The pain of a crisis is in having to deal with it in the first place. What you are proposing is to deal with a crisis before it occurs, in order to prepare ourselves better for it. This means incurring the pain upfront even though there is a low probability that the crisis will ever occur. Now multiply this by the number of different crises—New Orleans, after all, is different from Bear Sterns—and we might spend all of our spare time preparing for low-likelihood catastrophes.
Perhaps you’ll argue that not everyone needs to prepare, only a few people need to do it on everyone’s behalf, but I don’t think that’s true. Preparedness has to be pervasive, or else we’re not prepared.
The pain of a crisis is in having to deal with it in the first place. What you are proposing is to deal with a crisis before it occurs, in order to prepare ourselves better for it. This means incurring the pain upfront even though there is a low probability that the crisis will ever occur. Now multiply this by the number of different crises—New Orleans, after all, is different from Bear Sterns—and we might spend all of our spare time preparing for low-likelihood catastrophes.
Perhaps you’ll argue that not everyone needs to prepare, only a few people need to do it on everyone’s behalf, but I don’t think that’s true. Preparedness has to be pervasive, or else we’re not prepared.