Maybe someone who knows more than me about this can tell me: why, on panels of industry experts deconstructing the crisis, do we constantly hear the assertion that nobody saw this coming? And what really confuses me, is why do the experts participating in such panels/media interviews/round tables not challenge that assertion?
The people who saw it coming are not saying no one saw it coming. Ron Paul and those who study the Austrian School saw it and acknowledge it. http://en.wikipedia.org/wiki/Austrian_School
I think some of the people saying no one saw it coming are the engineers of this crisis. No one wants to admit they saw it coming and continued to build it -- especially if they benefited from the crisis. It's been argued that the banks created this mess intentionally because they need a large enough catastrophe to be bailed out by the tax payers.
If you acknowledge that you saw it coming, then the next question is, "Why didn't you do something or say something?" When faced with that question, people appear in a very negative light.
And if no one saw it coming, then you can't be held responsible. It's a freak of nature. An act of God. Uncontrollable.
What if I said, "I saw it coming?"
Would you believe me? What's my evidence? How can I prove I saw it coming? If I saw it coming why didn't I say or do something about it?
It's easier to go with the herd and say not only did I not see it, but no one saw it. To have seen it coming and kept going causes cognitive dissonance and it hurts. Avoid it with ignorance.
"What did you do about it?" is really the kicker. The foresight to say something bad is coming without being able to predict when doesn't impress many people.
Anyone with a level head knew there was a housing bubble. But if you're working as an investor, you don't get paid to sit back and watch your rivals get rich while you're waiting for the pop.
Competency has a tendency to hide in random distributions. The people who were wrong can assert that there is always some portion of people somewhere claiming that something bad is about to happen and that this group -- with people like "Dr. Doom" -- just got lucky.
Interestingly, the same group of people usually are the ones crying "but facts are facts" when objecting to pure rhetoric (what other people call a plausible alternative hypothesis that is not easily tested by statistical inference).
