FU Asks: Why Did Economists Drop the Ball on the Housing Bubble?

Welcome to an ongoing feature on the Floating University blog, FU Asks, where we open up the academic debate on our e-learning platform to the Big Think community. 


This week we're featuring a discussion prompt from Saul Levmore, William B. Graham Distinguished Professor of Law, University of Chicago:

Many economists claimed in the aftermath of the housing bubble collapse in 2008 that they did not foresee the economic downturn for a variety of reasons, perhaps because economists only make accurate predictions about the long-term economy inasmuch as meteorologists make accurate predictions about the long-term weather. Do you agree with this defense, or do you think the majority of economists failed catastrophically? How should they have predicted the housing bubble, and what actions could/should they have taken to prevent it from occurring? 

Here's Levmore offering a qualified defense of professional economists, from his Floating University lecture on economics:

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