The "Black Monday" crash of 1987 was actually the turning point for the efficient market hypothesis. It basically launched the entire field of behavioral finance, as the market plummeted for essentially no reason.
EMH claims that marked prices always reflect reality, so the housing bubble of 2000-2007 (with house prices rising at twice the rate as rents) whose bursting caused the financial crisis ought to be impossible.
... except that we cannot bifurcate history into multiple different timelines and run parallel experiments to test different assumptions. This is why "experiments" in soft sciences like economics or psychology don't necessarily mean the same thing as experiments in a hard science like physics.
And also, interestingly, climate science, where they face a similar problem in having a single enormously complex system that they can't bifurcate and run experiments on. To be fair, even nutrition and digestion and neuroscience/psychology tend to be a pseudo-scientific shitshow, and we've 6 billion test subjects for those. Or even epidemiology, where we get endless statistical garbage about this or that factor leading to cancer. Cancer is a real physical process, triggered by real physical causes (carcinogens, genetics, etc.)... how about we put down the statistics textbook and focus on finding the empirical causes? But again we struggle to do that with 6 billion experimental test beds. So yeah, it is best to take anything like sociology/economics/planetary climate modelling with a big grain of salt, because the simple truth is that we're nowhere near achieving accurate modelling in subjects where we have six billion verification sets, let alone subjects where we have a handful (societies, economies) or one (Earth).
Most things are complex and it's quite usualy to not know exactly what will happen. What i don't like is the fact that they usually make their policies as if they understood the topic with absolute certainty. Economics is simply not hard science, and it's failing to admit it. And even if it was science, erring was a absolute normal part in process of science.
