UPDATE 2/24 9:45am: since the post below was written, Stiglitz has seen vote swing his way. Cast your own vote early and often! Paul Volcker said after the crisis: "I wish that somebody would give me some shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy."
There is a longstanding historical tradition of suspicion and hostility towards finance. It goes all the way back to the medieval prohibition of "usury," if not further. Many have long accused financiers of useless "speculation" that enriches themselves at the expense of everybody else.
Didn't The Crisis reinforce all of these doubts ten-fold? Shouldn't developing countries be even MORE wary of those financial tricksters? (Volcker thinks the only useful finance innovation in our generation was the ATM).
And in a new online debate at the Economist, Joe Stiglitz backs up Volcker with all his Nobel-Prize-winning artillery.
On the other side against History and Hard Times and Heavyweights is one brave economist, Ross Levine, arguing that financial innovation is still GOOD. In fact, he says it's Indispensable to future Economic Growth both in rich and poor countries. And so far he's winning the argument! -- go to the web site and decide for yourselves -- and then cast YOUR vote.
(Full disclosure: Ross happens to be my friend and frequent co-author. But he would have gotten my vote anyway.)