Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof and Robert J. Shiller
The economy is driven increasingly by getting people to do things that are not necessarily in their best interest. Marketers encourage people to buy things. Politicians get people to vote for them. A temptation of a quick fix or an ideal solution can encourage somebody to make the plunge. It may provide some benefit, but it is often far from an equally balanced transaction.
Regulators are involved in the game to prevent excessive dishonesty. However, for each regulation there is a loophole. An argument can be made with granule of truth. Perhaps a single anecdote is put forth that is honest, but doesn't come close to representing the whole case. The regulated are often heavily involved in writing the regulations. They are the experts. It also benefits them to have strict rules, especially if these rules make it difficult for others to enter.
There are plenty of examples of "pholish" behavior. In the financial world, consumers are suckered into paying outsize fees for everything from houses to credit cards. Drugs are a big mess with complicated studies and side effects that are difficult for the experts, let alone lay-people to understand. Tobacco companies were able to sow the seed of doubt for many years, delaying tight regulation. Even the loss of a big lawsuit helped excuse them from further liability. Some traders became extremely profitable trading junk bonds, using a kernel of truth from a previous study.
The book provides many concise example of "phoolish" behavior, where people do things outside of their best interest. This is a supplement to the utility-maximization theory of economics which helps explain the unexplainable.
The "Animal Spirits" in mankind cause things to happen differently than if they were behaving purely rationally. The authors advocate for a neo-Keynesian approach to the economy with more emphasis on government intervention. This was written around the time of the great recession of 2009, so this seemed to make sense. The book also gives examples of the problems with focussing too much on one mandate (such as keeping inflation under control) at the expense of growing the economy. Alas, today we have seen that forgetting about inflation can have a deleterious effect. The low interest rates and government programs have contributed to excessive inflation, while companies are having trouble filling jobs. The solution to the last problem is not the solution to the current one.