Of all the innovations of the past 20 years, one of the most powerful has been financial innovation. Wall Street “quants” used technology and math to create new financial instruments that sliced and diced mortgages and sold the resulting "derivatives" around the globe. In the end, this financial innovation triggered a huge crisis that nearly tanked the entire global economy. We are still suffering from low employment as a consequence.
Larry Summers, who just withdrew his name for consideration of running the Fed, the US central bank, was a key innovator in financial innovation. In the Clinton Administration he pushed for deregulating the banks and for not regulating the new financial products. He believed in financial “modernity,” the creation of new financial products and services and the efficacy of markets to always make the right decisions. In his way, Summers was a huge promoter of innovation. And the failure of that innovation is what tanked his candidacy for the Fed. Congress, especially liberal Congress people, hold him personally responsible for the havoc that followed financial innovation.
So let’s take a minute to understand something that most designers, entrepreneurs, artists and creators in general tend to forget. Creativity and innovation are value-neutral. You can do good and do bad with the new. You can even think you are doing good and still do bad with innovation.