> Michael Pollak's argument comes down to two propositions:
> (1) Contemporary insolvent US banks are "investment banks"
> dealing in financial instruments of such incredible complexity
> that even the people who "created" them are unable to
> understand them fully;
That's not part of Michael's argument at all. I have heard that kind of argument elsewhere, and I agree: it's silly to believe that no one understands them. But as a strawman, it's pretty good!
> What is so incredibly complicated are the incredibly toxic
> derivatives on derivatives on {derivatives on derivatives} etc.
> none of which serve any positive economic function at all and
> could be wiped out (together with all the fictitious capital
> represented by them) with only the most salutary effects on the
> real productive economy.
On the other hand, there are people who actually don't understand them, that's clear. Oh, there I go again, sounding like a technocrat. I don't want to distract this thread, but let's come back to this sometime: because every single point in that sentence is wrong.
/jordan