Wretchard,

Both Taleb and de Soto are correct, but not just about the markets. The single biggest protected system of all is the American electoral process itself. The Democratic-Republican oligopoly, in an effort to protect their own jobs and cash flows to supporters, have destroyed the feedback loop of political information processing.  Look at the crazy amount of work Leo Linbeck has to do to challenge the status quo. Look at how hard it has been for the Tea Party to influence even a few elections. 

Part of the problem is in the Constitution itself. Our electoral system of “one-man-one-vote, plurality wins” guarantees a two-party system because of the spoiler effect. Range voting systems or approval voting systems would allow real challenges at the general election in each and every cycle, without the risk of “wasting your vote”. See “Gaming the Vote” by William Poundstone for more on that. 

The other part of the problem is statutory, in the many laws that effectively make it damn near impossible to get challengers on the ballot or fund their campaigns. This is more easily solved. 

But to expound on your thesis, the “Biggest Fail” currently unfolding is liberal government itself, or “the blue model” as Walter Russel Mead calls it. It is failing in Europe before our eyes, and it is failing in California, Illinois and Rhode Island too. But we are still “waiting for it”. Why? Why is the Federal debt 100% of GDP and we STILL don’t have a budget that cuts spending? Well, see above. The American people have known for a long while now that we are heading for a cliff, but the signal can’t seem to penetrate to Washington. 

The electoral process itself is the chief barrier to information. Everything else, from ObamaCare to bailouts flows from that initial problem.