Hence the paradox at the center of the so-called fractional banking system. We’re willing to put up with the occasional financial crisis—on average once every decade or so—to make it possible for loans to be made, which in turn helps companies grow, hire more employees, and pay them higher and higher wages and wealth be created. In exchange for increasing our standard of living, we have collectively decided we will permit the occasional financial crisis, despite their incredibly high costs, and misery, when they do occur.
