A review of Boomerang: Travels in the New Third World, by Michael Lewis
@@@@ (4 out of 5)
If you’re scratching your head over the financial news from Europe these days and wondering what on earth has been happening in Greece, Ireland, and elsewhere that has everyone, especially the Germans, in a state of panic, Michael Lewis will make it all clear to you with his customary straight talk, humor, and insight. Boomerang — a collection of Lewis’ articles for Vanity Fair on what he calls “financial-disaster tourism” — lays out what even the “newspaper of record” declines to do: tell it like it is.
News coverage blathers on about “overspending,” “financial mismanagement,” and other circumlocutions. Michael Lewis tells us that in Iceland, the leaders of the two enormous banks that led to the country’s downfall were twenty-something kids who had not a clue what they were doing and were regarded by even the greatest risk-takers in the banking industry as downright “crazy.” In Greece, “every single member of the Greek parliament is lying to evade taxes,” government salaries put private-sector jobs to shame, and the culture of entitlement is so deeply embedded in the culture that it seems inconveivable Greece could ever agree to pay its debts. In Ireland, another of the financial basket cases, the problem lay with three big banks, all of them run by those whom anyone outside the banking industry would likely call gamblers. They loaned out enormous sums to themselves and even larger amounts to reckless real estate developers whose projects could never be completed. As Lewis writes, “Anglo Irish was probably the world’s worst bank. Even worse than the Icelandic banks.”
What is most disturbing about these tales of financial malfeasance in Iceland and Ireland, and probably soon in Greece as well, is the comparison with our own country. “In America the banks went down but the big shots in them still got rich; in Ireland [and Iceland] the big shots went down with the banks. Sean Fitzpatrick, a working-class kid turned banker who built Anglo Irish Bank more or less from scratch, is widely viewed as the chief architect of Ireland’s misfortune: today he is not merely bankrupt but unable to show his face in public.” And Lloyd Blankfein still lords it over Goldman Sachs and, with it, all of Wall Street!
Lest you think the failure to prosecute the malefactors of great wealth on Wall Street was America’s only failing, take a look with Lewis at San Jose. As he notes, “San Jose has the highest per capita income of any city in the United States after New York. It has the highest credit rating of any city in California with a population over 250,000. It is one of the few cities in America with a triple-A rating . . . [Yet] the city itself is not all that far from being bankrupt.” San Jose, now the 10th largest city in the USA, is just one of hundreds of cities throughout the country, big and small, that are flirting with insolvency as the federal government pushes ever more financial obligations onto the states, and the states push them further downhill to counties and cities. And many experts concur that the state of California is in the worst shape of all.
Boomerang is not a hopeful book. It is supremely well written, hilarious at times, and always lively as it deals with Lewis’ interactions with individual people throughout, but the sum total of the conclusions a reader reaches is to head for the hills.