When New Isn’t Better
The cost of Wall Street’s most recent innovations can be measured in the trillions of dollars. But they have also damaged the whole notion of financial innovation.
“While Silicon Valley’s innovations have brought enormous benefits to society, the value of Wall Street’s innovations seems a lot less clear,” write James Surowiecki who looks at things like credit default swaps, collateralized debt obligations and other recent financial inventions. “The cost of all these mad-scientist endeavors can be measured in the trillions of dollars that vaporized when the housing bubble burst. But another cost has been the damage done to the whole notion of financial innovation.”
