In This Bank Mess, We're Tying Our Own Hands

Doesn't it seem like, at times, we are our own worst enemy? The biggest pool of capital out there right now, the one that most wants "in" to the horrendous horror show of banks, is private equity. But we have some rule that says they can't buy more than 25% of a bank. Can someone tell me why that rule isn't suspended? Can someone tell me why we won't let it happen? Are we worried about conflicts or management styles? I mean, could you do worse than former CEO Kerry Killinger at Washington Mutual (WM - commentary - Cramer's Take) if you tried? Why have that rule?

Or how about the absurd specter of Bank United (BKUNA - commentary - Cramer's Take), Downey Savings (DSL - commentary - Cramer's Take) and Corus (CORS - commentary - Cramer's Take). Does anyone in government genuinely believe these companies can make it? Why not seize them now before the inevitable runs that would be so debilitating?

Or how about the FDIC's list of troubled banks. What good is that without Washington Mutual, the most troubled, not on the list? Makes the list a joke and a p.r. stunt.

How about how we don't encourage foreign banks to come in and help them with guarantees, and we limit it to American banks. Who the heck cares where the savior banks are from?

Or how about the short-selling rules. When that little project was announced, we had a major move up in financials immediately. That allowed Merrill Lynch (MER - commentary - Cramer's Take) to take in a huge amount of capital, and you could have made a ton of money if you participated in it and then sold it higher. Then we suspend the rules and the big pushdown begins. Did anyone notice the cause and effect there? But the SEC is not saying or doing anything.

What happened to all of those moron academics who told us that when we changed the rules because of the penny spreads, it wouldn't matter? I guess they are with the same clown academics who verified the models that allowed AIG (AIG - commentary - Cramer's Take) to wreck its company. They are never called on the carpet. Of course, the big brokers never fought these rules, because their private hedge funds benefited so much from them.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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