Who Could Have Known?

Economists, pundits, CEOs and financiers who should have recognized and helped prevent the economic bubble (which we're now trying to clean up) "missed" it because, as Shiller and Thaler would note, they were caught in the psychological fervor of the time. We were in a New Economy, mathematicians had solved risk, and there were gobs of money waiting for the taking. It was the prevailing notion of the day.

Deep down inside, they knew better. But why not milk the system and deal with the consequences later...and then claim, "Who could have known?" [Wink]