Hi, my name is Terry Smith and I'm a developer and aspiring entrepreneur.

So this morning I am being assaulted on Digg and other sites with news that AIG is paying $160 million+ in bonuses.  Congress is clearly pissed, and are all saying “Oh my god, this will never happen again.”  Yeah… right.

These bailouts are turning into on of the greatest catastrophes in North America’s history.  On the part of the auto-makers and their ridiculous unions and executives fighting to protect high costs that are (and I believe will) drive them out of business.  Any so it should be; that’s capitalism, and no business is going to last forever.  But where each of the big 3 fail, 100 others will rise to take their place. 

Reid Hoffman (CEO, LinkedIN) recently wrote in a large number of places that start-ups can bail us out.  Armed with innovation and creativity and the lack of executive red tape that makes implementation possible, most of the suppliers and people in the pipeline would remain in business and in the face of bankruptcy, would almost certainly offer better deals to fresh faces.  And these startups could finally tell the unions to go to hell and renegotiate contracts that will help keep the innovation alive.

But back to the point of this article: on the part of the banks (and in part the automakers), where is the person who will tell the banks that THEY ARE GOING OUT OF BUSINESS?  There must be enough people out there with the experience and determination who can take over as CEOs and make the changes necessary to restore the trust and turn around what has surely become the worst PR disaster in these banks’ history.

The government needs oversight in key sectors like finance in order to keep control over the nation and to prevent capitalism from destroying the entire sector.  What is happening in the banks now should’ve happened long ago.  But the government needs to take it one step further: they need to tell the current executives to fundamentally change and restructure the way things get done.  Cap salaries, no more bonuses, and the list goes on.  And if they can’t perform, then the government needs to go to the shareholders and tell them that they need to fire their disastrous management and bring in people who will make the necessary changes or they will let them sink into insolvency and will pick up the pieces after the fact.

I heard this morning that these bonuses were contractually obligated and that there was no out clause.  First, that was a dumb move.  But more importantly, why are these executives still taking their bonuses??  What we have here is a fundamental difference between start-ups executives and executives brought in specifically to make money for themselves and their shareholders who care nothing for their business.  Any reasonable executive would’ve turned their bonus away, knowing it’s yet another PR disaster that they simply cannot afford and that their business is that much more likely to have to jump through even more hoops if they need more funds in the future.

Where are the people willing to make the necessary changes?  Am I missing something?