From the very beginning of the financial crisis, the source of the problem has been evident: big banks committed systemic fraud to cover up their stupid business decisions, and made stupid business decisions to cover up their systemic fraud. (That puts the phrase “circle jerk” in a whole new light, doesn’t it?) When the government gave money to JPMorgan to buy Bear Stearns, (so that Bear Stearns didn’t have to go through the indignity of a bankruptcy), and then gave money to Fannie Mae and Freddie Mac, so that they didn’t go bankrupt, and then gave money to AIG so that they didn’t go bankrupt, and then gave hundreds of billions to various international banks so that they didn’t have to go bankrupt, We The People should have gotten the picture. The federal government exists to serve the banks.

The banks have to be stopped. The government won’t do it, so we will have to.

Here’s a modest proposal – a thought experiment if you will.

Suppose everyone who had a credit card with BofA, Chase, Citi or JPMorgan just quit paying their credit card bills – and deposited the money they save into a locally owned and operated bank? What would be the effect? Well, to start with, you’d deprive these companies of cash. They are already teetering on the brink – and they need to be pushed over the brink.

But if the Too Big To Fail banks fail, won’t that bring the global financial system crashing down?

Uhm, no. It will bring the insolvent banks crashing down. It will expose for all the world to see which banks are insolvent and which aren’t, and when that is done, the solvent banks will be standing and able to service the legitimate needs of business and consumers.

This idea that the world NEEDS these big banks is just stupid. The world needs trustworthy, solvent banks, not banks that – in spite of their great corruption and egregious insolvency – are just Too Big To Fail. We need insolvent banks to fail.

Suppose everyone who has money in one of those TBTF banks withdrew it and bought physical gold instead? Wouldn’t that apply even more pressure to the bad banks and make the good banks more obvious? Many of the TBTF banks have leased out the gold they claim to have in reserve. Such a move would drive the dollar-price of gold even higher because the liars would be forced to buy gold on the open market in order to meet their obligations. Of course, they couldn’t actually do it and would be driven into bankruptcy – which is what we want. No government oversight required – just consumers and businesses exercising their power of choice.

As it is, the bad banks who have engaged in rampant fraud, deceit and corruption, have been propped up with taxpayer money, and the good banks that are run by honest, competent and ethical people are being forced to compete in an arena where the BAD GUYS get bonuses instead of prison terms. Since the government won’t punish them, we will have to.