Official crisis reports posited contradictory causes rather than settled explanations

Evidence

What one would derive from reading the document was the concurrent posit of A and not-A as causes of the crisis. The six-person endorsed body of the report pinned the crisis on “failure to effectively rein in excesses in the mortgage and financial markets,” which then got parsed as a laundry list of usual suspects: credit-rating agencies, failures of regulators, OTC derivatives, crappy mortgages repackaged as sweets, Greenspan, executive compensation, Bernanke, shadow banking, etc. However, the majority went out of their way to reject one cause: “we examined the role of the GSEs … We conclude these two entities contributed to the crisis, but were not a primary cause … The GSEs participated in the expansion of subprime and other risky mortgages, but they followed rather than led Wall Street.” In other words, it went out of the way to insist everything contained in the Wallison appendix was false. The other minority appendix endorsed the Wallison line in passing, but seemed more concerned to absolve Wall Street of any culpability, proclaiming, “derivatives did not in any meaningful way cause or contribute to the crisis,” and denying that “shadow banking” was even a coherent concept. Consequently, it was exceedingly vague about what did cause the crisis, although it did coquette with the notion that it was all China’s fault. The first Republican dissent did not even bother with much in the way of evidence. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 891

Categorization

• DEEPTHINKING: The FCIC report did not fail as an explanation at all — it succeeded as a performance in which mutually exclusive causal narratives (A and not-A) coexist in one authoritative document, which may be exactly what a thought collective wants: no single cause that could justify decisive action.
• XREF: Pairs with Mirowski’s broader claim about ‘the impossibility of learning from the crisis’ — the FCIC embodies structurally induced non-learning. — connects to: Leading orthodox economists could not agree on the crisis’s actual causes — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 809; Austerity was installed by deliberately confusing cause and correlation — Mark Blyth, Austerity: The History of a Dangerous…, 204; Crisis scapegoating of out-groups masks the true political and economic causes (+2 more)

Broader Connections

• Leading orthodox economists could not agree on the crisis’s actual causes #exemplifies (0.95) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 809
• The 2008 crisis was nonlinear and multicausal, leaving it overexplained and overdetermined #expands (0.85) — Mark Blyth, Austerity, 74
• Austerity was installed by deliberately confusing cause and correlation #expands (0.80) — Mark Blyth, Austerity, 204
• Crisis scapegoating of out-groups masks the true political and economic causes #expands (0.75)