At least part of the Troika get it: The IMF's preemptive smokescreen for covering up another foretold program failure (by Yanis Varoufakis). The question is why policy has such inertia that civil servants can continue pushing it forward when they can see it doesn't work. Something ARGeezer addresses upthread but doesn't really answer.

What is it, the fact that people in positions of responsibility prefer to ruin the institutions they are running than lose face by admitting a mistake and changing course?

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman