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Chickens coming home to roost,
This review is from: Boomerang: The Meltdown Tour (Hardcover)
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After the turn of the Millennium to the present day, it would seem that we have invented new, more ruinous variants of `bubble thinking,' efficient only in the speed and devastating power in bankrupting entire economies and countries, let alone individuals and firms.
Michael Lewis, whose previous work includes his narration on the US sub-prime bubble (`The Big Short') and the power of money and statistics in sport (`Moneyball'), here journeys across Europe to show how the contagion of hopeless debt and living beyond our means spread from US markets, and how different countries symptomised this contagion. And so:
Iceland: where the financers and young business Turks of Iceland convinced themselves that selling on debt and gambling on and owning assets in other countries could transform their national culture overnight from one whose dominant industry is fishing, to finance. That they could quickly acquire global financial mastery, they convinced themselves and others, as the crippling debt passed on to our own civic and municipal institutions shows.
Greece: where the hatred of taxes, greed in all sectors including the public, and a general individualist culture went hand in glove with the easy and fast money of the debt bubble markets.
Ireland: where the nation's financiers put tremendous faith in commercial property developers and speculation, and sold land and property parcels to each other.
Germany: where the national character trait of clean on the outside, dirty on the inside, is shown by the avoidance of their own bubble, and a tendency to finance the sub-prime borrowing of other countries, whilst retaining a certain national characteristic faith in the word of others in believing without question the ratings agencies Triple A status.
And finally back to America, where one of the most financially parlous states, California, is shown to exhibit some of the worst excesses of all of the above, including a greedy public sector, and a lack of faith and goodwill between Governors and governed.
A key thesis in Lewis's book is that it is national, civic and social character and culture as lived out by communities and individuals that is a key determinant when dealing with bubble thinking and surges and famines of wealth. Which way do people jump when they are in the money, and out of it? Why does short term fulfilment for individuals so often trump longer term well being of communities? Lewis does not give us moustache twirling corporate villains for us to let us off the hook. Part of the responsibility is ours.
That this sobering and sometimes frightening tale is told with zest and humour is a gift of this particular writer. There is no small measure of optimism to. We are shown individuals who do speak up to sound the alarm and try and turn the tide, including academics and city leaders. Lewis clearly believes that right thinking can bring lasting cultural change. We can change before externals and environment force us to.