In the wake of 2008, we have seen the collapse of consensus and authority. The New Deal? Banished. The free market? Discredited. A pox on Keynes and Hayek. Individual self-interest has been liberated to dance naked down the avenue, demanding attention be paid: I am the general will! Indeed, the streets are full of naked souls chanting their particular general wills. Adam Smith, in a more innocent and less casual age, argued that multiple self-interests would coalesce in markets to spawn economic virtue. So far that has not occurred. One reason is that our capital discussion is more democratic than a Fugger family meeting, creating asymmetries of knowledge about underlying issues. From a distance, prudent banking seems simple: more capital, more rules, less leverage, more lending. Banks self-destructed, got bailed out, so they owe "us," whoever us is. Banks must scatter credit around, despite the fact that that's how we got into this mess. Interests must be aligned. The view from the big banks, say the Dimon suite at J.P. Morgan Chase & Co., is different. A superpower needs big, global banks. Central banks like burly banks; shareholders, proxies for the demos, want go-go banks; consumers demand ATMs, credit cards and mortgages; small businesses, El Dorados of jobs, cry for cash. Too much capital depresses returns, making banks sheep in a world of publicly traded wolves, turns off shareholders, bums out once-well-paid bankers, sends risk flowing to unregulated rivals and libertarian-leaning foreign havens. This, to quote Mr. Dimon, is "anti-American." In fact he said it twice, for emphasis.

All these solutions -- small banks, big banks, nationalized banks, capital-lite and capital-heavy banks, universal, ringfenced, Glass-Steagall banks -- are promoted as sweeping answers to tangled, complex, elusive problems. And yet, despite the asymmetries of information, another, even deeper issue undermines authority. The yahoos may be ignorant of finance, but regulators, investors and bankers did screw up. Undeniably. There is no science of capital; it's a Ph.D-level guessing game. As Dimon badgered Ben Bernanke to admit, economists have little to say about the relation of bank size and capital to economic performance. Dimon, wink wink, was suggesting that burdening his bank with arbitrary (meaning too high) capital would hurt the economy. Of course, it might easily work the other way: Maybe a capital-intensive regime would stimulate Main Street. Who knows? Glass-Steagall, after all, coincided with a historic boom. Dimon's question not only revealed Bernanke as one of those naked-came-I souls, it exposed the soggy underpinnings of both economics and finance, including, well, his own authority.

Here's the big question: What's the point of these banks anyway, and what interests are most important? Are the banks a) utilities; tools of national interest, trade or job creation; incubators of manufacturing; enablers of home-ownership; pillars of the Federal Reserve, or are they b) free-enterprise money machines that will shower goodies on all peoples by sniffling after their own self-interest and not getting hassled by European gnomes in the buffet line? Say you answer b. Should a giant, too-big-to-fail bank, oozing moral hazard and market subsidies, be allowed to operate with relative impunity and a thin layer of protection, meaning capital, even if it has avoided disaster in the past and is certifiably a true-blue, job-creating American bank? Given the size of these institutions, either a or b would seem to call for some restraints on untrammeled enterprise and some enhancement of protection, meaning capital. But there are no final answers, people being people, and where that line gets optimally drawn remains fuzzy. The Fuggers, the Muggles and the Medicis aren't much help either.