Boomerang: Travels in the New Third World
Michael Lewis touches down in the nations damaged by the 2008 financial meltdown and proves – yet again – that he can turn anything into compelling prose.
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In Ireland a single bank lost $3.4 trillion, largely on bad property deals. This mess, says Lewis, “was created by the sort of men who ignore their wives’ suggestions that maybe they should stop and ask for directions, for instance.” (Among other indelible images from Ireland: a brand-new, abandoned village in the middle of a rain-swept former potato field. Apparently no one bothered to ascertain before building it whether or not anyone would want to live in it.)Skip to next paragraph
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The story Lewis follows in Germany is different in that – rather than greed or out-and-out incompetence – the Germans seem to have been guilty of massive credulity. Because German bankers tend to play by the rules, says Lewis, they couldn’t comprehend that American bankers often do not. So when “extremely smart traders inside Wall Street investment banks” created “diabolically complicated bets” and then went in search of “some idiot” to “take the other side,” it turned out that “a wildly disproportionate number of those idiots were in Germany.”
Lewis finishes his tour of what he calls “the new third world” in California. There (after taking a dizzying high-speed bike ride with Arnold Schwarzenegger), he meets with the mayor of San Jose, a city so in the red that “it could cut its debts in half and still wind up broke.” How did such a thing happen?
“I know how it started,” explains the mayor. “We live near rich people so we thought we were rich.”
Lewis tells his tale of financial malfeasance through a lively cast of global characters. There’s the Icelandic cod fisherman who became a currency trader on the strength of three days of training. There’s the Greek monk-turned-opportunistic capitalist. There’s the cheerful Irish retiree who was so outraged by his country’s shenanigans that he threw rotten eggs at a bunch of high-level Irish bankers. (Then he took the bus home for a cup of tea.)
Overall, “Boomerang” is the story of how governments throughout the developed world allowed politicians, bankers, and ordinary citizens to pile up debts they could never possibly repay. And now the whole world will be paying the price – perhaps for a long time to come.
It’s not a pretty story, but thanks to Lewis it is a compelling one. And despite its bleak contours Lewis doesn’t imply that it’s a completely hopeless one. Future generations don’t always figure out how to solve the crises created by their elders, he points out. But then again, “you can never rule out the possibility that they will.”
Marjorie Kehe is the Monitor’s books editor.