There’s been lots of talk since late last year about the plusses and minuses of financial engineering, including a debate (see blogs by Felix Salmon and Tyler Cowen) about the overall merits of various modern financial innovations. While it’s easy to pick on stuff like “NINJA” loans (No Income, No Job, No Assets) and various mortgage-backed securities as examples of financial innovations that we’d have been better off without, I think it would be foolish to let these mistakes convince us that we’d be better off going back to the barter system.