In the zeal of Treasury Secretary Paulson and his team to get the funds to fund the financial industry and offset an economic collapse, Treasury evidenced to everyone that they were ill-prepared to manage such sums in an effective manner.

This resulted in gross mismanagement of taxpayer funds by the government agency with the greatest fiduciary responsibility to the shareholders... excuse us... taxpayers.

Never in human history has so much money been so badly managed.

Where were the systems and the protocols, procedures and contracts? While Mr. Paulson came up to Capitol Hill in September to get the money, why didn't he have teams of people writing up options if they didn't get the money, looking at every aspect of the funds use and putting together solid contracts?

Well, the answer to that is quite simple, and sad. The Treasury is full of management executives that came out of Wall Street... the same people who mismanaged financial services firms, destroyed good companies so they could take a little extra profit today, and effectively messed up the entire banking and real estate industry. Could one expect Wall Street executives to properly manage a fund that large on short notice?

One would hope so, but unfortunately, they've proven again and again they cannot. That's bringing taxpayers, Congressmen and Senators and administration officials to tears. It's not doing much for the banks or real estate either.

When Congress failed to approve the initial TARP program, we wrote and submitted "Invest In America", a plan for the injection of capital into banks to offset the negative balances on their books and allow them to begin lending again. It also included an economic stimulus component, focused on small and mid-sized businesses.

The British, then Italians and later all major European central bankers and financial ministers seized upon our plan and have been very successful with its management. The US Treasury messed it up, initially by compelling banks to take money, even when they didn't want it.

Stupidly, they believed that banks that didn't take the money would signal they were in bad shape. Instead, such banks should have simply declare their solvent status and opened their published records to the media for scrutiny. Treasury officials could have done that, saving about $40 Billion.

They had sufficient time after the October 10th crash to set forth a series of rules, yet they did not predict the banks would simply hold the money, or use it for acquisitons, rather than lending. All they had to do was demand, in writing that bankers agree to use the money solely for lending purposes. Could this have been so difficult to conceive?

When they saw the banks were not lending, they should have simply called upon every banker and said... lend it or give it back. Of course, they failed to do so... and now Mr. Frank and his economic team will do so, handily.

What of the banks who received money and spent it improperly? Well, they should give it back. And if they haven't lent it out... they too should return it and candidly, face penalties. Every banker knew what the money was intended for, so they've no excuse.

Some of the bankers we've spoken with felt compelled... indeed pressured by regulators to take money. Most didn't know what to do with it because in order for banks to lend, borrowers... or potential borrowers have to come in and apply. Those folks have been staying home.

So we have a suggestion to Mr. Frank, the banks and Treasury... lend money to small and mid-sized businesses. Qualify them with business plans, just as SBA would, and put the funds back in their hands with a contractual commitment to hire, and to spend.

You see, when small businesses buy, they create jobs and economic stimulus. Joe's machine shop buys tools from Mike's hardware, who buys from a supplier, who buys from manufacturers. All along the way, companies make money and hire people. When those people are hired, or in this case, hopefully hired back, they can pay their mortgages, bills, credit card accounts and utilities. That equates to a reduction in foreclosures, personal and business bankruptcies and defaults. Smart, no?

I'm sure Mr. Frank will incorporate this concept into his revisions to TARP.

While other economists have criticized his statements, they're not thinking forward, but in the present. Mr. Frank, like our economics team, look to the future and realize that Treasury cannot be allowed to perpetuate its mistakes, ad infinitum.

Bravo Mr. Frank... another good move!