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The vision thing By Chris Giles November 25, 2008 8:24 pm 1It has been a bad year for economic forecasters. So bad that royalty wants to know what went wrong. “Why did no one see it coming?” Britain’s Queen Elizabeth asked during a visit to the London School of Economics this month. 2Her Majesty’s question has sparked a series of ludicrous claims about the prescience of individual forecasters. 3 “Although bankers with their fancy MBAs appear to have been dumbfounded by the financial crisis, regular attendees to Gresham College’s free public lectures in central London, were not,” maintained one press release this month, citing a talk given in November 2002 by Avinash Persaud. But the lecture is as disappointing as the claims are inflated. “Despite record corporate bankruptcies, weak economies and a market meltdown, banks are generally safe” was Prof Persaud’s conclusion. 4Giulio Tremonti, Italy’s finance minister, raised the predictive bar last week when he said Pope Benedict XVI was the first to foresee the crisis. A 1985 paper showed, according to Mr Tremonti, “the prediction that an undisciplined economy would collapse by its own rules”. 5Much closer to the truth was the more mundane assessment by Charlie Bean, the Bank of England’s deputy governor, who noted that elements of the global economy had troubled lots of economists and policymakers for a long time. “We knew they were unsustainable and worried that the unwinding might be disorderly, though I don’t think anyone could have guessed the course that events would actually take,” he said. ? Avinash Persaud Prescient, but claims too much 6There is no doubt that the credit crisis, which has morphed into recession across advanced economies, leaves most economic forecasters with ample egg on their studious faces. But policymakers, too, have reasons to cringe. 7In his Senate nomination hearing of 2005, Ben Bernanke, the Federal Reserve chairman, said the US financial system had already benefited from a series of