There’s a really good chance this post will make no sense whatsoever. You see, it’s Spring in the Sonoran Desert and that means allergy season. If you have never suffered from this affliction then you cannot imagine how fuzzy it makes you feel. If you have then you can empathize.

Anyway, the WSJ has a report out tonight that the banks are working overtime in an attempt to circumvent the TARP restrictions on compensation and bonuses. Toss that in with the AIG forest fire and you have people up-in-arms, probably justifiably so. Naked Capitalism is raging about this evening and doing a good job at it.

Personally, it seems to me as if this is the perfect argument for carving the banks down to size. They are going to find a way around any regulation that might be imposed. We just have to deal with that fact and play the game their way. You get bailed out this time but we’re going to make sure you can never hold a gun to our head again needs to be the mantra.

Let them do whatever they choose with compensation. It’s the shareholders’ problem because once carved up they will cease to pose a threat. As the big banks now exist, they are an axe that will hang forever over the financial system. They know it and they know we know it. The only logical solution when you find yourself in this position is to remove the threat. The only way to remove this threat is to make the failure of any bank inconsequential.

Not for a second should we think that Congress will pass any legislation that will reign in the compensation schemes or for that matter render us safe from being taken hostage by the banks in the future. The two are joined at the hip by money. Their mutual interest has little to do with the interests of the country.

So, let’s quit worrying about bonuses, pay scales and golf tournaments. If properly resized, the banking industry will present fine opportunities for investors. Those same investors disabused of any notion that they and management will be bailed out by the taxpayers if they stub their toe badly will most likely exercise more oversight than has been the case to date. The diversion of significant profits to the pockets of employees of the shareholders will rightly get the kind of scrutiny it deserves and was sadly missing in the last go around.

I for one would like our representatives to concentrate on more substantive long-term issues. A good way to start is by bringing back a modified Glass-Steagall and removing the banks once and for all from our teats.