I don't have anything against financial innovation, Dan (or should I say, you wanker).

But I think Jesse's right that lasting financial innovations usually aren't created during bubbles--they're just taken to their (il)logical extremes during bubbles.

Bubbles don't build financial infrastructure, and the resulting crashes often destroy it. The best you can say is that bubbles provide a good way of stress-testing existing financial institutions.

In the early 1930s, as you write in your book, Dan, the U.S. financial infrastructure wasn't up to the test, so that nice man FDR built us a new one. FDR 1, bubble 0.