That’s the title of my new column for Bridges, which you can find here, and here is an excerpt:

In our 2000 book on the role of geophysical predictions in decision making (Prediction, Science, Decision Making, and the Future of Nature, Island Press, 2000) we developed a set of guidelines indicating when to rely on predictions in decision making. The criteria are met when (1) predictive skill is known, (2) decision makers have experience in understanding and using the predictions, (3) the feedback loop between use of the prediction and evaluation of that use is relatively short (such that it can feed back into future decisions), (4) there are limited alternatives to relying on prediction, and (5) the outcomes of decisions based on predictions are highly constrained (in other words, the magnitude of the consequences of decision error is limited).

In the current financial crisis, it appears that each of these guidelines was violated . . .

Read it here, and as usual the entire issue is worth your time.