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on May 8, 2017
I wish everyone would read this book. I thought it might be a bit outdated, since it describes events that happened during the 2008 financial collapse. Unfortunately, everything in this book applies today as much as it did 8 years ago. This is a bottom-line view of how countries go crazy and throw themselves into bankruptcy, and nobody seems to see it coming. I hope enough folks read it to save the USA from the same path. As always, Michael Lewis is a smart, funny guy who somehow makes economics the most entertaining subject on earth.
A Look into 5 Nation's Unique Psychological make-up and how each Contributed to the Economic Bust in Each Nation
on September 27, 2014
Any review of this book would have to start by pointing out that this book is not a new original work. It is, instead, a compilation of previously published essays that can be found in a variety of periodicals (i.e., The Atlantic, etc.). That being said and gotten out of the way, it should also be noted that this book is not an examination of economic factors contributing to the economic bust of 2007-2008 in each of the nations discussed. There is no analysis or coverage of economic variables such as debt levels, regulatory environments, mortgage, debt and financial markets, etc. The book, instead, provides a discussion of each nation’s unique psychological profile and how this, implicitly, contributed to the crisis in each nation. This “profile” is not discussed or examined through a formal psychological analysis but instead through stories told about visits made to each nation and observations made about its peoples. Something like a travelogue told through stories involving meeting bankers, indebted individuals, Arnold Schwarzenegger and even monks.
Five nations are examined in the book. They are Iceland, Ireland, Greece, Germany and the US. In Iceland Mr. Lewis found overconfidence in its society to be at fault. This was due to the mentality, of overconfidence, of fisherman in that country that so permeated that nation’s psyche (after all, that nation is nation of fisherman). In Greece the problem was that society was unable to govern itself. It was a society so self-centered on the individual that no one was willing to sacrifice for the common good but each wanted to engorge himself/herself at the trough. In Ireland the problem was newly found wealth. Ireland has historically been a poor nation but with so much wealth being made so quickly society just did not know how to deal with. Naturally, as a result, it went on a spending spree. In Germany the problem was that society was so used to “follow” the rules. Hence its investors got burned when they carried this assumption to the international market. They assumed, for example, that the US bond rating agencies were still following the rules of ethically and effectively rating bonds. The reality turned out to be different and as a result of not being able to think outside the box (i.e., not being able to imagine others not “following the rules”) they ended up being badly burned. In the US the problem was consumerism run amuck combined with the fact that society wanted things without having to pay for them. Hence the explosion in private debt and government debt (in the latter everyone wanted to keep on and expand spending while simultaneously keeping or lowering tax levels) which, eventually, burst.
Albeit the stories only examine societal phychology in a pretty simple way, only through the rather narrow lens of relatively short trips (he stayed for only a few weeks in each country), the author seems to have hit the nail on the head. Plus each essay is very entertaining. Hence the book is highly recommended despite its dearth of a sophisticated analysis of macroeconomic issues contributing to each nation’s disaster.
Five nations are examined in the book. They are Iceland, Ireland, Greece, Germany and the US. In Iceland Mr. Lewis found overconfidence in its society to be at fault. This was due to the mentality, of overconfidence, of fisherman in that country that so permeated that nation’s psyche (after all, that nation is nation of fisherman). In Greece the problem was that society was unable to govern itself. It was a society so self-centered on the individual that no one was willing to sacrifice for the common good but each wanted to engorge himself/herself at the trough. In Ireland the problem was newly found wealth. Ireland has historically been a poor nation but with so much wealth being made so quickly society just did not know how to deal with. Naturally, as a result, it went on a spending spree. In Germany the problem was that society was so used to “follow” the rules. Hence its investors got burned when they carried this assumption to the international market. They assumed, for example, that the US bond rating agencies were still following the rules of ethically and effectively rating bonds. The reality turned out to be different and as a result of not being able to think outside the box (i.e., not being able to imagine others not “following the rules”) they ended up being badly burned. In the US the problem was consumerism run amuck combined with the fact that society wanted things without having to pay for them. Hence the explosion in private debt and government debt (in the latter everyone wanted to keep on and expand spending while simultaneously keeping or lowering tax levels) which, eventually, burst.
Albeit the stories only examine societal phychology in a pretty simple way, only through the rather narrow lens of relatively short trips (he stayed for only a few weeks in each country), the author seems to have hit the nail on the head. Plus each essay is very entertaining. Hence the book is highly recommended despite its dearth of a sophisticated analysis of macroeconomic issues contributing to each nation’s disaster.
on December 2, 2011
My understanding is that Mr. Lewis has lived in Berkeley, I'm not sure for how long. I would hope that he is more familiar with California than the "other" countries he wrote about, but his writing gives an appearance that he is less familiar with California.
I was fascinated with the first four economic travelogues and variations on the theme that no government can afford to bail out bank investors as well as bank depositers. In fact, I am beyond grateful for his recommendation of the late Alan Dundes' book, "Life is Like a Chicken Coop Ladder," with reference to German national character. A gift and spiritual discipline to become more conscious of one's roots.
But much of the California chapter reads like a love-song to Schwartzenegger and his four defeated ballot initiatives. It would take far more persuasive arguments to make a credible case that Schwartenegger is a political hero -- rather than an political hobbyist/opportunist carried away by a whim, more than The Actor, Act Two. And those initiatives were poorly crafted, with not much constituency and satisfying no purpose. And with respect to the California revenue problem, no mention is made of the truncated upper income tax brackets, or how Robert Reich's and Paul Krugman's arguments about how economic productivity is enhanced by a progressive tax system....and how these arguments might apply to California currently.
The shortcomings of this essay are so huge -- the only one of the five areas where I have knowledge -- I now worry whether the parts about Ireland, Germany, etc. might be more superficial than I know.
Entertaining and nuanced writing, but I was disappointed. I had not expected to be.
I was fascinated with the first four economic travelogues and variations on the theme that no government can afford to bail out bank investors as well as bank depositers. In fact, I am beyond grateful for his recommendation of the late Alan Dundes' book, "Life is Like a Chicken Coop Ladder," with reference to German national character. A gift and spiritual discipline to become more conscious of one's roots.
But much of the California chapter reads like a love-song to Schwartzenegger and his four defeated ballot initiatives. It would take far more persuasive arguments to make a credible case that Schwartenegger is a political hero -- rather than an political hobbyist/opportunist carried away by a whim, more than The Actor, Act Two. And those initiatives were poorly crafted, with not much constituency and satisfying no purpose. And with respect to the California revenue problem, no mention is made of the truncated upper income tax brackets, or how Robert Reich's and Paul Krugman's arguments about how economic productivity is enhanced by a progressive tax system....and how these arguments might apply to California currently.
The shortcomings of this essay are so huge -- the only one of the five areas where I have knowledge -- I now worry whether the parts about Ireland, Germany, etc. might be more superficial than I know.
Entertaining and nuanced writing, but I was disappointed. I had not expected to be.
on November 6, 2012
If you've been a subscriber to Vanity Fair for the past couple of years... you probably shouldn't waste your money; you may have already read this book. Pretty much all of Boomerang: Travels in the New Third World is taken right from articles Michael Lewis published in the magazine.
However! If you aren't a subscriber to this major publication (or almost any large, expensive print serial) like me (though I do love my Newsweek) AND you want to learn about how Europe screwed itself up so badly (and refuses to take the possible steps it needs to be saved), get it! It'll let you know! By the way I'm sorry for that extremely drawn-out sentence'ish thing. It was needed. Thanks to this book being made from a series of article installments, each problem he discusses is broken down and explained pretty well in and of itself. This is great for someone like me who often has to start and stop books either because of work or there was just another book I couldn't turn down...
What I liked most about Lewis' book is the questions it raises about the whole system of democracy. I'm not one to use the holier than thou "Founding Fathers" as evidence for just about anything, but I definitely agree with multiple statements written about a need for a republic to be filled with and governed by moral persons with more than just their own benefits on their minds. Like us, our nation has to be responsible with its finances (eeeeven in a recession): some of us will have to suck it up and pay more taxes and others of us will have to suck it up and take fewer benefits (us in the middle class have the humble pleasure of being a part of both!). Lewis shows us this through the experiences of Europe.
I'll leave this poor man's review with a great Socrates quote used in the book...
"Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress."
However! If you aren't a subscriber to this major publication (or almost any large, expensive print serial) like me (though I do love my Newsweek) AND you want to learn about how Europe screwed itself up so badly (and refuses to take the possible steps it needs to be saved), get it! It'll let you know! By the way I'm sorry for that extremely drawn-out sentence'ish thing. It was needed. Thanks to this book being made from a series of article installments, each problem he discusses is broken down and explained pretty well in and of itself. This is great for someone like me who often has to start and stop books either because of work or there was just another book I couldn't turn down...
What I liked most about Lewis' book is the questions it raises about the whole system of democracy. I'm not one to use the holier than thou "Founding Fathers" as evidence for just about anything, but I definitely agree with multiple statements written about a need for a republic to be filled with and governed by moral persons with more than just their own benefits on their minds. Like us, our nation has to be responsible with its finances (eeeeven in a recession): some of us will have to suck it up and pay more taxes and others of us will have to suck it up and take fewer benefits (us in the middle class have the humble pleasure of being a part of both!). Lewis shows us this through the experiences of Europe.
I'll leave this poor man's review with a great Socrates quote used in the book...
"Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress."
on November 26, 2016
This was a really interesting read. Irrespective of the topic Michael Lewis made this an enjoyable and at times humorous journey through the Countries concerned. A very well put together and very well delivered contribution to what it was like to live through those challenging days of the Great Recession.
on January 21, 2017
This is the Big Short, part 2. Instead of looking at how American banks made risky bets and hurt themselves and the public, this investigates how the financial crisis hurt whole countries. The five countries that Mr. Lewis reads up on, travels to, and conducts dozens of great interviews are (in order): Iceland, Greece, Ireland, Germany and the USA.
The chapters on Greece, Germany and the USA are particularly strong. There are two pages on Greece that are utterly brilliant - Mr. Lewis lays bare the sloth and corruption of the Greeks, and how it is unlikely that they will change their behavior in order to satisfy the Germans and stay in the EU. The chapter on the USA and it's problems with underfunded pension plans is devastating - Mr. Lewis grasps the very important fact (that most Americans are clueless about) that one should not only be concerned about federal and state budget deficits and debt, but also municipal debt and liabilities. As usual, Mr. Lewis stories are informative and often humorous. Excellent.
The chapters on Greece, Germany and the USA are particularly strong. There are two pages on Greece that are utterly brilliant - Mr. Lewis lays bare the sloth and corruption of the Greeks, and how it is unlikely that they will change their behavior in order to satisfy the Germans and stay in the EU. The chapter on the USA and it's problems with underfunded pension plans is devastating - Mr. Lewis grasps the very important fact (that most Americans are clueless about) that one should not only be concerned about federal and state budget deficits and debt, but also municipal debt and liabilities. As usual, Mr. Lewis stories are informative and often humorous. Excellent.
on May 17, 2014
I have lived in Iceland, worked in a German bank, eaten with many Greeks, and drunk with many Irish. His descriptions are all accurate and entertaining. Recalling the earlier US banking fiasco with the Mexican Brady Plan, it is very evident that bankers will never learn, they will just keep on banking. My own take on all of this: Use small, local banks, and avoid debt as you would the plague.
on October 12, 2011
Instead of reading the articles in Vanity Fair, I bought the book and found it a completely comfortable ride through the the countryside of some unbelievable places. You don't get any detailed view of things, sort of like having lightning flashes as you ride along, but the scenes are startling and make you reflect in ways that I would have wanted Lewis to do. Instead you just see his grotesque mask - like smile reflected in the windows. His analyses are fun, but misleadingly shallow. These three countries' slide into bankruptcy - Iceland, Ireland, Greekland - are amazing stories that seem completely unreal, even science fiction at times; but Lewis provides no real understanding for what went on and what will happen in the future. AS he points out, Germany seems the key to which direction the bailout of Greece will take, and whether or not the international economy will take another post-Lehman-like dive; but instead of giving us the real dirt on Germany's intentions, he diverts us with entertaining but highly irrelevant side trip into their fascination with feces and coprophilia. After all, what really distinguishes the fleissig hard working Germans from the Greek and Irish seems to have more to do with their determined trust and cooperation with each other, more like the other scandinavians, than with prurient coprophilia. How did they become so trusting - was it the utter devastation of WWII and the enormous hangover of guilt from the Nazi era? What taught them to be so rulebound that they demand ubiquitous order in all things?Was it the utter devastation and disorder of the black market?
The book raises many such psychological national mysteries but offers few plausible suggestions for any resolution: why do the Irish pay off their international debt in full when they could easily have defaulted with many fewer downside consequences? Why in heavens' name would Icelandic fisherman think they are good investment speculators? It seems so improbable! Lewis has a good time in a monastery and I guess it sheds some light on the cavalier attitude Greeks have to taxes and government corruption; but the central story is the Greek government as a corrupt enterprise, lying to the EU about its debt and intentions; and conniving with wall street firms to hide the debt (at great additional cost) from the EU. Again, Lewis' excursion into a greek monastery hides the story in fluff and display lighting.
So, kudos to Lewis for making these bizarre state actions publicly accessible; but a few humbugs too, for such shallow, patronizing and seductive analyses
The book raises many such psychological national mysteries but offers few plausible suggestions for any resolution: why do the Irish pay off their international debt in full when they could easily have defaulted with many fewer downside consequences? Why in heavens' name would Icelandic fisherman think they are good investment speculators? It seems so improbable! Lewis has a good time in a monastery and I guess it sheds some light on the cavalier attitude Greeks have to taxes and government corruption; but the central story is the Greek government as a corrupt enterprise, lying to the EU about its debt and intentions; and conniving with wall street firms to hide the debt (at great additional cost) from the EU. Again, Lewis' excursion into a greek monastery hides the story in fluff and display lighting.
So, kudos to Lewis for making these bizarre state actions publicly accessible; but a few humbugs too, for such shallow, patronizing and seductive analyses
on May 17, 2012
I am a Michael Lewis fan. I like his writing style and sense of humor. This book is typical of Lewis but doesn't all come together very well in the end to call it a book. As many have pointed out, this is a collection of shorter stories that were published by Vanity Fair. As such, it reads like a collection of independant stories that were thrown together to create a book but not a lot of work was done to make it a great book. I think I paid $1 for this on Amazon and it was money well spent. Germans probably won't appreciate this book but I found the chapter on Germany hilarious...but so was Iceland and Greece... I only gave it a three because the book ended without really bringing it all together to create a solid theme but I enjoyed it nonetheless. Great read for a long flight.
