Forget Punishment -- This Is About Survival

Let 'em all go. Let 'em take the hit. Let 'em go under.

I hear it over and over again. I keep hearing it: Let all of the banks go.

And it makes me sick.

It is time to recognize that the banks are the economy. It is time to recognize that this plan was the best thing we could have because we were going to see, and could still see, a total collapse in the economy.

We can be as punitive as we want. We were totally punitive when it came to Lehman. We let them have it, right in the kisser. We really showed them. We really hurt them and their recklessness. And the aftermath of that deliciously punitive action is a worldwide meltdown such that this plan cannot be put into place fast enough. The plan now has so many strings that many banks that should participate in it now won't -- it might be easier to run a bank in a really risky way, plunder it, and hope to get away with it rather than negotiate a sale of it.

Somehow we delude ourselves into thinking that the goal is to punish the wrongdoers or assure that it will never happen again, as if somehow the crisis is past and we didn't just lose Washington Mutual (WM - commentary - Cramer's Take) or Wachovia (WB - commentary - Cramer's Take) and are about to lose other obvious ones that I don't even have to name anymore. The notion that somehow we can punish while we are still trying to fix this situation is just ridiculous.

So, here's an optimal outcome: Most of the banks quickly collapse in the country. We devolve quickly to a Fortress Four: Bank of America (BAC - commentary - Cramer's Take), JPMorgan (JPM - commentary - Cramer's Take), Wells Fargo (WFC - commentary - Cramer's Take) and U.S. Bancorp (USB - commentary - Cramer's Take), plus perhaps Citigroup (C - commentary - Cramer's Take) after this Wachovia debacle. All the others are allowed to fail. We then make it so that deposits are insured up to $2 million, and beyond that a fee scale gets put in to insure large corporate depositors.

Then we shut everything else down and start over with transparency.

We handle the job losses as best as we can, try to contain them to 15% to 20% of the economy; credit will be virtually nonexistent, because other than the banks above, few people willing to put their money in Treasuries.

And all the bad actors will be punished! Along with all of the good actors, of course!

Now there's some justice!

I hope everyone will be very, very happy that the bad actors got what they deserved.

It should bring a smile to everyone!

At the time of publication, Cramer was long JPMorgan.

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