Animal Spirits by George A. Akerlof and Robert J. Shiller

General Description (from
The global financial crisis has made it painfully clear that powerful psychological forces are imperiling the wealth of nations today. From blind faith in ever-rising housing prices to plummeting confidence in capital markets, “animal spirits” are driving financial events worldwide. In this book, acclaimed economists George Akerlof and Robert Shiller challenge the economic wisdom that got us into this mess, and put forward a bold new vision that will transform economics and restore prosperity. Akerlof and Shiller reassert the necessity of an active government role in economic policymaking by recovering the idea of animal spirits, a term John Maynard Keynes used to describe the gloom and despondence that led to the Great Depression and the changing psychology that accompanied recovery. Like Keynes, Akerlof and Shiller know that managing these animal spirits requires the steady hand of government–simply allowing markets to work won’t do it. In rebuilding the case for a more robust, behaviorally informed Keynesianism, they detail the most pervasive effects of animal spirits in contemporary economic life–such as confidence, fear, bad faith, corruption, a concern for fairness, and the stories we tell ourselves about our economic fortunes–and show how Reaganomics, Thatcherism, and the rational expectations revolution failed to account for them. Animal Spirits offers a road map for reversing the financial misfortunes besetting us today. Read it and learn how leaders can channel animal spirits–the powerful forces of human psychology that are afoot in the world economy today. In a new preface, they describe why our economic troubles may linger for some time–unless we are prepared to take further, decisive action.

Why the President Should Read This Book…Maybe
This book is lame. In fact, I just decided I’m not going to finish it. There are too many good books out there that I will never get around to reading to waste more of my time on this one. There are only two reasons, perhaps, for reading this book. The first is that it shows how even very well educated, intelligent people can also be fools at the same time, and the second is that perhaps it gives some insight into the minds of those who are against free markets. This book is filled with straw men, evil capitalists, a section on “fairness”, and yet seems to ignore for the most part the role of government regulation in causing many, if not all, the financial disasters in our country since the Federal Reserve was established in 1913. While it’s a given that businessmen are terrible people, it’s also a given that government officials have not a corrupt bone in their bodies.

Don’t bother reading this book, unless you find yourself asking “How in the world can people believe all this trash about free markets?” This book might help you understand where they’re coming from. And don’t worry, it won’t do a thing to convince you they’re correct.