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Ryan Avent notes that Ben Bernanke's rousing defense of financial innovation seems peculiarly retro. Bernanke concludes by saying that "I don't think anyone wants to go back to the 1970s," but as Avent notes, his examples of worthwhile innovation mostly date back to bell bottoms and the Electric Light Orchestra. "Credit cards, for one, which date from the 1950s. Policies facilitating the flow of credit to lower income borrowers was another, for which he credited the Community Reinvestment Act of 1977. And, of course, securitization and the secondary mortgage markets developed by Fannie Mae and Freddie Mac in...the 1970s." To be fair, Bernanke does point to one more modern innovation: The subprime market. But for understandable reasons, he doesn't spend much time on it. Much of Bernanke's focus is on the spiraling complexity of innovations. Credit cards, for instance, originally "allowed the user to make purchases or obtain cash advances, with a single, unchanging annual percentage rate." Now, they "offer balance transfers and treat different classes of purchases and cash advances as different features, each with its own APR. In addition, interest rates adjust much more frequently than they once did, and the array of fees charged for various features, requirements, or services has grown." He implies that this is a downside of continued innovation. Which is half true.Innovations are not always win-win. They're often win-lose. Bernanke doesn't say this -- at least not directly -- but complexity is increasingly proving a financial innovation on its own. The point isn't the innovation but the innovation's opacity. The Government Accounting Office famously found that credit card disclosure forms were written at a "twenty-seventh grade" level. That sounds funny. You could imagine the SNL skit where debtors retake the twenty-seventh grade. But the GAO does not tell jokes. And the credit card companies don't make them.If a consumer is less able to understand a financial product, then the issuer is more able to control the terms of the interaction. Information is, of course, a common competitive advantage in competition between firms. People are less comfortable admitting that it's a common competitive advantage in relationships between firms and customers. But that's undoubtedly how variable rate mortgages and trailing interest work. These innovations are most profitable when they're least understood. In reply to this, Bernanke says that "the first line of defense undoubtedly is a well-informed consumer." But the consumer will never be as informed as the bank. And the banks knows it. That simple insight has been responsible for a lot of innovation in recent years. Related: Financial Innovation for Beginners.