Bailout Recipients by Malcolm Berko on Creators.com

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Stolen Wallet Leads to a Huge Headache Dear Mr. Berko: My wallet was stolen a year ago, and most folks have no idea what a job it has been to get my life back in order. The credit agencies have me listed as a bum, even though I pay all my real bills, and I still get calls from vendors …Read more. Kick That Broker to the Curb Dear Mr. Berko: We are 74 and 76. We've used the same broker since early 2002, and our account, which was worth $765,000 back then, is barely worth $705,000 today. Our mutual funds haven't done well, and we've lost money in various unit trusts. Our …Read more. Would the Real Malcolm Berko Please Stand up? Dear Mr. Berko: What stock exchange firm do you work for? Is it true that you accumulate a big holding of a stock for all of your clients and then write good things about that stock in your newspaper column so that millions of investors will read …Read more. Natural Gas Firm Looking Like a ‘Buy' Dear Mr. Berko: A long-time friend of mine (name omitted) who says he knows you well has had some good successes in the market during the past six years buying oil and gas limited partnerships, high-yielding convertibles and preferreds. He just …Read more.

Bailout Recipients

Dear Mr. Berko: Several of us would like to know how much government money was given to which financial companies, manufacturers and people. When we add up the numbers, they only come to a small portion of the $800 billion the government has given out. Can you give us a complete list of all the recipients? We've written two congressmen, but they won't give us a straight answer. Perhaps these people should be limited to one term in office. And what do you think of General Electric? I bought 150 shares when Mr. Buffett lent GE money and received options on 135 million shares. It seems Mr. Buffet may lose a lot of money because the shares have really fallen from $22 since then. Some of us think if GE was good enough at $22 for Mr. Buffett, it should be even better for us at this price. — E.P., Paducah, Ky.

Dear E.P.: A year ago, we were staring in the face of a banking scandal/collapse that, if left untended, would have made the crisis of the Great Depression mere child's play. Aided and abetted by venal greed, large brokerages, the big banks and mega insurers played a "scorched-earth" game with trillions of dollars of public money. The American taxpayer took it in the gut while insurance executives, brokerages and bankers were cumulatively paid hundreds of billions of dollars in bonuses and salaries. The public is aware that billions of insane bonus dollars were paid to criminally corrupt corporate executives who almost destroyed our financial system. But the public is not aware that 32 hedge fund managers, each of who earned over $500 billion, and myriad lesser-paid executives who only earned a few hundred million, paid taxes on their earnings of only 15 percent. When these fellows contributed huge sums to various congressional causes, Congress showed appreciation and passed a very special ruling that taxed those earnings at 15 percent. So perhaps we need to limit our politicians to two terms not one: one term in office and a second in jail.

Resultantly, the Federal Reserve created about $700 billion in stimulus money during the past dozen months to rescue the economy and small businesses.

And try as I did, I was unable to obtain an itemized list of banks, insurance companies, manufacturers and individuals who benefited from the greatest giveaway in the modern world. I would also like to know where our money went, but we may not have the right to know.

One member of Congress who occasionally open closed doors for me suggested that if the list of recipients were made public, that "stain would be disruptive and indelible." Still, as taxpayers, who are involuntary investors, we have a right to know who received our money, why the loans were made, in what amounts and for what collateral. However, Congress tells us that we do not have the right to this knowledge because it would could "stigmatize and frighten" the taxpayer. So if you guys want to know who received your tax dollars and how much, consider employing a lawyer to request this information under the Freedom of Information Act. I suggested this as an alternative and was told that the administration would refuse to release that information and cite "danger to national security." Wow, ain't that a jar of tightly packed premium pickles?

And yes, I'd be a buyer of General Electric (GE — $16), which is way under Warren Buffett's warrant price of $22.25. GE, at this price, should be in every long-term growth portfolio and I think it could easily double and nicely increase its dividend in the next five to seven years. Mr. Buffett has four years remaining to exercise his option on 135 million GE shares. It was late September 2008 when Mr. Buffett loaned GE $3 billion at 10 percent and received a five-year warrant to purchase GE. But don't cry in your beer for the guy. Just a few days earlier, Mr. Buffett lent Goldman "Sucks" (GS — $171) $5 billion at 10 percent for five years and got warrants to buy 44 million shares of GS at $115. If he exercised the GS warrants today, Mr. Buffett will have a $65 profit on 44 million shares and a gain of $2.9 billion.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.