The real shame about the mess in Cyprus is that it's all so unnecessary.

All the complicated proposals aimed at restoring the solvency of Cyprus' insolvent banks, all the confusing false flag plans, all the Great Game geopolitics surrounding the natural gas resources, the threat to the unity of the European Union, and the unsettling of the Cypriot people.

It's all unnecessary. There's a much better, and simpler, alternative that has been available right from the start.

Let the failing banks fail.

What if Congress raided up to 10 percent of your bank account to bail out the government?

That's exactly what could have happened in Cyprus if its parliament had gone ahead with a proposal to tax depositors for a 5.8 billion euro bailout–the first of its kind in the ever-escalating euro zone debt saga.

"This is an extraordinary and extreme step," Adam Schneider, chief adviser at Deloitte Center for Financial Services, told CNBC.com. "If you're a company that needs cash, you sell assets, but you don't seize employees' cars in the parking lot."

"Now that this idea has been floated, it's reasonable to ask whether other countries with significant debt would consider this step," he added.

The United States, unlike its European counterparts, is the issuer of the currency in which its debt is denominated. This means that the U.S. cannot be involuntarily forced to default on debts or abandon its currency, unlike European nations that borrow in a currency controlled by the European Central Bank.

Still, that doesn't stop many from worrying that the U.S. debt burden is already too large.

When the Senate report on the JPMorgan Chase "Whale" fiasco revealed the fact that the bank's management had received a rebuke from federal regulators, it was natural to assume that this was specifically a JPMorgan thing—another consequence of those derivatives losses.

But that assumption could be wrong. Recent statements from the Office of the Comptroller of the Currency seem to indicate that other banks might have also been dinged.

A recent study from the FDIC makes it clear that no one has any idea what compliance with financial regulations, including the Dodd-Frank financial reforms, actually costs.

Goldman Sachs conspiracy theorists take note: the financial crisis of Cyprus has come to a head on what is very nearly the 10-year anniversary of the conviction of a secretary accused of embezzling at least $7 million from her bosses at Goldman.

The money was wired out of the accounts of three London-based Goldman bankers into an account held in her maiden name in a bank in Cyprus.

The Senate report on JPMorgan Chase's London Whale fiasco revealed that federal regulators secretly downgraded the bank's management rating last summer—a fact kept from investors and the public until last week.

The downgrade of JPMorgan's management resulted from the Office of the Comptroller of the Currency finding that the bank suffered from "lax governance and oversight in the chief investment office," as well as other "oversight deficiencies," according to the Senate report.

This news is another blow to JPMorgan, which had long enjoyed the reputation of being one of the best managed megabanks in the U.S. That reputation was already diminished by the derivatives trading losses in its London chief investment office. And then there was that report from the Federal Reserve citing weaknesses in JPMorgan's capital planning process.

Tim Geithner is looking to sell his home. And judging by the listing price, the former Treasury Secretary hopes he can do with his former digs what the government managed to do with its bailout of insurance giant AIG—turn a profit.

Five years after large U.S. financial institutions threatened to capsize the global economy, a seemingly endless parade of negative headlines continues to bedevil the banking industry.

But even though some of the headlines may not look good, the scorecard shows banks are winning what one analyst has called a "war" against them.

Like the rest of the market, bank stocks bottomed in March 2009 but have rebounded ever since.

(Read More: How Tiny Cyprus Could Still Have Big Market Impact)

They've even done better than the major averages, which have been on a powerful run in 2012 and 2013, and analysts are getting more vocal in their crowing over the industry's health.

"Despite these results, or perhaps because of them, the government is now making a new attempt to cripple the banks," Dick Bove, the outspoken vice president of equity research at Rafferty Capital Markets, said in a note to clients. "Fortunately, it is likely that no one is going to listen to the attackers at this point."

The KBW Bank Index surged nearly 30 percent last year - more than twice the Standard & Poor's 500 - and is up another 10.5 percent in 2013, ahead of the S&P's 8.8 percent rise, though they've hit some resistance this week in the face of another European debt headache.

Bove alleges that a media-government cabal "oriented toward one goal: Get the banks," has formed but failed to take down the financial industry's major players.

Most recently JPMorgan has been in the government's sights over the London Whale trading debacle that cost the country's largest bank more than $6 billion in losses and generated a public relations disaster.

(Read More: Former JPMorgan Exec Blames Others for 'Whale' Loss)

Bove said the anti-bank crowd should focus on more compelling facts about the industry: Earnings have grown 14 straight quarters and profits rose 20 percent to $141 billion, the second-best ever, in 2012, with more likely to come this year.

Tyler Cowen's column in Sunday's New York Times makes a strong case that it is a mistake to see economics as a cold, calculating science bereft of morality. At its heart there has always been something deeply moral about economics, an often-unstated premise about the equal moral worth of people and their interests.

But, when he tries to argue that there is something wrong with considering matters such as trade and immigration primarily from the viewpoint of national interest, Cowen also unintentionally exhibits a moral blindness that inflicts many economists.