I’m not sure why we’re even wasting our time with Paul Volcker and the so-called Volcker Plan, as there’s no way it’ll have a chance to become law, as it would devastate Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC).

It wouldn’t be devastating simple from losing the business associated with investment banking, but it would be an enormous weight upon the organizations to extract what has already been painstakingly integrated into the companies, and is still being integrated.

Another problem with all of this is the unproven assertion that investment banks in general was the problem which caused the banks to nearly collapse, when in fact it was the bad mortgages that started the financial avalanche, some of which came from the misguided rules from the Community Reinvestment Act which forces banks to originate loans to applicants based upon nothing else than they are a minority, regardless of their ability to pay.

Some would challenge that, but the reality is percentages of mortgage applicants have to be minorities, and if loans aren’t made to them banks can have their charters taken away. This sets up the banks to have to make dubious loans, as well as set up for failure those receiving the loans, as they aren’t able to pay them when any unsuspected difficult time comes like it has over the last couple of years. That was a large problem in bringing down the banking system, and one which continues to be brushed aside because it isn’t politically correct to point out.

The bottom line is the Volcker plan does nothing to address this and is being used as a tool to keep our attention on the risk associated with investment banking and executive bonuses rather than the overall underlying causes of the mortgage fallout, which was in a big way consequences coming from forcing banks to make loans to those that in reality wouldn’t have otherwise been offered loans. In other words, it was a government-induced problem, and not solely banks engaging in risky behavior coming about from offering big bonuses to their people. That was a part of it, but a smaller part than is being asserted.

The Volcker Plan really isn’t much more than a call to reinstate the Glass-Steagall Act, which some Senators have already suggested.

But volcker goes further, throwing out the idea hedge funds and private equity would be under government oversight as well, and if they failed they would be allowed to, but just under the management the “resolution authority,” a new entity Obama wants to create for that purpose.

As you get deeper into the proposed plan by Volcker, it becomes easily apparent there is no way this will become a reality. So to waste the time that is being spent on it as if it is a has a chance of passing and becoming law is ridiculous, to say the least.

While it’s obviously a trial-balloon, there is really no hold it’s gaining, and to even continue on with it is a waste of time and resources.

It’s just another smokescreen from Obama who seems to be clueless as to what to do next, as throwing money at the problem hasn’t worked, and people are growing fatigued and cynical as to government attempts to fix what the market itself is able to do much better.

All this is is a diversion meant to buy some time, but in the end we’re going to have to deal with this as a business problem and not a government one.

Having to grab the 82-year-old Volcker out of obscurity to keep this in the public eye seems to speak to the panic the Obama administration is in, and that they have run out of answers. That’s good, as the government was never meant to be the one to give answers in the market.

The Volcker Plan, if it was even considered legitimate, would be devastating to the banking industry. But since it can’t even be taken as a serious attempt to address real problems, and it is just another group of regulations which would hinder financial institutions, there is nothing there but a giant waste of time by politicians still looking to gain some political capital before the issue dies down even more. You would think they had better things to do, but that would be asking too much of the majority of our representatives.