Market designers claimed better auctions alone could have prevented the 2008 crisis

Evidence

The crisis was caused by mispricing: investment bankers were able to sell poor securities for full value based on misleading ratings. This mispricing was supported by the absence of a transparent secondary market for these mortgage-related securities. If we had transparent prices, a lot of the bad things that happened would not have happened. In particular the housing bubble would have been much less, and the investment bankers would not have been able to make such clever use of the rating agencies and create tens-of-thousands of senseless securities obfuscating prices. Even a tiny bit of good market design would have averted the financial crisis by preventing its root cause: the sale of subprime mortgages as near-riskless securities. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 870

Categorization

• ADDENDUM: Supports the crisis-as-narrative theme adjacent to the sacrifice piece: technocratic hero narratives that absolve specific institutions of blame.
• XREF: connects to: Market designers misrepresented the crisis to serve their own profit, worsening public confusion. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 849; Market designers framed the 2008 crisis as a liquidity problem, not an insolvency one. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 855; Market designers positioned themselves as correcting markets’ information-aggregation flaws for common-value assets. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 857 (+2 more)