Innovations Aren't the Problem | Arnold Kling | Cato Institute: Commentary

Innovations Aren't the Problem | Arnold Kling | Cato Institute: Commentary: "First, many of the innovations were profitable not because they added social value but because they exploited regulatory anomalies. Second, the companies that lost money on these innovations were not allowed to fall by the wayside — instead, they were bailed out.

Many pundits claim that we allowed the financial system to be self-regulating during the euphoria. This is emphatically not the case. Without the anomalies created by the Basel capital regulations, the financial system would not have rewarded these innovations."