And what is its purpose? However large or small capital and labor, services come into play such as a bank to coordinate an economy in a community. Capital purchases material and labor to kick start and sustain an economy. Yet there is this myth that capital troves alone are responsible for a thriving business activity as though capital were always on reserve for the taking without ever referring to its accumulation predicated on previous labor that had brought material onto a productive level and thus surplus capital generating this triadic thrust.

A bank, therefore, holds capital that has been thus generated, along with the start up shareholders base with the aim of capturing depositors working surplus capital. If the community is viable and depositors need not conduct a run on their own accounts, banks are able to develop surplus capital to the purpose of investing through personal loans and mortgages thereby developing the community’s well-being. If the management and board are pragmatic, and leverage sensibly rationed, there is no need for exotic derivatives as the bank will be its own steadfast insurers in the event of an unlikely shortfall. Another purpose of banks in theory is to ensure circulation of capital in order to avail business and labor’s potential to generate even more capital toward circulation.

Sounds simple enough if the bank system were run by George Baileys—not even a need for FDIC. However, since time immemorial when idle labor was conscripted to build great monuments of symbolic power and wealth by the Greed Ideologues, the internal systemics of capital were privy to the chosen few whether for good or bad.

The current crisis reflects this; even with bailouts the banks defy the aim of distribution—like cutting off the proverbial nose to spite the face—but it cannot be perpetuated for very long. For in the end bank owners and depositors will sense the self-destructive policy, hedging a decent return on their money, and demand that dead capital be revived to grow the economy.

In a strange way, the absurdity of today’s banks will actually spur the stock market—which has always been the smarter way for investors with balls—as those fed up with the cost of hoarding at paltry bank interest rates will be routed to alternatives.