The Best and the Brightest.

It seems to me that one of the causes of our current economic malaise lies in how we've deployed our very best talent.

Instead of getting into industries that innovate, create, or manufacture real stuff, they went to Wall St.

And what did they do there?

At first, M&A was the hot thing. They'd stick two companies together -- in many cases two companies that had no business being stuck together -- they'd fire middle and upper level managers (in many cases the very heart and soul of the companies) to bring expenses down and profits up so that they could become very wealthy.

The expense? Failed companies, a compromised middle class, and lots of money for the very few.

Lately, they've been into hedge funds and these mortgage backed security "things." To read about some of these deals is mind boggling. They'd take a mortgage backed security, pick off its most risky pieces, put them and others like them into a mutual fund, then another mutual fund would buy the riskier pieces of those funds. All mired in a foggy soup of derivatives, credit swaps and a bevy of indicipherable instruments.

Well, the best and the brightest finally outsmarted themselves.

In their quest to impress themselves with the brilliance of all their financial slight-of-hand, they've created nothing, absolutely nothing -- other than a financial crisis of epic proportion.

Back to my original point: when our country succeeded we were driven by real innovation -- not the contrived innovation of CMOs, derivatives, and credit swaps -- innovation, that created value, jobs, and productivity gains.

The industrial revolution was fueled by steel mills, automobile factories, and electric generating stations. The sixties were driven by housing starts, the NASA program, shopping malls and supermarkets. The nineties by Microsoft, Intel, Cisco, the dot.commers. Real products. Real value.

And, yes, for all those expansions, Wall St. was there -- serving its proper function: providing captial for the mills, factories, shopping malls, microchips factories and software companies. Whenever Wall St has tried to get fancy, it's failed miserably.

Perhaps the best and the brightest of the next generation should concentrate on creating real value rather than the illusory value of Wall St.