In my late teens I got a job in a video store in Hamden, Connecticut and worked there on and off for five years, standing behind a computer and renting movies. It happened to be the only good video store in the region, so we had a lot of customers make the 4 mile drive (yep, drive, the other options were and still are atrocious) up from New Haven, including a constant parade of academic celebrities.
One of them was Robert Shiller, an economist at Yale whose book, Irrational Exuberance (that’s an affiliate link), had just come out. The book upended the idea that markets are rational and predicted the stock market bubble and its eventual bursting. As is the fate of predictions in books, plenty of people believed him but nobody did anything about it until a few years later when it was too late. I read parts of the book mostly because I recognized his name, and was fascinated by the idea that economics wasn’t just about supply and demand and values and units, but that it was driven by human psychology and behavior—factors that aren’t always rational and rarely adhere to mathematical standards.
I didn’t think about it much until, shortly after the stock market crash, I took an economics class in college and found most of the principles to be mind-bogglingly incomplete as explanations for reality. Where was the humanity? I remembered Shiller and his idea of irrational exuberance and how this wasn’t widely accepted by his fellow economists.
I eventually ended up following a wild hare one afternoon that eventually led to spending much of my time writing about economics. But it wasn’t until this morning, when I learned that the Nobel prize in economics went to Shiller and two others, that I remembered this early influence—and looked back and discovered that he had also predicted the housing bubble way back in 2005, before anyone else had.
Bikenomics is very much about the housing bubble, and the sprawling developments that fed it. Whenever I write the word “transportation,” a little voice in the back of my head chimes in “and housing! and land use!” It’s also very much founded on the idea that economics is what we make it, that our system is created far more by our irrational whims and cultural tides as it is by someone sitting in a high tower in DC adjusting interest rates.
I don’t make a lot of predictions in Bikenomics. Looking back, I suppose I could have (and maybe will, in this space). But the book isn’t trying to be a wake-up call to politicians or economists or bankers. It’s intended as a dose of reality and potential for people like me and you. I don’t need to predict a crisis because the crisis is already upon us—it’s now up to us to rally together and find constructive ways through it, and that’s what the book is about.
It’s too late to say so in the acknowledgments, but hey, Robert Shiller, if you go in for googling yourself, congrats on the Nobel and also thanks for renting those videos and inspiring a nerdy and fun career path.
And hey, everyone else — how about backing this book on Kickstarter so I can take it out east on tour (including a stop in New Haven of course). Note: The Kickstarter project has been fully funded. You can now order the book directly.