to go for the efficient vehicle, and the manufacturers could respond to those market pressures. Of course, it would take a courageous congress to take such a step, and I think we tend to elect panderers, rather than people who have the courage to solve a problem.

I agree with your belief that Congress will let the auto industry die in this country. But I see that as one of the biggest problems we face.

[Will Brown]

Ms Ferris:

I Think you overstate your understanding of large business. I was talking about large national or international concerns, not some local hamburger stand. These businesses are still competing to obtain and retain the type of executive talent that has the education, experience, and talent to handle responsibilities that would confound most of us. AIG admits that the perks are to retain that kind of talent which will be necessary to restore the company if the bailout works.

What kind of business do you run that makes you think you understand that type of business, and if you really have that understanding and ability, why are you still in Lakewood, hardly a community where such executives aspire to reside?

I'm not in favor of a government bailout of any company. absent exigent circumstances, and I would want, in those rare circumstances, some kind of security to be held by the government that had higher rights than the common stock. The problem there, of course, is that the government, to protect its own interests, would probably try to protect the company and even give it advantages over its competitors. From what I have read, that is the rationale behind congress banning investment of Social Security funds in stocks or bonds, and requiring that they be invested in federal instruments (which gives congress more money to spend, but certainly that could not have been their reason). Apparently AIG had insured a huge amount of the substandard loans, and when those loans became a problem, AIG faced defaulting on some of their coverage, and the congress felt that allowing such defaults would make the whole house of cards collapse, so they funded a virtually unsupervised giveaway, and are now trying to point the finger everywhere so their own ineptitude won't be noticed.

I don't share you confidence in Mr. Cummings. He helped approve this unsupervised handout, and is now posturing in response to some headlines; if he were really keeping tabs on this, he would have known about it before it hit the press, and would have placed some restriction on the handout that would have prevented AIG from such activities (in point of fact, AIG has said that no government funds were used for the conference, and I have no doubt they can provide the accounting entries documenting this, although the suspicious part of me feels that they felt freer to hold the conference when they knew that some of their other problems had been solved by government largess, and they wouldn't have to find the money to deal with them.)

I don't doubt the unemployment lines are long with good people who have lost their jobs, but the kind of executive talent needed to run large companies doesn't stand in unemployment lines; they are satisfied to wait at home, or consult, for six months or a year, waiting for the right opportunity. Theirs is a different world from the one we live in; if I made 15 or 20 million a year, I'd probably quit after the first year and spend the rest of my life trying to see all the great art in the world.

As to the auto industry, I think you labor under the delusion that there would be no auto industry in our country if the so-called big three went into bankruptcy. First, a large number of cars are made in this country, by American workers, by companies that are headquartered overseas, and those companies would probably expand if there were opportunities. Second, bankruptcy does not necessarily mean that a company goes out of business; if often gives them the opportunity to restructure and continue in business, so we could very well end up with a more efficient domestic industry where more American workers would have a chance to earn a decent wage. Perhaps even GM (which makes some of the most fuel efficient vehicles in the world in Europe) would be inspired to bring some of those fuel efficient vehicles to our market. I agree that governments, absent some kind of threat) do try to protect industries. Left to their own devices, the government would have preserve a number of industries that have disappeared. No doubt we would still be manufacturing Steam Locomotives, with heavy government subsidies, which would not be salable, but we could put them all in storage yards and hire more people to watch them. The government maneuvered to protect American Motors, but its gone and I don't miss it. And as for crucial industries, where did the steel industry go?

The harsh fact is that if we hope to have innovation, we cannot protect the companies that don't innovate; we must allow failure and hope that those who are impacted by failure will have the initiative to move into a new field

Don't you realize that the government has tried for many years to entice the auto manufacturers to produce more fuel efficient cars, and their attempts to do this by regulation have been unsuccessful? I think a simpler and more effective way of accomplishing that goal would be to put a substantial tax ($5 per gallon, perhaps) on gas and diesel fuel. We could then each choose whether to buy a fuel efficient car with reasonable operating costs, or buy the SUV with exhorbitant operating costs. I think most of us would be smart enough to go for the efficient vehicle, and the manufacturers could respond to those market pressures. Of course, it would take a courageous congress to take such a step, and I think we tend to elect panderers, rather than people who have the courage to solve a problem.

I agree with your belief that Congress will let the auto industry die in this country. But I see that as one of the biggest problems we face.

[Lynn Farris]

Mr. Brown,

I have never met you but I am willing to give you the benefit of the doubt that you have some experience in the business world and just because we have different ideas of how a company should be operated it doesn't mean that one of us is uneducated, it means we have a difference of opinion. Likewise if the Democrats in Congress disagree with you - it doesn't mean that they are uneducated or don't know anything about business - it merely means that they see things differently as well.

For your benefit, I have my MBA from CWRU and have consulted with Fortune 100 companies, Major Utilities, Governmental Organizations, Non Profit organizations as well as small and medium sized businesses. So I feel that I have a wide breath of knowledge in business of all kinds.

To ask why any one with business experience would live in Lakewood is a bit insulting to all the residents of Lakewood in my opinion. Lakewood is an incredible city with an amazing wealth of talented and educated citizens. I am always amazed by them.

But today I hear that AIG who wants more money plan to keep 500 million of it for bonuses for their executives. Harry Reid is furious about it. I'm with him.

As for the AIG accounting issue, I wonder what you thought about the Ohio lottery being for schools? Sure all the money for the lottery goes for the schools but they stopped contributing that same amount from the general fund. I think the same principal applies here. Accounting is a fascinating subject too.

I read what you are saying, about keeping talent and paying them. Keep in mind that this talent put together a program that lost their company billions of dollars and required a government bailout of unprecedented proportions. But if you watch the stock markets around the world - you will realize that AIG is not the only company in free fall and the stock markets internationally will indicate that it is a buyers market in both terms of stock and employees. Most savy employees realize that in these times they like the rest of the world must tighten their belt. And if like you say they would have the money that they just wouldn't work if they weren't being paid enough - why should the person working multiple jobs to put food on the table pay taxes for their bonus? This to me is a moral issue not a business one. The bailout in my humble opinion was to stop the total collaspe of the home market - not to retain the "best top executives" for a company.

As far as the auto industry goes, I never said that there would be no more cars made in this country. I believe I said that over 2 million jobs would be lost in this country. 10% of our current workforce.

You said

Don't you realize that the government has tried for many years to entice the auto manufacturers to produce more fuel efficient cars, and their attempts to do this by regulation have been unsuccessful?

If you are looking back to the Carter years that is indeed true. When I graduated from college I had a diesel rabbit that got 50 miles to the gallon, NASA Lewis had engineered the first municipal windmill, the White House had solar panels and we were well on our way to energy independence. Then Carter lost to Reagan and things changed.

The most recent Bush administration offered huge tax discounts on SUV's. And yes there were a few voices like Al Gore's talking about the environment - but no policy to back that up. There was an oil man in the White House and he was helping his friends. So in the words of Rev. Wright the chickens are coming home to roost. So who should pay? The Goverment who by their incentives encouraged gas gussling vehicles or the industry that went along with them? The execs at GM, Ford and Chrysler were not all stupid. They were producing what our government was incentivising. I agree with you the free market works - but we had already played games with it which got us into this trouble in the first place.

You also said

Second, bankruptcy does not necessarily mean that a company goes out of business; if often gives them the opportunity to restructure and continue in business, so we could very well end up with a more efficient domestic industry where more American workers would have a chance to earn a decent wage.

Once again you are right - but only to an extent. I was listening to Bloomberg tonight and the financial executives there felt that the situation was such that they would not have the time to restructure which would mean renegotiating lower income for workers and reducing benefits(at the same time as we are subsidizing bonuses for AIG and Goldman Sach execs) and most likely would go quickly into chapter 7 - which is really the end.

I agree with you that I don't like picking and choosing companies because it does offer unfair advantages. But in my opinion our government polcies broke the system and now we are obligated to fix them. We are spending 10 billion in Iraq a month because since we broke Iraq many think it is our obligation to rebuild it. I personally would rather see Iraq spend their own money and us use that money here at home.

Don offered an excellent solution - National Health Care. That will help all companies across the board, big, medium and small. It allows the company to become more competitive in the market. In the past many companies moved to Canada just to get rid of the cost of health care in this country.

The Congress I believe should follow Obama's methodology and move with all deliberate haste to resolve both the issues with the Fiancial Bailout that I think have not had enough strings placed on them and the auto bailout. With the auto industry I think we should make the loan contingent on producing energy efficient cars.

[Bill Call]

With the auto industry I think we should make the loan contingent on producing energy efficient cars.

That will be the position of the Obama administration and Congress which is another reason to oppose a bailout of the auto industry.

GM will be out of cash in a few months and is losing billions of dollars per year. And what will Congress demand in exchange for subsidizing these losses?


1. GM continuues to pay people not to work.
2. GM continues to pay into its bankrupt pension fund.
3. GM continue to pay retiree health benefits.
4. GM continue to pay its employees twice as much as other industries.
5. GM produce small cars that nobody wants that cannot be sold without huge annual taxpayer subsidies and that cannot be sold at a profit.

Government cannot save industries by subsidizing labor inefficiencies. Britain spent billions subsidizing its auto industry. To what purpose? Hint: It no longer exists.

Now, of course, all of this will happen no matter what we say here.

Our efforts can better be spent in trying to get a piece of the action. In the Obamanation it is not work, investment, innovation or hard work that will be the foundation of success but political connections.

Cities, States, Counties, Government pension funds and others are all lined up for a piece of the pie. Why not us? It's going to be sooo cooool.

[ryan costa]

there has been no cultural leadership or encouragement for consumers to drive more modestly sized cars. Not from Garth Brooks. Not from Toby Keith. Not from Ronald Reagan's kids. Not from Ted Nugent. Not from Arnold Schwartzeneggar. Are any of the celebrity cable news folks driving cars with engines of less than 2.3 liters of displacement?

There has been great cultural support and government support for sprawl. Giant Malls, giant schools, giant cargo container ships, giant highways and off ramps, Wal-Mart Supercenters, and millions of McMansions. all that requires much more driving. Building sprawl and financing sprawl is the only game in town in the post-industrial global economy. Forget about being a machinist in an appliance factory, an assembly worker in a factory, an engineer in an appliance factory, middle management in an appliance factory, administrative support in an appliance factory, a book keeper in an appliance factory, or the head cook in the cafeteria of an appliance factory.

The idea of pension funds is that you can pay your employees less if you promise to pay them more later. No point giving them all that money at once: they'd just spend in on all the stuff they see on tv. no point in each worker putting that money in the bank if the bank will lose it all in a spree of Innovation. In the past it was more necessary to buy shares in mutual funds or securities in much larger chunks at any one time, so pooling the funds of many employees made some kind of sense.

think of it as profound that personal automobiling is the totem of American Freedom, American Individualism, and American Consumer Power. Our Big Three's managers aren't as bright or competent as lower paid higher taxed European managers and executives, and haven't been for several decades. The White Stripes described the transition point in the song, "The Big Three killed my baby".

[Charlie Page]

I helped a family in our church move this past Saturday. The reason they are moving is they have an adjustable rate mortgage that went from around 5% to 11%. Their payments are now that of a 250k mortgage. They tried to refinance but they were told no because he was in his current job less than a year. Now they are upside down and have to sell short.

Meanwhile our tax dollars are being used to fund wall street/bank bonuses, corporate boondoggles and the purchase of National City. Is there any justice in the world? Where is the bailout for the little guy? Did I miss something...aren’t interest rates supposed to be negotiated downward to avoid foreclosure or short sales?

[Lynn Farris]

Interesting after today's rant by Obama. I agreed with him, but I wonder if others now agree.

If your company is so desperate that you need a federal bailout, should you be handing out huge bonuses, going to spas refurnishing your office lavishly and buying corporate jets? Should you be coming to Washington in a Corporate Jet? Did we ignore it the first time with Wall Street, get outraged over the auto industry and then realize that Wall Street was being out of touch and arrogant too? Or was it the fact that Wall Street took our money and didn't solve any of the average American's problems, freeing up credit or solving the mortgage issues?

Are people that lose their company a whole lot of money entitled to huge bonuses? Should a company give out huge bonuses while reducing their workforce significantly? Is Obama right, should they excercise self discipline and take their bonuses, when their debt to our government is repaid and they are making money once again?

Are we going to see only the companies that really need the money, take it now that they have to abide by these rules? Sounds like Ford doesn't need it so much now and other banks that want to give big bonuses are rethinking it as well.

It seems to me that this is no longer a Republican vs. Democratic issue. It seems to me that all of us now think that Wall Street should be excercising restraint as well. But I could be wrong, I just wanted to bring this issue up again in light of the positive response to Obama's righteous anger and see if I was reading a change in the attitudes.

[Jim DeVito]

If your company accepts a bailout from the government the entire board should be fired and their mansions mortgaged to pay back the loan. These are "smart people" they will do alright.

[Will Brown]

One of the main problems with governmental bailouts is that it puts risk-adverse people in a position to participate in decisions that involve risk, and whether through character or experience or training, they are not in a position to make the hard decisions that can cause a company to prosper, or to fail.

I would say a risk adverse person is one who is comfortable with a high degree of certainty, and uncomfortable with risk. I would contrast this with the type of person who is so confident (or overconfident, to the risk adverse) in his own abilities that he is willing to bet everything on his performance. In sales, for example, the risk adverse person is comfortable with a salary without much of a chance that it will change based on his performance; the risk taker, by contrast, will work for straight commission, knowing that he will get nothing if he makes no sales, but that he can get a lot by making a lot of sales. People who start new businesses, or rehabilitate or expand existing businesses, are almost always risk takers.

Bonuses, at least in my experience, are performance based, sometimes based on the performance of the individual, sometimes based on the performance of the company; sometimes based on both. In any event, they are a part of the employment contract, negotiated when the person is hired or reassigned. So if a company needs me in New York, I will look at what I am giving up (a life in an inexpensive community, a house that I will have to sell at a loss, low taxes, and a community where my family is established), and demand that I get relocation expenses, and a higher salary to cover the increased costs in New York. If it is common in the industry, and I am willing to take some risk, I may take a lower salary and the promise of a substantial bonus if I do well.

It irks me when these pandering politicians, without even knowing how the amount of each bonus was calculated, condemn them just to get onto the news, and particularly when someone with no experience in business, such as our President, condemn bonuses (a performance incentive) and says that he wants to replace them with performance incentives! That seems to me to indicate that he doesn't know what he is talking about (but he does talk so well.) The idea that someone can negate the terms of an employment contract, after the employment has been performed, is offensive. I wonder if I can get some money back from my paperboy since the paper was late a few times last year? Honesty compels me to say that is a hypothetical situation; I don't have a paperboy, and when I did it was a man, and before that a woman.

If we play the bailout game, we will turn American businesses into bureaucracies. We all have our own experiences and our own least favorite bureaucracies. The VA, for example, is widely felt to be unresponsive to veterans, and to take forever to process a claim; but that is what you get when the risk adverse people run things, and have little if any incentive to become more efficient. The post office only started to become efficient because the government didn't protect their monopoly on deliveries, and the private companies that sprang up forced the post office to modernize.

Our history is full of companies that have prospered, become complacent, and subsequently failed to be replaced by a company with newer ides. That is what has brought us prosperity, even though there have been periods of difficulty. If we had had government bailouts of these businesses that time has passed by, we would be conducting this forum, if at all, with typewriters, if not pen and ink.

[Lynn Farris]

Mr. Brown,

I am in complete agreement with you that there are companies that are risk adverse and ones that aren't as well as people. And that when you decide to roll the dice and be on your own, a company, a sales person working on commission, you take responsibility for your succcess and your failures. But when you fall flat on your face. When you fail. When you lose money. When no other bank will bail you out. When you are totally desperate. When in an effort to survive, you look to the government for assistance - you have changed the scenerio. Please, you beg, we made mistakes, we took risks we shouldn't have. Help us get out from under these toxic assets. Help us be able to lend again and fix the credit crunch. So the government realizing the credit freeze was affecting the entire economy says okay we will help you.

But like a welfare queen (a term I hate but everyone will understand) who needs money desperately to feed her children gets the money. Does she spend it on food for her children? No, she goes out and spends it on something entirely frivolous and then comes back and says but my children are starving. You have to help me again. But no, I don't want to take back the silly things I purchased. I just want you to give me more.

My contention is that some on Wall street have become welfare queens. Much worse actually, because they are taking huge sums of our money and by not doing the right thing - easing credit instead of buying fancy comodes or airplanes, they are destroying our economy and risking the chance that other worthwhile, responsible entitites that need help will never get it.

So I kind of agree with you. All of a sudden a risk taking organization has basically become a government organization or a quasi government institution. Didn't those companies make that decision? Didn't they change the structure of their organization? They didn't have to ask for or accept the money. But once they did, didn't the dynamics change? Aren't they now responsible to us? I really think the government should have gotten stock. They should have been able to vote on these decisions.

If you decide you want to expand your business and you take venture capital, believe me, that venture capitalist has a say in how you run your businesses. When everything is going great, they may stay out of it. But believe you me, if you start going down the drain, they are going to stop foolish spending immediately.

The Government is now the venture capitalist in these banks. Now you may say that the government isn't prepared to be a venture capitalist and I would agree with you. But asking the businesses to act with discipline and responsibility is pretty normal.