The administration’s unwillingness to make any major players pay a price, in banking or in medicine, prevent any real reform. In both cases we will have reform. The question is whether we will name the problem, greed, apply it to more than just some scapegoats, own it for ourselves, and free ourselves of it. If not, crisis will breed revolutionary change, in both cases.

But to return to the first point, there must be an alternative to the current system, and smaller but equally greedy banks are not the answer. You don’t think smaller banks are greedy? then why did they go nuts over commercial real estate? We need a third way.

Save yourself the suspense. The returns are already in. “Our” democracy is “their” instrument. The market system regulates the government, and not the other way around.

And about that monopoly cum crisis issue. Capitalism has always required crises, and always will. Not a planned economy, you see. And a calumniated leftist long ago explained why monopoly was built into the genetic striving of capitalist development.

You academics pretend that the world is one of your seminars, where conjecture holds sway and brilliant ideas light up the finest egos while the hoi polloi await your guidance. And you have the gall to talk about bankers’ “perception of invincibility”! You might as well hold an astrology conference; at least they have funky hats.

Thanks for your thoughtful reply. There is certainly a danger that people’s discontent is manipulated.

The aim, I would think, is a populace that is politically aware, and demand a democratic process that works in their interest instead of for large corporate interests.

How to get there? PUBIC FUNDING OF ELECTIONS would be a good start.

So what is a bank? does it really have an operable definition in capitalism?

The moral compass that guides nations of people is ever-changing and largely circumstantial. During WWII, the killing of Nazis was on the whole, perceived as a moral act. In its day, the relative “success” of free market ideology (greed is good) in producing a prosperous American middle class, produced a meta-morality along the lines of Adam Smith’s “invisible hand”.

Sadly, the systemic changes needed today will not be driven, on the whole, by conscience, but rather by an emerging shared vision of a clear and present danger and consensus regarding theory and method for avoiding that danger.

In 1930′s Germany, the perception of a clear and present danger drove a process of systemic change that produced the Third Reich and a nation of people who were guided by the moral compass of their circumstance. The Nazi theory of social interaction and transaction was disconfirmed by the jury of practice, but the price paid in deliberation was astoundingly high.

Which brings us back to first causes — What is our aim?

We once had a culture of fair dealing in which large wealth accumulation was viewed with suspicion. Now, we have rent-seeking celebrity executives whose wealth is viewed as an indication of worthiness instead of pursuit of craven self-interest.

“Ho-hum. Another stupid law. Another stupid treaty. Another stupid constitution. So how will they get around it this time? ”

Woody Allen wrote:

“More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly.”

(1935 – ), My Speech to the Graduates

Some disaster capitalist like Paulson would shout, “By Monday we won’t have an economy! STAMPEDE!”, and the rout would be on, just as in 2008.

We already have the Prompt Corrective Action Law. Out the window it went.

In that connection, I got a grim chuckle out of this today, from The Economist.

http://www.economist.com/opinion/displayStory.cfm?story_id=15603267&source=features_box_main

The German constitutional court ruled two decades ago that the Maastricht treaty was acceptable only if its no bail-out provisions were respected — so any bail-out would have to be disguised to avoid legal challenges.

Ho-hum. Another stupid law. Another stupid treaty. Another stupid constitution. So how will they get around it this time? Such a bland and world-weary tone.

The only abiding principle of relevance is that human beings are inherently social and in their sociality, they seek to devise methods for organizing their behavior into predictable patterns of collaborative action. (The invention of money as a medium of value exchange is one example.) When the material interests of one group become irreconcilably divergent from another’s, there is war, fought using the means at hand.

The warring that has occurred throughout history is cyclical in name only, because the means of combat is never the same. Though our idea of war seems constant, replacing bows and arrows with nuclear bombs changes the historical facts on the ground, and so too, the mathematics of conflict.

Today’s corporations have become nations of people with substantively divergent interests, who have at their disposal the means to nuke their opponents’ ability to construct stable systems for organizing their interactions and transactions into useful and reasonably predictable patterns. By assuring a chaos of unpredictability, corporate nationals are able to prey upon the nation of the dazed and confused.

The changes required are systematic rather than reformist but the weapons wielded by those who embrace the status quo, are the material, psychological and sociological equivalent of a nuclear arsenal.

To begin with, it is necessary to cast off the false “science” of naturalistic Newtonian economics. We must begin with an aim.

“The Fed has an “innate conflict of interest” in trying to protect consumers while fulfilling its mission of safeguarding the rest of the financial system, billionaire George Soros said at a conference in New York today. “When Barney Frank called it a joke, I think he’s right,” Soros said.”

http://tinyurl.com/y994g6g

“At current scale, our megabanks bring no social benefits and great social risks. ”

Hmm, I think someone else agrees.

Mr. Stiglitz wrote Tuesday, 9 February 2010, The Independent:

“The system, he says, is “corrupt”.

His sheer indignation at what he calls “the Great American Robbery” – that multi-trillion dollar bailout for the banks sanctioned by the Bush and Obama administrations – is as awesome as the sums involved, and as understandable.

He reminds us that the banks have effectively tried to keep “a gun to our heads”, that says that if we don’t keep them going on their terms then they will “kill the economy”.”

http://tinyurl.com/yeknaot