Lenders present greatest challenge

What to do about the banks? They are sucking up taxpayer money. Yet they resist lending, leaving the economy to wallow in its funk.

When Treasury Secretary Henry Paulson first asked for $700 billion to fund the Troubled Asset Relief Program the intent was to use the proceeds to relieve banks of toxic assets, making it easier for them to attract private capital.

Yet before the buying program was up and running, Paulson ditched the strategy in favor of capital injections that took the form of preferred stock. Even then, the government didn't secure deals as generous as investors such as Warren Buffett managed.