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In the spring of 2000, I began a three-year stint on Citigroup's corporate-derivatives team. I was just months past my twentieth birthday, with no work experience to speak of, in a world beyond my imagination. As my boss summed me up after a day of interviews, I was "fucking unpolished." The credit-derivatives group, then just three or four people I sat next to, soon spawned an ever-expanding team managing ever-more complex creations: credit-default swaps, collateralized debt obligations, and the myriad other structures built with black boxes and shrouded by acronyms. Meanwhile, my group continued to peddle mostly the forbears of these recent menaces, the more mundane interest-rate swaps and Treasury-rate locks. The newer derivatives, though hardly identical to their predecessors, nonetheless evolved in similar environments, were likewise designed to manipulate risk, and were also customized on a trade-by-trade basis. Our clients were non-financial corporations, the Deltas and Verizons of the world, which relied on us for advice and education. Our directive was "to help companies decrease and manage their risks." Often we did just that. And often we advised clients to execute trades solely because they presented opportunities for us to profit. In either case, whenever possible we used our superior knowledge to manipulate the pricing of the trade in our favor.

If you were a spectator in a sky box seat looking directly down on the Washington debt debate, you'd be seeing a contest both narrow and off to one edge of the field -- like watching a football game being played entirely between the 10-yard line and the goal line.

There are two kinds of people at present: those who know in a vague way that the 1930s was a bad time, and those who have studied the detail and understand the economics of why it went bad.