In today’s New York Times, the Nobel laureate and recent White House guest begs the question: Why didn’t somebody say something to warn the world of the financial crisis to come? Answer: Life is junior high.
… [N]obody likes a party pooper. While the housing bubble was still inflating, lenders were making lots of money issuing mortgages to anyone who walked in the door; investment banks were making even more money repackaging those mortgages into shiny new securities; and money managers who booked big paper profits by buying those securities with borrowed funds looked like geniuses, and were paid accordingly. Who wanted to hear from dismal economists warning that the whole thing was, in effect, a giant Ponzi scheme?