Through a gla$$ darkly II

I can't put my finger on the exact moment it happened, but at some point – in the not-too-distant past – we exchanged our society for a mere economy. If we look far enough into the past, we find that there was a time when there were human beings roaming the earth who were social creatures, not only economic ones. I still had the feeling growing up, in what was anything but a perfect society (hell, we hadn't even achieved civil rights and equality yet ... ooops, we still haven't ... but we pretend that we have) but it was still a society. There was something social about everyone I knew, even if the realm of their acceptance only extended to the neighborhood. In most cases, though, it went further: to the church congregation, the community, and even, in some cases the nation. Little of that exists anymore, because in the meantime, money talks, and there is nothing else to say.

Despite this, I have not yet given up all hope. OK, I've given up most of it, but there is still a kernel left, and it is on this basis that I am going to try to put together a most basic primer on banking, finance, and economics. I know many of you are now rolling your eyes – and I don't blame you. How often do we have to go through this. Well, the teacher in me says, "until we understand what we're talking about". There is nothing I am going to say that none of you has not heard before. My hope is that I will say it in such a way that if you haven't grasped the basic principles by now, you will by the end of this series. Bear with me, at least my intentions are honorable.

As promised the last time, here's what I am going to try to do: first, we're going to look at what a bank is and how it functions – once again, in simplest terms. I then want to examine how a bank, as a privately owned organization fits into the grander scheme of what we might call a national economy. Yes, I'm approaching this very step-by-step, level-by-level – even hierarchically (against my better nature) – just so we all have a common understanding of how it all fits together. I'm not offering solutions, I think they become fairly obvious once an insight into the "system" has been gained.

And now, for my major disclaimer: I'm sure there are any number of you finance, banking and economics wizards out there who will testify that I'm oversimplifying and reductionally distorting the "truth" of the matter. If I am wrong in principle, let me know. I don't claim to be perfect or to know it all, but I do believe that I generally understand what is principally at stake.

Note: This series was originally published in slightly modified form on the Daily Kos.