Why the Economists Didn't See It Coming: Three Articles to Answer the Queen's Question

This is grant application deadline time, so I’m running around madly. Therefore the post today comes courtesy of my favourite economist who strongly recommends two recent articles in The New York Times. The first is a long piece by Paul Krugman entitled “How Did Economists Get It So Wrong.” In it the Nobel prize winner writes about the bad turn the profession took a couple of decades ago in going gung-ho for the Chicago School. Lee qualifies the article as “predictable” but then he’s been studying the stuff all his life. For me, it was simply eye-opening.

The other article is by Simon Johnson and was published a week ago. Entitled “Finance Gone Wild,” it begins a little like one of those economics lectures you had trouble staying awake in. But persevere because there’s valuable ammunition in it.

They're companion documents to a three page missive sent by British economists to Queen Elilzabeth after she asked why no one saw the crisis coming. Like Krugman and Johnson they blame "a failure of the collective imagination of many bright people."

Is this a case of a Monarch wanting to know why so few saw the problems with the Emperor's new clothes?