Zombie Banks

Death to financial institutions!

The only justification for the extraordinary privileges enjoyed by lightly regulated banks, the extraordinary leverage available to essentially unregulated hedge funds and the mere existence of the so-called shadow banking system was that they served a greater social purpose than the personal enrichment of the participants.

It turns out that they do not.

So they should, collectively, exit the scene. Their corporate existence should be terminated. Whether the institutions are regulated out of existence, their activities are taxed to destruction or their leaders taken out and summarily shot is a matter of national taste, cultural and legal tradition.

Let's face it. Collectively, the major banks are zombies, as in, walking dead. Their problems simply overwhelm their capitalization, currently--and with any conceivable level of government support. One can argue specific cases, but there are also a couple of inarguable cases, starting with Citi.

You can't bring a zombie back to life. You can bury it.

And once buried, before the stench of the corpse has fouled the entire community, you can approach the next step of the dialectic. The resources currently being put at risk to salvage of the current system should be allocated with a strategy that will assure that, rather than being frittered away in a futile exercise, their placement will facilitate that next stage in the dialectic.