Shiller!!!

Robert Shiller, that is.

Perhaps it is a good idea for our policymakers to consult some of the smart people who anticipated the financial crisis before it became apparent to Secretary Paulson and Fed chief Bernanke. Robert Shiller deserves a seat at any table where this discussion is taking place. In his view, the housing bubble and the associated risks to the entire system were easy to see by looking at the unprecedented run up in housing prices. His most recent book serves as a primer for understanding what has happened and what we need to do now.

He recommends the creation of new institutions that are better able manage risks and he specifies a whole host of ways that it could be done. The book is called The Subprime Solution: How Today’s Global Crisis Happened, and What to do About it. Even though I made an earlier plea to stop blaming the subprime market for the crisis since the dynamics of the hosuing bubble had many other contributing factors, I’ll forgive Shiller. He probably had a publicist force this title on him to capitalize on a news buzz that has now been overtaken by events.

Despite the title, I predict the book will soon be a bestseller. At least it should be.