At first Vito says to give him a living but never discuss the family business with him. Then at the meeting with Tessio and Clemenza Michael says Carlo will be his right hand man in Vegas. Now why did the don allow that?

Easy. Keep your friends close, keep your enemies closer.

I always thought FFC went too far with that. But SC is right: Mike wanted to use Carlo as a conduit for false info provided to Corelone enemies.

While giving Carlo a false sense of security.

Two birds with one stone.

It was a ruse. Not only did it keep Carlo "closer" it made Michael appear to be weak, which what he was up to at that point. It was also such an obviously bone headed move, it would get the traitor (Tessio) to make his move.

But consider this also. Michael tells all that his negotiations will answer questions and solve problems. Negotiations with who? Hearing this, Barzini knows that Michael is not negotiating with him, his main adversary. Barzini then wonders who Michael is negotiating with, and, if nobody, then he realizes that it's a ruse.

Yes, it was such a great ruse that it turned a long time loyal Capo to look at how things were and turn traitor.
In a way Michael used his father's old and trusted friends like useless bait so he could make himself look weak. Keeping him in the dark only let Tessio see one out and he took it rather then go under.
I know it is only a movie, but what you expect a guy to do. The company looks like it is about to fold, so you move on to a firm that you feel will still be there. A smart move. At times I wonder why Vito treated his long time friends with such disrespect.

What if Tom had felt the same way Tessio felt when Tom was pushed aside and was left outside the box.
The only thing that kept Tom in was that he figured things out before the old man died and was let in that something was truly in the works. He could see the strength of the new regimes. He knew that there was real hope. But No, they let the Old Capos spin in the wind and take all the shit. Is this a act of a old and trusted friend GODFATHER?
Would Fredo have done what he did if the old man was still alive? Or if he was treated better?

What would have happened if he (Tom) was kept blind, what if both Clemenza and Tessio AND Tom talked and felt the same way? Hopeless. Would Tom have stepped up to the plate and along with the longtime capos and stepped over Michael to save the Family and their own lives and loved ones if things were really as bad as things looked once the Old man was gone?

Yes, I could understand that a father would not have handled that with his own son. That was Michael's big mistake.
That is why you have to wonder why Don Vito would let that happen to his two longtime Capos, who came up from the streets with him, so many years ago.

Vito asked for trust, faith and loyalty in a critical time. He (and Mike) judged it necessary to do some things which other people didn't understand at first. Tom and Clemenza gave that loyalty even though it went against their better judgment.

Tessio didn't and so it goes.

Probably at that point Vito had second thoughts about everyone except Michael, so it was just good operating procedure to keep plans secret. Anyway he was the boss so it was his prerogative. Harsh but that's the business...

Sure, Vito asked for trust, faith and loyalty in a critical time.
But he didn't give the same in return!
That is the point I am trying to make.

Vito was dying, his future wasn't at stake. Blindly do as I ask, but, I don't have the same (trust, faith and loyalty) to give back to you.

See, I feel that both Clemanza ansd Tessio gave their trust, faith and loyalty for many years and at a time when it was needed most, Vito didn't return it to them the way they needed.

Hmm. I don't quite see it that way. Vito's intelligence, leadership abilities, wisdom and vengeful nature were such that over the years he had earned the right to extreme, even slightly irrational, loyalty from his oldest followers. It was not an organization of equals. Vito was the top dog.

There were lots of times that Vito acted without telling others what he was doing, made decisions that appeared questionable on the surface or did things that indicated he didn't fully trust his subordinates. Sending Luca on a secret mission without telling anyone, obtaining phone logs of calls made from and to Tessio and Clemenza, murdering Fanucci without checking with Tessio and Clemenza (and possibly exposing his friends to vengeance), or seemingly suing for peace after his first born son was murdered, were actions of someone who ultimately was only answerable to himself and trusted few people completely.

Those who accepted his leadership and didn't question it, even when things got really bad, were ultimately rewarded.

Vito challenged his doubtful retainers to trust Michael as they had trusted him. Clemenza had enough wisdom to do that. Tessio, who was smarter, did not. Unfortunately for Tessio, he was not as smart as Vito.

In real life of course mob leaders like Tom, Clemenza or Tessio who had lost as much power and territory as they did during the Five Families war, would have been demoted or even "terminated" once Vito took direct control back. His loyalty to them precluded that option...

As Tessio said in the novel "Any man can turn traitor."

FS I see your point but I also think that he had the right to ask Tessio and Clemenza to have the same faith they had in him on other matters as they did on his choice of a successor.

Like I said, Vito used them like he didn't care about them. It is that simple. Vito knew this may happen when he treated either or both men like that. That is why he knew that they may turn on Michael when he died. Using them like he did in this rouse drove Tessio out. That was the price they would gamble on to pull the plan off. Hell, Michael didn't need Clemenza or Tessio, he had his own right hand man now. They were of his father's era, not his.

It is no different than when Carlo used his wife and beat her to bring Sonny out of the compound. A real gamble. What if Connie doesn't call the compound that night? Once before she kept her mouth shut and Sonny didn't catch it till he came over later. What if Sonny hears about it later and has Carlo whacked in a more carefully planned removal. And if Sonny did have Carlo whacked, no lost to them, they were using him anyway, just like Fredo would be used by Roth.

You can certainly look at it that way, and you wouldn't be wrong. But the Mafia is all about greed and survival. Loyalty makes the difference between subordinates who are "businessmen" (as Michael described Neri and Rocco to Tom in II) who might turn on the Don when things get rough, or people who'll stand by the Don no matter what. Michael had no reason to automatically assume that he'd command T&C's undivided loyalty simply because he was Vito's son--doing so would have endangered him and his family. He needed to provide a test.

You might argue that Vito simply dumped T&C when he told them to "be a friend to Michael." And you wouldn't be wrong there, either. But again, Michael's survival was at stake. Vito had retired, and even if he commanded them to support Michael, he couldn't guarantee their loyalty.

I just can't blame Tessio for taking his way out. Vito was dead and so was his loyalty to the man. There was every reason to believe that Michael was going to preside over the demise of the Corleones. Why stick around? As Michael said "It's a smart move. Tessio was always smarter."