Financial engineering did not create products that would help ordinary citizens manage the simple risk of home ownership - with the consequence that millions have lost their homes, and millions more are likely to do so. Instead, innovation was directed at perfecting the exploitation of those who are less educated, and at circumventing the regulations and accounting standards that were designed to make markets more efficient and stable.
--Joseph Stiglitz, "Harsh lessons we may need to learn again" (China Daily, 12/31/09).
Former Fed Chairman Paul Volcker puts it in even starker terms: in his view, the last significant financial innovation was . . . the ATM.
To name something is to own it.
So, instead of framing the issue as being "pro" or "anti" financial innovation, how about characterizing it as being for or against prudent financial "speed limits."
After the biggest financial crack-up since The Great Depression, you'd think there be little opposition to lowering the prevailing speed limit from, oh, say 200 mph, to maybe 50 mph.
But you'd be wrong . . .
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