Table of Contents
Introduction 3
Part 1 Utopian Economics
1 Warnings Ignored and the Conventional Wisdom 17
2 Adam Smith's Invisible Hand 25
3 Friedrich Hayek's Telecommunications System 37
4 The Perfect Markets of Lausanne 49
5 The Mathematics of Bliss 61
6 The Evangelist 72
7 The Coin-Tossing View of Finance 85
8 The Triumph of Utopian Economics 97
Part 2 Reality-Based Economics
9 The Prof and the Polar Bears 111
10 A Taxonomy of Failure 125
11 The Prisoner's Dilemma and Rational Irrationality 139
12 Hidden Information and the Market for Lemons 151
13 Keynes's Beauty Contest 166
14 The Rational Herd 177
15 Psychology Returns to Economics 192
16 Hyman Minsky and Ponzi Finance 205
Part 3 The Great Crunch
17 Greenspan Shrugs 221
18 The Lure of Real Estate 235
19 The Subprime Chain 251
20 In the Alphabet Soup 268
21 A Matter of Incentives 285
22 London Bridge Is Falling Down 299
23 Socialism in Our Time 317
Conclusion 335
Afterword: The Great Disconnect 347
Notes 363
Acknowledgments 389
Index 391