First off, capitalism is the best economic system in the world because it demands and rewards hard work. It challenges us to be excellent.

But like everything else in life, capitalism can be perverted and exploited. Bad people can find ways to cheat. That's why the federal government oversees the American economy to make sure there is some justice and honesty in pursuit of profit.

But once again, the feds have let us down. The Securities and Exchange Commission is supposed to protect investors, the folks, from cheaters and irresponsible risk takers. Former California Congressman Chris Cox is the head of the SEC, and he issued no warning at all about the bad lending practices that have caused the U.S. economy to wilt. Mr. Cox did not look out for the folks.

Another example, there is massive evidence that the American oil companies profited when speculators artificially drove up oil prices. And when the speculators got out with their profits, the price of a barrel of oil dropped big time, but not our cost at the pump. The oil companies will keep that as high as they can for as long as they can. Expect more record profits from ExxonMobil and their brothers, even as Americans cut back drastically on oil use.

The Department of Energy is supposed to make sure the oil companies don't gouge, but Energy Secretary Samuel Bodman has done nothing, said nothing. He's a regular Sgt. Schultz, a Hogan's Hero to the core.

But do you know who did take action against the oil companies? Sarah Palin. She got them to give money back to Alaskans. Good for her.

There's more. The Federal Aviation Administration is supposed to keep things under control in the skies and at the airports. Are things under control? No, they are not. FAA Chief Robert Sturgell has done nothing.

There's more. For years, the Bush administration, like the Clinton administration before it, did little about illegal immigration. It was only after this program and a few others demanded action that a crackdown began.

"Talking Points" is fed up with all the bull: allowing major corporations to traffic in bad loans, standing by while oil companies price a vital commodity based on speculation, watching the nation's air system collapse, and failing to control illegal immigration is unacceptable. And that's what has happened in this country over the past few years.

The next president has one big mess to clean up, and it starts with appointing tough-minded watchdogs, not lazy lap dogs to run federal agencies.

Right now, we need Congressman Barney Frank, for example, to resign from chairing the banking committee. He's a disaster. We need Barack Obama to tell us why Lehman, Fannie Mae and Freddie Mac and their employees donated an astounding $520,000 to his campaigns. John McCain also received money from those concerns, more than $150,000.

Every American should be furious about the economic meltdown. It's not your fault, ladies and gentlemen. It's not my fault. OK? It's the federal government's fault.

It's obvious the feds are not looking out for us. That must change.

And that's "The Memo."

Pinheads & Patriots

"The Factor" crew was at Yankee Stadium Tuesday night to watch a historic event. Derek Jeter broke Lou Gehrig's record for the most hits ever at the stadium, which is being torn down in a few weeks. Jeter is a good guy, does a lot of charity work, so he is a patriot.

On the pinhead front, say hello to our little friend, Janeane Garofalo.

(BEGIN VIDEO CLIP)

JANEANE GAROFALO, COMEDIAN: I don't call them Republicans or conservatives. They've become a party of small-minded, very petty, mean, unrestrained id.

There is — what do they stand for? Torture as a policy. They stand for homophobia. They stand for no reproductive justice. They stand for denying global warming.

BILL MAHER, HOST, "REAL TIME WITH BILL MAHER": And I must say...

JOHN FUND, COLUMNIST, WALL STREET JOURNAL: So what should we do, jail them?

GAROFALO: That would be great.

(END VIDEO CLIP)

She's talking about Republicans, if you missed it at the top. And she says the Republicans are mean. But she's not mean or anything, is she?

Janeane, three words: Kool-Aid pinhead.

You can catch Bill O'Reilly's "Talking Points Memo" and "Pinheads & Patriots" weeknights at 8 and 11 p.m. ET on the FOX News Channel and any time on foxnews.com/oreilly. Send your comments to: oreilly@foxnews.com