Now, I don't have sunstroke. I know why banks are private. But, aside from the private-interests-question, I am asking the logical question. Why are they private?

Banking, at least as far as commercial banking goes, is the most pro-forma business there is. It is downright ritualistic. There is no room for "talent" in banking... or for "enterprise"... or for "risk"... or for "innovation". It could be done by computer - in fact, it is done by computer.

The only parts of banking which have anything to do with "free enterprise" involve either competition between banks or competition outside of commercial banking.

Why does anybody "need" competition between pro-forma businesses? What is that supposed to accomplish?

As far as competition outside of banking goes, the narrative on that story has just been written... as it has many times before.

Small bank, big bank, community bank... why are any of them private?

In truth, when they "work", banks are automatic; when they don't, they are a disaster... and their privateness works overtime to achieve the latter... just like insurance companies.

*****

Speaking of which, why are insurance companies private?

Where would the initiative and innovation come from? Just look at what those bankers did with that!

Nope, ain't no good reason. Why isn't Citibank a credit union?

http://www.shellschoolofknowledge.com.au/images/photos2/21.jpg

Naw.

Seriously, I'd guess that House Hanover made the transition into capitalists with their bells and whistles intact thru the Brits sheerly bloody-minded determination not to be like the French. At least the ruling class.

But I'm sure you have a better answer.

The whole point of the OP is this: it's historical. There is no logical reason why banks should be private - other than the fact that the banks are the most important possessions of the most important Capital.

But, the reality as it is today outstrips the superstructure of explanations, rationalizations, apologies, inferences, slogans, and lies. Anything you can claim for "free enterprise" is a bad idea when you look at banks. None of it rises to even the level of a dubious explanation. The reason banks are private is because of political power, pure and simple...



Our aristocracy has all the power.

But, they deserve it by virtue of being the military class...

They haven't been the military class in 300 years.

Alright, let them be the military class again.

NO. They are stupid and incompetent and corrupt. They can't be the military class.

Alright then, they can be parasites with all the power.

But, they deserve it by virtue of being the military class...

etc.

http://rubell.files.wordpress.com/2008/05/charles-ii.jpg

Us primates, let the cream rise to the top.

http://oldelmtree.com/discussion/index.php/topic,6475.60.html

"The WORLD is set up in hierarchical structures. We Americans did not invent that. Nor did the aristocracy ten centuries ago. It was an evolutionary process that placed some people higher in the pecking order than others. Just like the same hierarchical structures exist among many other primate social groups."

...pick their ass with a stick, too.

And eat shit...

Hmmm... maybe they have a point.

Sometimes there is no argument left. Sometimes there is just red monkey butt.

http://2.bp.blogspot.com/_pqVUcKxCIGc/SyBNLbzqZXI/AAAAAAAAAJs/7GDqo8hfIMc/s400/Baboon_Butt.jpg

[div class="excerpt"]
The ideas of the ruling class are in every epoch the ruling ideas, i.e. the
class which is the ruling material force of society, is at the same time its
ruling intellectual force. The class which has the means of material
production at its disposal, has control at the same time over the means of
mental production, so that thereby, generally speaking, the ideas of those
who lack the means of mental production are subject to it. The ruling ideas
are nothing more than the ideal expression of the dominant material
relationships, the dominant material relationships grasped as ideas; hence
of the relationships which make the one class the ruling one, therefore, the
ideas of its dominance. The individuals composing the ruling class
possess among other things consciousness, and therefore think. Insofar,
therefore, as they rule as a class and determine the extent and compass of
an epoch, it is self-evident that they do this in its whole range, hence
among other things rule also as thinkers, as producers of ideas, and
regulate the production and distribution of the ideas of their age: thus their
ideas are the ruling ideas of the epoch. For instance, in an age and in a
country where royal power, aristocracy, and bourgeoisie are contending for
mastery and where, therefore, mastery is shared, the doctrine of the
separation of powers proves to be the dominant idea and is expressed as
an "eternal law".[/quote]

My tomfoolery aside, I take your point. When ya consider that banking was the prime lever of power for the early bourgoise....no way in hell they'd let that get away.

And if things get rocky, Mr Anonymous into the breach.

is an exercise in washed brains.

Couple o' characters just say "it is" cause it's "always been that way", no matter that it hasn't, and they are off and running at the mouth.

You do know how to put a point on things ;)

At any rate, how do you think that impacts us? Beneath it all, they still ARE the military class aren't they? I can see your point that Goldman and Co doesn't have an army, but..they kinda do.

"Lending by the banking industry fell by $587 billion, or 7.5 percent, in 2009, the largest annual decline since the 1940s, the Federal Deposit Insurance Corp. reported Tuesday."

So... The private banks are acting exactly, precisely, as one would expect... so much so that they are creating the very real danger of a "double dip", and the same assholes who wouldn't think of nationalizing the banks in 2008 (New Deal solutions are not "appropriate" in the present say, declares Obama... and they didn't even nationalize the banks during the New Deal)... those same assholes are reduced to alternatively wagging their finger at or begging to the very same rejuvenated zombie banks:

Troubled banking industry sharply reduced lending in 2009
By Binyamin Appelbaum
Washington Post Staff Writer
Wednesday, February 24, 2010
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/23/AR2010022302120.html


Lending by the banking industry fell by $587 billion, or 7.5 percent, in 2009, the largest annual decline since the 1940s, as the number of troubled financial institutions rose sharply, the Federal Deposit Insurance Corp. reported Tuesday.

FDIC Chairman Sheila C. Bair said that some small banks have reduced lending because of financial weakness, a problem the Obama administration aims to address with a proposal to pump $30 billion in new federal aid into community banks.

The FDIC considered 702 banks to be in some danger of failing as of the end of 2009, more than double the number at the beginning of the year.

But Bair said that the vast majority of the lending decline was the result of cutbacks by the nation's largest banks, which have tightened qualification standards for borrowers and increased the proportion of money that they hold in reserve against unexpected losses.

"Large banks do need to do a better job of stepping up to the plate here," Bair said.

The decline in lending is a looming issue as the economy begins to recover. Companies start by returning to full capacity, filling open desks with new workers or running equipment more hours each day. But for the recovery to continue, for businesses to expand and employment to grow, lending must begin to expand, too.

The decline also has become a major political issue amid broad public anger that the federal rescue of the banking industry has restored profitability but not the flow of loans.

The FDIC, which reports every three months on the health of the banking industry, said Tuesday that the nation's 8,012 banks posted an aggregate profit of $12.5 billion in 2009, up from the depths of 2008 but far below the profits recorded during the golden age of the mid-2000s.

The largest banks accounted for most of those profits as a growing number of smaller banks have struggled to survive losses on commercial real estate loans. Almost 30 percent of all banks lost money in 2009, the largest share of losers in the 26 years of available data.

Regulators closed 140 banks in 2009, and Bair said she expected the number to rise this year.

There were modest signs of better days ahead. The FDIC continues to project that loan delinquencies will peak this year. But the industry's health tends to lag behind that of the broader economy as banks absorb losses from lending mistakes, and Bair said banks would continue to convalesce through 2010.

"We're still bumping along the bottom of the credit cycle," she said.

The amount of money that banks extend to customers has fallen for six consecutive quarters. The drop in the last three months of 2009 was about $129 billion.

Banks cut back most sharply on funding for construction and development, reducing the volume of such loans by 23.6 percent. Business lending followed close behind, down 18.3 percent. The reductions in those two categories accounted for most of the overall decline. Lending to individual borrowers declined more modestly.

(more)


http://www.freewebs.com/targetblog/ObamaFingerPointing.jpg

Why are banks private?

Destroy a bunch of business by starving them of capital flow and then finance capital picks up the pieces?

The old balance sheet is soggy, who knows what the real state of various "businesses" is, everything economic is up in the air and so the money guys sit on the cash. That's pro forma too. There ain't no section of the quarterly report for economic "responsibility" any more than there is for social or environmental or any of the rest.

"But, but, but... I acted for the good of community."

"That's good to know. Maybe the next guy won't."

It is all hyperbolic silliness. The cynical political fuckers know it too. They vamp for the cameras but their "policy" is to hope it fixes itself while they make the appropriate noises.

http://reason.com/assets/mc/mwelch/2009_11/obama-praying.jpg

Christ-a-mighty! That is exactly it...to a tee...