Finance is a utility - not a profit center

I agree with this post from Market Ticker:

http://market-ticker.denninger.net/archives/765-What-Went-Wrong-Corporate-and-Educational.html

........

If I build a jet engine I have a jet engine. It can propel an airplane, and that has value. But when I take that jet engine and turn it into a discounted cash flow and then slice and dice it into tranches and sell it off into the marketplace via my "financial wizards" I am consigned to get less in total than if I just sold the engine outright.

Why? Because nobody works for free, that's why, and the only way I can pretend to get more value this way than via direct sale is when I cheat. That is, when I invent a model that has too-rosy assumptions, either because I have stars in my eyes - or fraud in my heart.

We as Americans must look at the future differently and discard the ways of the past. We must eschew the institutions who refuse to take responsibility for turning out MBAs by the boatload and consign both their graduates and the institutions themselves to the dustbin of history.

These people and these institutions have not advanced our common wealth and weal - they have destroyed it.

Finance is a utility function and we as Americans had better recognize that as the fact that it is. We need financing of some sort; throughout history there has been a means of financing production over short periods of time.

But financial engineering is not and never can be a profit center. It is a profit drain in that for each hand a deal passes through more value is extracted - not added.

All claims to the contrary are fraudulent on their face and must result in criminal penalties and civil disgorgement of every nickel allegedly "earned".

We would not be here were it not for the "financial engineering" that has been fraudulently sold off to the world as a means of "creating value." If we are to return to financial and economic stability instead of a world where "bubble-blowing" is the meme of the day we must eject both the progeny of these "higher education" institutions as well as the institutions themselves who refuse to accept their share of responsibility for the mess they have both fomented and profited from.