The versatile author of Moneyball, The Blind Side, and The Big Short travels to Germany, Greece, Iceland, and Ireland to explore the origins of the recent financial crisis - and then he brings it back home to the United States.
My thoughts
This is a whole new genre of travel writing. Each chapter is dedicated to a different country and its dysfunctional economic system (they started as individual articles for Vanity Fair). Michael Lewis first travels to Iceland, where clueless Icelandic fishermen-turned-bankers ran their national economy into the ground. In a chapter titled "And They Invented Math!" he turns his attention to Greece and recounts how a projected budget deficit of 7 billion euros had to be revised upward to 30 billion because "until that moment, no one had bothered to count it all up." (There is also the bizarre story of a group of monks who managed to get the Greek government to give them land, which they turned into a real estate empire whose worth can be measured in the low billions.) Lewis's next stop is Ireland, whose Celtic Tiger had been transformed into a Celtic Garfield and whose citizens seem oddly complacent about their country's financial collapse. And then there's Germany, which finds itself suddenly responsible for the rest of the Eurozone's financial mistakes.
Lewis highlights every absurdity with a gleeful how-could-they-not-see-this-coming tone. But the brilliance is evident in the last chapter, when Lewis turns the same voice on the United States. Lewis travels to California, where he goes on a memorable bike ride with former governor Arnold Schwarzenegger and talks to a fire chief about the tough decisions he's made regarding pensions. The bike ride is fun to read about, but Lewis makes sure the impact of the financial crisis hits home when he takes the conversation to a municipal level.
Lewis paints a truly horrifying picture of an unethical, under-regulated financial system driven by the bottomless greed of American bankers. Bankers were rewarded with large salaries and even larger bonuses, leaving them absolutely no incentive to think beyond short-term gains. This ruined the financial markets - and everywhere else in the world, it was seen as a completely unconscionable way to conduct business. At one point, Lewis interviews a lifelong German public servant and asks him whether he ever thought of going into private practice and making a fortune. "But I could never do this," is the shocked reply. "It would be illoyal!" This neatly sums up the difference between America and the rest of the world, and it explains how so-called financial experts were mislead into making disastrous decisions - they were playing by a different set of rules that the Americans disregarded.
The Big Short, Lewis's in-depth study of the causes of the U.S. crash, has catapulted to the top of my reading list.
Bottom line
A quick, hilarious, and terrifying read.
Fine print
Boomerang: Travels in the New Third World, by Michael Lewis
Genre: nonfiction, finance, travel
Photo from Goodreads
I borrowed this book from my library.
