We are a bit bemused
A new name to add to the list of those who want to know what caused the crisis: Queen Elizabeth II. During a visit to the London School of Economics, the British monarch asked economists why they didn’t do a better job of predicting the timing and scale of the slowdown, The Observer reports. “She seemed very interested, and she asked me: ‘How come nobody could foresee it?,” Professor Luis Garicano of the LSE told the newspaper.
Stirred by the Queen’s query, some of Britain’s leading economic experts wrote to her to explain what they think went wrong. “Everyone seemed to be doing their own job properly on its own merit. And according to standard measures of success, they were often doing it well,” they told her. “The failure was to see how collectively this added up to a series of interconnected imbalances over which no single authority had jurisdiction.” While the crisis had many causes, they concluded, “[it] was principally a failure of the collective imagination of many bright people, both in this country and internationally, to understand the risks to the system as a whole.”