Lessons learned from business school...and applied to the bailout

Ok so let me give you the gist of a case/session I've seen presented by one of the faculty members of the MIT Sloan School of Management present several times to one of our biggest executive education clients.

The basics of it are a negotiation exercise where two employees are having a disagreement and a third person (the boss) is acting as arbiter. The boss has $50,000 to use as a bonus or incentive as they see fit but the employees do not know that the boss has the money to give so until the boss brings it up (or the boss doesn't have to bring it up).

When the professor does the debrief he tells a story about his kids arguing and asks the class what happens when he offers his children money to stop arguing. Inevitably most of the class understands guesses that the children stop fighting for a short period of time but only learn that they can make money by fighting. This does not solve the problem it merely postpones it and in most cases it enforces bad/destructive habits

So, tell me again why essentially irresponsible organizations should be given $700B without severe regulations? Won't they learn from this that acting irresponsibly is profitable and that the government will always bail them out?

I encourage everyone to read the progressive alternative to the bailout proposed by Rep. Donna Edwards and others.