It's hard for me to see the value added in some of financial innovations and institutions. Credit card companies often simply allow people to indebt themselves more. Insurance companies must have had crazy margins before Geico started this price war. Did this rate swap add value to the situation?
What if we had a tax structure that encouraged real long-term investing? We already have long-term taxes rates for 1+ year of owning a stock; how about additional tax breaks for 5 or 10-year ownership? Or how about higher short-term rates and a more gradual long-term rate?
The short-term craziness of financial markets today is a real distraction from what matters. People don't think for the long-term. That's why we had these dumb loans: the people in charge of these companies were only thinking a few years into the future.
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