In his best-selling Irrational Exuberance, Robert Shiller cautioned
that society's obsession with the stock market was fueling the
volatility that has since made a roller coaster of the financial system.
Less noted was Shiller's admonition that our infatuation with the stock
market distracts us from more durable economic prospects. These lie in
the hidden potential of real assets, such as income from our livelihoods
and homes. But these ''ordinary riches, '' so fundamental to our
well-being, are increasingly exposed to the pervasive risks of a rapidly
changing global economy. This compelling and important new book presents
a fresh vision for hedging risk and securing our economic future.
Shiller describes six fundamental ideas for using modern information
technology and advanced financial theory to temper basic risks that have
been ignored by risk management institutions--risks to the value of our
jobs and our homes, to the vitality of our communities, and to the very
stability of national economies. Informed by a comprehensive risk
information database, this new financial order would include global
markets for trading risks and exploiting myriad new financial
opportunities, from inequality insurance to intergenerational social
security. Just as developments in insuring risks to life, health, and
catastrophe have given us a quality of life unimaginable a century ago,
so Shiller's plan for securing crucial assets promises to substantially
enrich our condition.
Once again providing an enormous service, Shiller gives us a powerful
means to convert our ordinary riches into a level of economic security,
equity, and growth never before seen. And once again, what Robert
Shiller says should be read and heeded by anyone with a stake in the
economy.
