For example in energy, some forms of energy get subsidies, while others - especially renewables - are considered inherently unserious, and don't. Therefore finance models for renewables have to be more precise, the risk analysis has to be absolutely cast-iron, and so on. While other modes - like nuclear - get a pass.

But the problem here is surely that risk analysis that is not absolutely cast-iron gets a pass, not that people are actually doing their jobs when assessing wind farm finance?

What I want to do is force banks to either (a) demand equally cast-iron risk assessment from other sorts of projects, or (b) go play with their own money. Option (b) is, of course, only of rhetorical interest, to counter claims that I want to nationalise credit creation, since banks utterly abhor the though of playing with their own money instead of the central bank's.

So while Jake thinks banks aren't so bad akshually, I think banking in its current form is an epic disaster on the scale of the Black Death or a major natural catastrophe.

The black death killed off a double-digit percentage of the European population. Unless the banksters manage to trigger a sufficiently bad depression that it results in a serious shooting war (a possibility that I am a lot less sanguine about dismissing than I was a year ago), they will not rack up that sort of body count, however damaging their activities may otherwise be.

The first is that perfectly reasonable - and welcome - kinds of activity are vetoed in favour of other activities that are stupid and self-destructive. The industry's record of failure on this is absolutely reliable.

Cock-ups happen. Some of those cock-ups are even intentional. Others will be systemic. The solution to that problem is to create checks and balances - reduce the power of bankers and increase the power of parliamentary, civil service and civil society organisations. It is not to abolish the institution that makes cock-ups. If we did that with any consistency, we would soon run out of social institutions.

So you have the paradox - or the Big Lie - of an industry which claims to be engaged in strategic risk management for everyone's benefit, but which is actually the primary creator of risk and social insolvency.

The point of having banks is not to reduce risk. The point is to increase it in a reasonably controlled manner. Because a society without banks runs too few risks, and therefore misses out on benefits it could have obtained.

The key term here is in a reasonably controlled manner. The problem currently is that there is too little control of the risk, and that is the problem that I am addressing.

It is not the only problem with banking as it is currently practised. Among the more prosaic problems are endemic fraud and rampant racketeering. But dealing with those are outside my area of expertise.

- Jake

Friends come and go. Enemies accumulate.