I read a fascinating article in Time magazine last night about how President Obama is incoporating behavioral economics into his policies. You can access the article here.
I had a couple of thoughts after reading the article. First was I wished that I had heard of behavioral economics when I was studying economics in college. I always thought that the field skewed towards the conservative. An example is how supply and demand analysis always leas to the answer that minimum wage laws should never be enacted. However, with behavioral economics, rationality does not always rule, since people do not always behave rationally. The prime example given in the article is a study that showed a huge difference in participation in 401(K) plans when people have to actively sign up for it vs. if they are automatically enrolled and have to actively opt out. Inertia rules in this instance.
Obama has a team of experts in this area who are helping shape his policies to actually try to change our behaviors. Some may think of this as "Big Brother" or too paternalistic, but if it is influencing us in the right direction to help solve huge problems like climate change and enormous health care costs, I say go for it.
So, my second thought was that "Change" was not just a campaign slogan. President Obama's plans are way more complex and deep than I imagined. He is really shooting for long term, far-reaching change to improve this country and the world, and I am behind him all the way.
And I will be ordering "Nudge" and "Animal Spirits" soon.