On January 28, 1986 the space shuttle Challenger took off from Kennedy Space Center, in unusually cold temperatures. Morton Thiokol had built the boosters out of four segments each. Field joints containing rubber O-rings seals connected the segments. That morning, the cold rubber of the joints, operating in temperatures far lower than ever tested, became stiff.
A jet of exhaust came through one of the cold-stiff seals and played on an external tank containing oxygen and hydrogen, until the tank exploded. At 73 seconds after liftoff, Challenger came apart. I'd like to say "killing all aboard", but it seems that the crew survived, as the crew compartment continued to climb before free falling into the ocean, finally killing everyone aboard.
This was the result of "normal deviance": things seemed fine on every other day, so poor practices continued, shrinking safety margins. Because safety margins are a pain in the ass.
Increasing bank capital requirements can lower the risk of catastrophic 2008-type failures and bailouts, as Neel Kashkari, president of the Minneapolis Fed has proposed, but at the cost of higher interest rates and lower growth (the most recent episode of the Planet Money podcast has that story). Repairing infrastructure before it actually falls down costs money taxpayers always bitch about. Computer security slows things down, and makes interactions more difficult. Security precautions are always annoying, and no one can tell which ones are effective. Earthquake-proofing buildings in tectonically active areas is expensive, time-consuming, and can affect how buildings look.
If nothing bad happens for awhile (and that "awhile" doesn't have to be very long) people start cutting corners. They get irritated at inspectors, security drills, perfectly good money spent for no visibly good reason. They get to think that you should only worry about problems that happen visibly and regularly. Even trained engineers and technicians, like those that day at KSC can fall prey to it. It's not obvious. And, until something goes really wrong, the problem is invisible, because failure is sudden and dramatic, rather than slow and visible.
Our economic and political system seems robust, flexible, and responsive. And I'm sure it is. Still, both democracy and capitalism are essentially unnatural. Both insist on valuing strangers as much as personal contacts, tell you that costs in the short term lead to benefits in the long term, and are complex and opaque. Maintenance and upgrades have to be continuous, and that work can be quite tiresome and unrewarding.
We have elected a Morton Thiokol O-ring as President. Assume nothing, and keep your eye on the thermometer.