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So I keep reading and hearing stories (Planet Money, I’m looking at you here) involving people trying to figure out whether “financial innovation” is a good thing or a bad thing.

On the one hand, you’ve got a bunch of people looking at the last two years’ worth of economic wreckage and pointing their fingers directly at the financial sector. Specifically,these critics are pointing at all the fancy-pants “instruments” that seem to have been developed solely to allow companies to hide massive quantities of bad investments from their investors and customers.

On the other hand, there’s the argument that without financial innovation, the vast majority of the economic growth that has occurred in the last two hundred years would not have been possible. According to this point of view, any government regulation that hinders the ability of the financial sector to innovate will keep the economy from expanding.

While I’m not an economist, neither of these arguments makes much sense to me.

It doesn’t seem like financial innovation is either good or bad. The outcomes of financial innovation can be good or bad&dmash;the financial products and instruments that innovation produces can either help or harm the economy. The more productive discussion would be about how these instruments can be regulated so as not to be misused, not whether the process that produces them is good or bad.

Then again, I’m no expert, so maybe I’m completely out of my league here.