Why economists failed in predicting the crisis??

This questions has been popular, after it has been coined by the Queen of England, when it has been posed at a conference at London school of economics. There have been a several explanation why the economists failed to spot the crisis.......one group argues the we simply don't have models, another argues that the economists blindly believed the free market and irrationally assumed that the market participants are rational........ there were also argument that attributed the reason to 'sponsored research'............most of the research is sponsored which is tend to be biased towards the sponsoring party (mostly financial market participants)....................Prof. Rajan in his official blog Fault Lines argues that since most of the research is carried out through sponsorship from the industry................and realistically there expected to be reasonable amount of bias...............there should be disclosure about the 'sponsorship'............ so that the market interprets accordingly and take into account the potential bias in the findings...........................Possibly such known information about the bias  before the research, the researcher (economist) tend to be more accurate and ......it essentially eliminates any such bias!!

Find the Prof. Rajan's take on the issue on his blog! [Link]