Why is every response to a problem in capitalism, doomed to address only symptoms and not the causes?



Why is it out of discussion that, not only is there a mechanism available to private lending institutions, to collect interest based on the expectation that our money can work for us, but they are also allowed to leverage their assets and take over the process of money creation out of the reach of control of the central banks (which, by the way, only model banks as "intermediaries" or not at all, as if they were lending existing money)?



Why the twofold pitfall of removing private banks' need to be solvent, by having full reserves, and allowing them to create the currency? Why is virtually all currency created as debt to banks and the economy run on "liquidity" (later removed from circulation), and these private institutions are allowed to inflate the money supply based on market fallacies or with tricks, and with no real risk?



Assessment of the value of banking business, by rating agencies is a way to say that society and state trusts the private sector to care that the financial system will work correctly. This is a fundamentally misplaced expectation. Private companies do not care about the economy, and do not have any liability to society, and of course no democratic accountability.



Banks are supposed to be supervised, but there is no real evaluation of the credibility of their borrowers or the soundness of their investments, and that would be OK if they were working as all other companies, with liabilities to other legal entities. For banks, the risk of lending previously non-existing money is passed to the taxpayer. This would not be a problem if they were public! But, if "bank deposit" is in fact *a loan* to a bank, where the "depositor" risks loses, then banks need to be public, so that there can be democratic accountability. The two cannot be mixed. It is imperative that this will change.



Currently, private banks do not simply have their money work for them, but they actually have non-existing money work for them. They usually place part of their gigantic profits, made with virtually no risk other than closing the bank, to the gambling economy. This alone is proof not of ability, but of scam by pure usury (well, scam is a form of well respected ability, it seems)!



The first problem is collection of interest and the expectation of money working for us, without appropriate redistributing taxation to both bankers and the use of "financial instruments" in the gambling economy. Money placed in the gambling economy, without being taxed, is a way to allow banking business to grow in size, regardless of simplification of "financial instruments", and increase inequality, as well as their influence to politics, or even directly to government if they get large enough, interfering with democracy.



Second, for banks to remain in the private sector, they need to (a) be liable to depositors (i.e. full-reserves), and (b) borrow the currency they lend from the state (e.g. a state-managed central bank), or use their owned assets. Currency creation policy target must be handled by the state and assigned to the central bank (central bank retains instrument independence).