Kahneman's book may have a lot of dubious science for specific points. However, you need to remember that he was attacking the Economic Man model that has been standard in economic science for over a century. This model holds our economic decisions are all rational, or at least if biased, the biases are random across different people and so cancel out. That means we should always trust the unregulated market to produce ideal results, and so the government should always stay out of it, as it could only make things worse.
Various economists such as Robert Schiller and his writings on "animal spirits" have argued that this is not at all the case. Kaheneman and the other behavioral economists have added a lot of empirical support, and, with some luck, economic science will shift to better fit reality.
Various economists such as Robert Schiller and his writings on "animal spirits" have argued that this is not at all the case. Kaheneman and the other behavioral economists have added a lot of empirical support, and, with some luck, economic science will shift to better fit reality.