If you've ever given a friend a loan with the expectation you'd eventually get your money back, you were ignoring the old English proverb "Lend your money and lose your friend." When you lend someone cash to help them out, the last thing you want to see is that friend using your money in wasteful ways. You expect them to use it for the purposes advertised when they asked for the bailout. It's upsetting when they don't. It's even more upsetting when you hear your pal actually had money in his pocket when he was asking you for yours.

That's why (if the Financial Times, CNBC and the Wall Street Journal got it right) the actions of Merrill Lynch and Co. may make you feel like the friend who lent money to the friend who was living the high life all along.  According to the FT, the Journal and CNBC, Merrill rushed to pay out upwards of $4 billion in bonuses in December (instead of the usual January) to its executives even as the company was preparing to report a $15.45 billion fourth-quarter loss and just three days before the firm was acquired by Bank of America in a government-brokered deal to save it.

That $15.45 billion dollar fourth-quarter loss prompted the new owner, Bank of America, to ask for and receive an additional $20 billion in government bailout money (on top of the $25 billion it has already received) just a few days ago. So Merrill was giving executives billions of dollars in bonuses when thousands of workers in the industry were being laid off and the company was failing?

Merrill Lynch CEO John Thain resigned today from Bank of America Corp. in the wake of the revelation, but why didn't we know about this before? Why did Congress approve such huge blank checks to these folks without better oversight? Why did Treasury Secretary Henry Paulson push so hard for the bailout without making sure the financial industry would use the money as intended?

It's no wonder the U.S. House of Representatives voted 270-155 (in a symbolic and bi-partisan vote) to reject President Obama's request to release the $350 billion remaining in the bailout fund to help the financial industry. We've heard about the industry's retreats to fancy resorts, about its hoarding of bailout monies it was supposed to lend, and now this.

The vote by the House won't actually stop the money from going to the financial industry because the Senate has refused to block the money. But the House voted anyway because, as House Financial Services Chairman Barney Frank (D-Mass) put it, "There is a degree of anger in the American public at what they think is a very unfair system that gives benefits unduly and disproportionately to some of those who caused the problem, while denying health care and unemployment compensation and a decent higher education for working-class people." Ya think?

What are your thoughts? Was this vote (even as a symbolic act) a good one? Or was it a waste of time? Is Congress providing adequate oversight of the bailout monies? Should the $825 billion Obama economic stimulus package be approved despite the issues with the earlier Bush Administration bailouts?

I was telling my sons recently that President George W. Bush will always be referred to as "Mr. President," no matter what he chooses to do after leaving office. But the truth is, the moment Barack Obama utters the phrase: "So help me God," President Bush will become Citizen Bush. I caught a brief glimpse of the process in 2001 when I covered the arrival of President Clinton in New York when he left office.

I was covering the arrival of Mr. and Mrs. Clinton at John F. Kennedy Airport. It was a brutally cold day--an emotional one for the Clintons. They touched down in New York as private citizens in an aircraft most people would recognize as Air Force One. In fact though, because Mr. Clinton was no longer the sitting president, Air Force One actually flew under the call-sign "Special Air Mission 28000." The trappings of the office had already begun to fall away.

When President Bush wakes up on Wednesday, he will not receive the classified intelligence briefing known as the President's Daily Brief, he will not have to make any decisions of life and death. He will be a former president with a lot of time on his hands. How do you think he should use it?

Mr. Bush leaves office with a record-low 22 percent of Americans believing he's done a good job as president (according to a New York Times poll). How will history judge the 43rd President of the United States?

Mr. Obama takes office with far better numbers. His favorable rating is at 60 percent. Nearly 80 percent of the Americans polled are optimistic about the next four years with Mr. Obama as president. How do you feel as we look forward? How long can the new president expect to enjoy the support of the American people in these tough times

We are on "live" from 4 A.M. until 3 P.M. on inauguration day. Let us know what you're thinking and how you're feeling on this historic day. I'll do my best to read some of your comments on the air throughout the day.

When I called Leonid Sokolsky last week to see if he could fix a couple of my suits, I didn't know much about him. A friend had recommended him. Said he was a Soviet immigrant who'd been working as a tailor out of a little shop in Burbank for more than 20 years. Said he was a nice man who did good work.

When I called him and asked if I could bring over the suits, Leonid offered to come to my home instead, "If it is better for you," he said in a Russian-accented English. I accepted his offer and he arrived at the appointed time. I was delighted to have found a tailor who made house calls---even more delighted when he arrived today with my suits, perfectly mended. 

But as I talked to this skilled tailor, I started to realize Leonid Sokolsky also had a story worth telling. Here was a tailor whose heart might need mending. After working his entire life making things fit just right, 62-year-old Leonid Sokolsky's life is what's coming apart at the seams. It was in a near whisper that he revealed he is going bankrupt. He has already lost his home to foreclosure. The Tailor of Burbank--a man who has served celebrities and businessmen in the Valley for more than two decades, is living in an RV on a driveway in Van Nuys. "Now, I'm technically homeless," he said with a shrug.

It's true, he told me, he'd worked at that 950 square foot shop on Olive Avenue for 22 years. He had come to California after working as a tailor in Chicago for nine years, after moving to America from Ukraine at the age of 31. It was a good life and things had gone well until a couple of years ago. That's when a new owner took over the building and he was told the rent would be tripled. Leonid packed up his supplies and looked for a new place to rent.  But it turned out rents had skyrocketed everywhere during his 20 plus years of tailoring in the Valley. While Leonid knew how to make a perfect break in a pair of slacks, knew how to fix anything one would wear, he didn't know much about money. 

So when someone suggested he could somehow afford to buy a home in Burbank, rent it out, live in the guest house/garage of the home and make a go of it, he didn't even ask the realtor the selling price. He just figured if the lender said he could afford the $5,700 mortgage payment on zero down, if he could get a renter to pay for a huge chunk of what he owed, if he could just keep the business going to pay the rest, everything would work out. 

It was a long list of "ifs." It was a list that was too long. According to Leonid, the renter he took in was savvy and knew how to avoid paying the rent. The city told him he couldn't run the kind of business he was running out of his home--something about the sewing machine using too much horsepower. And of course, the mortgage payment was crushing. When the property tax bill came due, it was over. He gave the keys to the home back to the bank. Leonid now believes that everyone along the line knew he was on financial thin ice when he took on that big mortgage--everyone, that is, except him. "It was a game," Leonid told me. "I did not know."

And yet, Leonid isn't looking for sympathy, isn't looking for a bailout. He's got a grown son and a daughter who live out of town and who occasionally visit, a grandchild (and three ex-wives, he told me with a sheepish grin). He's got his RV. He's got a cat. He's got longstanding clients whom he still services when they call. "I'm not complaining. I'm happy with my life," Leonid told me.

I asked him if it was OK if I told his story to you. I thought he might even want me to put his phone number in the story so that a little extra business might come his way. But Leonid asked me not to do that. He doesn't want to take on new clients. He is hoping to find a garage somewhere in the Valley where he might set up his equipment cheap. The Tailor of Burbank wants to keep his hand in the business. He just doesn't want to work the 16 hour days he once worked as a young man. Leonid Sokolsky is 62 years old, after all. These are the beginning of his golden years.

We lived in Westchester County, New York for a couple of years. It was a lovely village just 30 minutes outside of Manhattan. But when it was cold, it was cold, and gray, and depressing. When friends would call from California in the dead of winter to tell us about warm days like the one we're enjoying today, I was never as amused as they were about how we were suffering.

Sure, making a snow man with the kids is fun. Sledding is too. But shoveling snow off my driveway and trudging through the stuff to and from here and there wasn't. The radiator in our kitchen rarely worked. The wind off the Hudson River hurt my face. I missed Southern California deeply--especially during the winter.

I love California. I was thrilled when we had a chance to move back. How about you? How do you feel about our great Golden State? It turns out an increasing number of our fellow Californians are finding it difficult to live here. They're doing the opposite--they're moving out of California. Who can blame them? California is expensive, it's crowded, and our policy-makers have let us down repeatedly. Our transportation infrastructure is decades behind other major cities around the world. Our public education system-despite the sometimes heroic efforts of individual educators--is failing.

Michael R. Blood writes about all of it today in an Associated Press piece that caught my attention. He says: "The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July, 1, 2008. California lost a net total of 144,000 people during that period--more than any other state, according to census estimates"

Blood points out the loss "is extremely small in a state of 38 million. And, in fact, the state's population continues to increase overall because of births and immigration, legal and illegal. But it is the fourth consecutive year that more residents decamped from California for other states than arrived here from within the U.S., according to state demographers.

The AP story cites our unemployment rate (the third-highest in the nation at 8.4 percent), the huge number of foreclosures (a projected 236,000 through 2008), the state budget deficit and the number of people living without health insurance (one in five) as examples of what's gone wrong in our state. What do you think? Will things turn around?

At least we've got the weather. You can't help but smile on a day like this. Despite our problems, I still love California. But what should we do differently to improve our quality of life? Is the sunny weather enough to keep you here?

When candidate Obama was running for president, questions were raised about Barack Obama's relative lack of experience in international affairs, in national security matters, in military strategy. Was he qualified, some wondered, to be president at a time of war given that relative lack of experience? Voters were assured all would be OK because he would be surrounded by a strong team of advisers with deep experience in all of those arenas. 

Did anyone think they meant Leon Panetta?

Panetta is the former Clinton White House chief of staff who more recently has been running the Leon and Sylvia Panetta Institute for Public Policy in Monterey. The Los Angeles Times and others are reporting that President-elect Obama has tapped Panetta to be the next director of the CIA.

While Panetta is a respected former White House aide, a former congressman, a former head of the Office of Management and Budget, he is not a former anything in the intelligence world. Is he the right choice to head CIA? 

Some people are already raising questions--among them--California Senator Dianne Feinstein. Senator Feinstein happens to be the new chair of the Senate Intelligence Committee, someone Mr. Obama doesn't want to anger given the support he'll need if his new CIA director choice is to be confirmed by the Senate. Surely she was consulted and she signed off, right? Apparently not.

"I know nothing about this, other than what I've read," the senator told reporters. "My position has consistently been that I believe the agency is best served by having an intelligence professional in charge at this time." 

Intelligence professionals are weighing in. From the Associated Press: "I'm at a loss," said Robert Grenier, a former director of the CIA's center and a 27-year veteran of the agency who is now managing director of Kroll, a security consulting company. Grenier goes on to tell the AP the lack of intelligence experience puts Panetta at a "tremendous disadvantage" and that "right now the agency is confronted with numerous pressing challenges overseas, and to have no background is a serious deficit."

While Panetta was a so-called "consumer" of classified intelligence from the CIA when he was a White House chief of staff, he isn't experienced in intelligence gathering or intelligence analysis. Will intelligence professionals take him seriously? Is he qualified to run the CIA? Did President-elect Obama make a mistake? Or is this a smart choice--selecting a non-professional with no ties to agency operatives or past methods? Will a non-pro take a fresh approach to the job that might actually benefit the agency and more importantly, the American people?

We haven't had a good Obama discussion on this page in a while. Let's ring in the new year with our first!

I haven't made a secret of the fact I graduated from USC. But I confess: I came pretty close to being a UCLA Bruin.

I'd been accepted into the political science program at UCLA and was planning to transfer to the Westwood campus (from Cal Poly Pomona) when I won a scholarship from the Radio and TV News Association of Southern California. One of the judges on the committee was USC Journalism Professor Murray Fromson. Professor Fromson encouraged me to apply to USC and said grants and scholarships would make it affordable. I got in, the grants and scholarships materialized and I've been a Trojan ever since.

But the truth is, I've always had a tremendous respect for UCLA and for the UC system in general. I think the UC and Cal State systems are among the things that make California a great state. For California high school students, it's always been a relatively affordable way to attend a top tier university. That's why a debate underway within the UC system to accept more non-Californians (at the expense of California residents) has me concerned.

According to a story by Larry Gordon in Sunday's Los Angeles Times, UC officials are talking about increasing the number of out-of-state students at UC campuses to generate more revenue. Gordon writes: "At UC campuses, in-state freshmen pay about $8,100 in fees, not including room, board or books. Because California does not provide funding for out-of-state students, about half of the extra $20,000 they pay each year covers UC's costs and the other half is profit for the system..."

He adds: "About 10% of UC's 220,000 students, including those in undergraduate and graduate programs, are from outside of California. But only about 6% of the undergraduates are non-Californians." That compares to figures from the U.S. Department of Education that show about 16% of undergrads are from out-of-state or out-of-country at universities and colleges nationwide.

UC regent Judith Hopkinson says California should be more in that 15-20% range for out-of-state students: "We ought to look at it," she told the Times. "Because I believe it is in the financial benefit of the university in the long run, I like to keep an open eye to all options."

What do you think? Is this simply a reality of tough times? Should the UC system accept more out-of-state students (who will bring in more money for the university system) even if it means fewer California students will get in?

Good morning and Happy New Year friends.