The tsunami of cheap credit that rolled across the planet between 2002 and 2008 was more than a financial phenomenon: it was temptation, offering entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Icelanders wanted to stop fishing and become investment bankers. The Greeks wanted to turn their country into a piñata stuffed with cash and allow as many citizens as possible to take a whack at it. The Germans wanted to be even more German and the Irish wanted to stop being Irish. Michael Lewis's investigation of bubbles beyond our shores is so brilliantly, sadly hilarious that it leads the American reader to a complacency-until he turns a merciless eye on California and Washington, D.C.
It's truly a Looney Tunes world.
Good read, btw.
This books is actually better than The Big Short in that Lewis attempts an overview of each country. The straits of Greece, Iceland and Ireland are so different, tho it defies rationality why there weren't whistle-blowers, journalists, investors and the IMF screaming the these economies could only go off the cliff. I now keep coming across pundits and comment slugs explaining the Greek crisis. But they only cite one thing at a time when what makes Greece's problems so intractable. But it's just so many things, in fact: the massive amounts of nat'l budget expenditures kept off the books, the national pastime of avoiding personal and corporate taxes, the generous benefits to hairdressers, railway workers, teachers, etc. retiring at 55. Not to mention all the govt workers employed in phantom jobs. Hard for me to understand why Germans (and the French) weren't better informed about the way Greeks do business.
I found the rationale for Germany's own financial mess the least convincing: It bought stupid sub-prime bonds from Lehman Bros et al and lent so many billions to the Greek govt because Germans are so trusting and naive and believe numbers will keep them safe? Germany ain't Iceland and Germans have been doing international investment and trade for a very long time. They must know how to judge a govt solvency and corruption ration. OTOH, a great chunk of the reckless lending to Asian banks up to 1997 was by German banks. Lewis doesn't seem to be aware of this at all.
I have long heard that a lot of municipal bonds all over the US might go bad but Lewis doesn't really show that the reasons for the underfunding of California's cities and towns are the same as in the rest of the country. I mean, Californians certainly are capable of raising and paying taxes. They are wealthy enough. They just aren't willing to. But it does remind of a theme in a recent New York interview of retiring rep Barney Frank. As Franks says, Americans want govt to provide all these services (so they are more politically liberal than most realize) but they don't want to pay taxes to pay for them. Which is how you end up with deficits, deficits that mount up over time.
The subtitle says it all: Travels in the New Third World. Michael Lewis provides context for the international economic crisis by visiting and profiling four regions that were semi-willingly victimized by it. Three of the regions are obvious in retrospect--Iceland, Ireland, and Greece.
He also visits and profiles a region that finds itself at the epicenter of the world economy: Germany. Germany finds itself in the unenviable position of being the most likely source of funds to bail out the failing economies of other European countries.
But it wasn't until the final chapter that I grew really uneasy. The fourth region that's on its way to joining the Third World is California. While his comments on former governor Arnold Schwarzenegger are laudatory (the guy did his legitimate best to govern an essentially ungovernable state and actually had some limited successes), the overall prospects of The Golden State are pretty bleak. The book closes with a visit to the bankrupt city of Vallejo, CA.
But Boomerang gripped me, and made me laugh several times - mind you, it did help that it is a short book, anything longer I might have given a miss. Michael Lewis has a very direct manner, and cuts to the nub of things very quickly. I learned a great deal about what craziness the global money men stirred up, with little thought for, or knowledge of, what the outcomes could be for people and countries.
My one gripe is that there is no index or bibliography, and a glossary explaining some financial terminology to the lay reader would have been helpful.
The tsunami of cheap credit that rolled across the planet between 2002 and 2008 was more than a simple financial phenomenon: it was temptation, offering entire societies the chance to reveal aspects of their characters they could not normally afford to indulge.
Icelanders wanted to stop fishing and become investment bankers. The Greeks wanted to turn their country into a piñata stuffed with cash and allow as many citizens as possible to take a whack at it. The Germans wanted to be even more German; the Irish wanted to stop being Irish.
Michael Lewis's investigation of bubbles beyond our shores is so brilliantly, sadly hilarious that it leads the American reader to a comfortable complacency: oh, those foolish foreigners. But when he turns a merciless eye on California and Washington, DC, we see that the narrative is a trap baited with humor, and we understand the reckoning that awaits the greatest and greediest of debtor nations
Faults and follies of both the borrowers and lenders are pilloried in amusing detail with irony and some compassion. My favorite stories include the bank with the toilet at the summit of an office tower so that the CEO could say they he was crapping over his rivals, the Greek manner of taxation described as both corrupt and corrupting, the tax office that was never asked how much tax was collected by an about to become bankrupt government, and the preservation of elves in Iceland. (It appears that some Icelanders believe that elves can be made homeless so that when an alumina refinery was built some time and money was spent to ensure that no elves would be trapped by the building.) Such is the power of the writer that I was left wondering what and where are the elves in Australia.
Excellent journalism here, but not as engaging as The Big Short unless you follow the confusing language of global finance. The narrative does get stronger with each successive chapter so give it time to grab your attention.
I was very interested that it ended on an optimistic note. I hope that view is correct!
Mr. Lewis has a curious ability to find quirky interview subjects, and often focuses on their insights and delusions, their strengths and weaknesses – as he did in The Big Short. This he also does for the countries he visits. He also has a wonderful writing style – comic and tragic in turns. He subtly outlines and illuminates the absurdities in his stories and subjects without bullying them or seeming moralistic or judgmental – he leaves that up to his readers.
Then the author visited one last country (the United States, specifically California). Piled on the other stories, reading about California’s problems was just plain sad. When a prison guard in California earns $100,000 and is allowed to retire after five years and receive a pension almost that generous – how can anyone believe that’s sustainable? Yet California’s political gridlock is not that much different from that of the US Congress … and that doesn’t bode well for any quick recovery from our economic doldrums.
I’ve read a string of books about Wall Street and the US economy recently, and that may seem like masochism to some people. Oddly, I feel better understanding the US and the world as they really are. It makes me feel I’ll be able to sort out the rhetoric in next year’s presidential and congressional elections and figure out whom to believe.
I had already read the first four articles when they appeared in Vanity Fair, but I had not yet gotten to the article on California. In fairness, Boomerang was a given to me as a gift so I did not come out of pocket to put it on my bookshelf. I enjoyed revisiting the four stories and the new California story.
They each seemed to work better in the collection than standing on their own. Since each story is relatively short, they lack the depth and understanding I'm used to getting in one of Michael Lewis' books. Collectively, there is bit more depth as you can see how the five different countries got into trouble in different ways by becoming over-leveraged.
It's a Michael Lewis book, so that means it's easy to read and smart. He has a gift for taking complicated subjects and using individuals to highlight how his theories work in the real world.