The proposed federal rescue of the nation's financial system has investors breathing easier, but one Tampa financial executive is steaming about the unfairness of it all. He's right. Every honest participant in the system should be outraged.

Longtime president of GTE Federal Credit Union, Wendell "Bucky" Sebastian, makes local mortgages and looks after the investments of savers. Most of his mortgages are sound and all the money on deposit is safe. But the normally jovial Sebastian isn't happy.

"We were the ones not taking stupid risks," he explains of his and similar credit unions and banks. "The bad guys made billions of dollars. I used to believe virtue would be its own reward. Now being virtuous is beginning to look like you're stupid. As a human being, I'm incensed."

He agrees that federal intervention is essential to get the bad debts out of the banking and investment systems, but he's rightly angry about a few details that have largely escaped public attention. One is the interest rate paid on certificates of deposit, which are federally insured.

Banks are advertising rates of 4 percent, even 5 percent, while Sebastian's credit union is offering around 3 percent.

"These banks are raising money at these rates because they can't borrow anywhere else. A conservatively run institution like ours, people ask, how come you're only paying 3.05?"

Customers go for the highest rates because all institutions are insured equally. It's a system rewarding irresponsible behavior.

"Why should anyone do business with us? It's a perversion of common sense. We could issue a 12 percent CD, and it would be insured, until we went out of business. We bankers are not required to be responsible. We, the American public, are insuring risky business."

And now it goes far beyond banks to include even money markets.

"The worst thing about the bailout, we gave de facto insurance to every financial institution in this country, in effect, all the money on Wall Street. You just took real insurance and made it worthless. Insuring every deposit in the country is insane."

How the nation got in this jam is no mystery. As a reaction to the Great Depression, the nation had set up a regulated mortgage system to encourage home ownership.

"The whole thing was working beautifully," until standards slipped and safeguards dropped, allowing mortgage buyers Freddie Mac and Fannie Mae to get "fat and loose," as Sebastian puts it.

"Over the last 10 years, partially from urging of Congress and from the executive branch, and from non-regulated entities, slowly they peeled all the rules away until it was almost impossible to turn down a mortgage.

"The incentive is more, better, faster. It gets you on a treadmill that goes faster and higher every minute. They made it go a little faster every quarter, so sooner or later you're going to have a heart attack and die. It's irrational."

"Just because there hasn't been a fire in a week, you don't close the firehouse. It's not surprising we had a conflagration."

Now, even the best-run banks and credit unions are feeling the pinch.

"Secondhand smoke can kill you," he says, and explains: "If all your neighbors got mortgages and weren't asked to verify employment, and if they had inflated appraisals, suddenly there could be 10 homes in your neighborhood in foreclosure. You're going to die from secondhand smoke.

"I have signed off on $15 to $20 million in restructured mortgages. We want them mowing the grass, keeping their kids in school. We're taking in half as much each month from them. That's nobody's fault in our loop. It's a travesty.

"The other people all outside the regulated framework got away with it. We didn't do any of the things they did. We made good loans to good members under good conditions. But conditions have changed.

"From developer right down to the finance companies, I don't think anyone was acting in the best interest of the homeowner. They have all gotten their money, and they're gone.

"The average citizen has done everything by the book. They're being asked to bail out the highest-flying risk takers in my memory."

The vast majority of us, like Sebastian, have done nothing wrong yet are forced to help cover bad loans . We have little choice but to pay, but we don't have to like it.