A traditional approach to the principal-agent problems of the financial meltdown might be: If we give depositors lots of information, they’ll move their deposits to the strongest bank and then banks will have the incentive to be strong, and then everyone will have to spend lots of time doing due diligence on banks.

That’s insane, basically, and that’s not the approach we should adopt now. I say, “Let’s create a system of oversight that doesn’t put investors in a position where they have to worry about this.”

Once the electricity grid fails and you have a blackout, the answer is not that we want everybody to become an electrician. We don’t want to post complicated diagrams of electrical circuitry on the Web for everyone to study. The answer is re-create a world where nobody needs to know about electricity.

Gary Gorton, as interviewed by The Region in Dec ‘10

(this is not an exact quote.)

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