According to a Financial Times column, in the fall of 2008, the Queen of England put the economics profession and global financial policy makers and regulators on the spot with a simple question. At the London School of Economics she asked, "if things were so large, how come everyone missed them?"
Regular readers know the answer lies in the failure to provide market participants with all the useful, relevant information in an appropriate, timely manner as required under the FDR Framework.
They also know that your humble blogger was among the handful that did not miss what was happening and said before the crisis began that the impact of the crisis could be moderated with disclosure.
Since the solvency crisis began in 2007, your humble blogger has said that we would remain in a downward economic spiral until such time as disclosure is addressed.
The solvency crisis has not ended, just ask the Europeans or look at the massive amounts of monetary and fiscal stimulus. Just as I predicted at the start of the crisis, the downward economic spiral immediately resumes in each country that adopts austerity (sigh!).
The following are a series of posts on the Queen's Question:
The Answer to the Queen's Question
BoE's Andy Haldane explains why economic profession failed
Why did economists fail to predict the crisis?
Economists' failure to forecast the Great Recession or the subsequent recovery
Transparency and the invisible hand
Paul Krugman defends the economics profession
Paul Krugman tries again to defend the economics profession
Simon Jenkins answers the Queen's Question