Leave it to the Queen to ask the obvious question:
The latest Occam’s razor award goes to Her Majesty the Queen. In the unlikely surroundings of the London School of Economics, she last week cut to the quick. Describing the credit crunch as “awful”, she tapped a gilded economist on the proverbial shoulder and asked: “Why did nobody notice?”
Aha, ahem, said the director of research, Professor Luis Garicano. He had clearly been briefed to chat about the weather, corgis and perhaps the Grand National. He had certainly not expected an upper cut to the jaw. Monarchs are not supposed to ask leading questions, even when the nation is screaming for an answer.
With his vocation suddenly on trial, the professor stammered, “Someone was relying on somebody else,” adding, as if in moral afterthought, “and everyone thought they were doing the right thing.” It was the authentic cry of the blame-shedder down the ages. It wasn’t us, ma’m, we were only obeying orders and collecting salaries.
UPDATE: In today’s Guardian, Professor Garicano rejects the suggestion that he was blind-sided, and insists that he was glad of the opportunity to discuss the crisis with HRH. Unfortunately he only succeeds in confirming our impression that, whatever they may have believed or feared, most academic economists simply failed to speak out. Note the way in which he tries to hide his apology by juxtaposition with an even more heinous bunch of absentees:
But we economists and academics should have been louder in our warnings and more proactive in suggesting solutions. Particularly problematic and subject to a serious rethink are the short-term and one-sided incentives prevalent in the financial industry – and the failure by those who took the risks to bear the risks. The public is right to be outraged.
Hmmph!