The Emperor's New Clothes!

An emperor who hires two swindlers to create a new suit of clothes for him. During a procession, a small child cries out "But he has nothing on!" and everybody then sees him so.
(by Hans Christian Andersen, first published 1837.)
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Andersen never clarified if the crowd, the King's subjects, laughed or cried seeing their King naked.

As subjects of a fool King and- possibly-future citizens (at the time, the democratic ideas were spreading fast) they were justified to laugh only if they had called their King's nakedness on their own!

But they didn't, instead a small child did!

So what did they do?

Did they perhaps cry at their own foolishness or did they hurry to cover up their King with anything they could put their hands on?