The economy, explained, with stories and surprises. Imagine you could call up a friend and say, "Meet me at the bar and tell me what's going on with the economy." Now imagine that's actually a fun evening. That's what we're going for at <em>Planet Money</em>. People seem to like it.
August 18th, 2009
Episode 174 of 964 episodes
We started our debate on financial innovation a few weeks ago with Mike Konczal and Charles Calomiris. Today Tyler Cowen of Marginal Revolution and Felix Salmon of Reuters join Mike to answer the question: has financial innovation in the last 25 years has been positive or negative? Felix Salmon says that financial innovation was a good thing — until about 25 years ago, when it became a way for bankers to get around regulation. Tyler Cowen says that it's not financial innovations that caused economic calamities — it's the leverage — banks being able to borrow huge amounts of cash with little money down. While Mike Konczal argues that it's all about competition: if a rival bank comes up with a new innovation, you need to compete whether it's dangerous or not.