The sheer size of bank profits, announced over the past few weeks, just doesn't feel right. Profits, according to classical economic theory, are the reward for capital well invested. They are made - we are told - by organisations that are led by energetic, entrepreneurial people, who bend over backwards to serve their customers better and/or come up with innovative products and services.
Does that sound like your bank? On the retail side there has been a small trickle of innovations, such as internet banking and offset mortgages. And customer service has probably improved slightly over the past 20 years. But not by much.
As for the idea of an entrepreneurial culture, British banking has yet to produce a Branson, a Dyson or a Sugar. Pressed to name a single banker, the average person might just come up with Matt Barrett, the chief executive of Barclays, but only because of his notorious admission in parliament that he wouldn't borrow on a credit card because it was too expensive.
If you're looking for an industry of innovative, customer-friendly businesses, banks don't obviously fit the bill. Yet once the dust settles, UK-listed banks will have reported more than £30bn in pre-tax profits for 2004. Even allowing that some money is made from overseas operations, probably about £20bn or more is earned in the UK.
There are two alternative explanations. One is that some of these profits are not fairly earned. Plenty of allegations have been levelled at the banks over the past few days, not least by Don Cruickshank, the former banking tsar. He also blamed an unspoken contract whereby successive governments have given banks special treatment.
Banking for small firms is still a virtual cartel, although the government has at least forced the banks to pay interest on business current accounts. The payments system is another murky monopoly that the government has long ignored. But there are signs that ministers are preparing to tackle the gross inefficiencies in the UK's financial plumbing. I understand they want to see real progress by April from the task force set up under the auspices of the Office of Fair Trading. If the banks continue to stall, Cruickshank's shelved proposal for a regulator could be resurrected.
The second explanation - not nearly so well aired - is that some of these reported profits are not profits at all. The banks only know for sure whether they have made a profit on a loan, transaction or investment when they get the capital back. That can take 30 years. The banks do their best to account for sour loans, duff investments and defaulting counter-parties by making provision as they go along. But in recent years the provision has shrunk, as the banks have taken a more positive view of credit quality.
If we are in fact in something of a credit bubble, which must eventually burst, and if the UK housing market is heading for a significant dive, then the level of provision will be insufficient. Moreover, there is anecdotal evidence that banks may be accounting too optimistically for their vast derivatives positions. A big financial shock - we haven't had a serious one since Russia defaulted in 1998 - could seriously dent bank profits.
Michael Howard's promise of council tax cuts is the latest in a string of perks and promised goodies showered on the over-65s by each of the main parties. The reason is plain: oldsters vote.
Yet, in some ways, this is the least deserving generation. The sixtysomethings and seventysomethings are lucky enough to have earned and saved through the longest period of economic prosperity on record. They have ridden both the postwar house-price boom and the stock-market boom. They have been beneficiaries of two of the biggest asset transfers from earlier generations - privatisation and demutualisation. And they are the last generation to be sure of final-salary pension schemes.
Compare that to the lot of the typical twentysomething, who comes out of university deeply in debt, won't be able to afford a home for 15 years or so, and is most unlikely, if present-day forecasts for the stock market and the housing market are to be believed, to enjoy the fruits of asset-price inflation so effortlessly reaped by his or her grandparents.
Adding insult to injury, this generation will foot the tax bill for meeting the unfunded pension liabilities of the growing army of public sector employees. Watson Wyatt, the actuaries, recently calculated that this has mushroomed to £690bn because of galloping longevity. It doesn't appear on the state balance sheet, but it is just as much a liability as the most gilt-edged gilt and would triple government debts at a stroke if it were included.
Youngsters need to get out and vote if they are to win a bigger slice of the economic cake.
Patrick Hosking is investment editor of the Times
