In This Review

Boomerang: Travels in the New Third World
Boomerang: Travels in the New Third World
By Michael Lewis
W. W. Norton & Company, 2011, 224 pp

 

Lewis, the bestselling author of Liar’s Poker and The Big Short, has written a breezy, bottom-up account of the ongoing financial crises in Iceland, Ireland, Greece, and two cities in debt-ridden California: financially strapped San Jose and bankrupt Vallejo. The book is fun to read but also scary. Through his reporting and interviews, Lewis relates many amusing anecdotes about the roles of particular individuals and institutions and illuminates the social attitudes behind the naiveté and lack of discipline that laid the bases for the crises. Different cultures produced distinct responses to financial adversity: Irish acceptance and passivity, Greek anger and hostility, and an Icelandic decision to elect female politicians who were less macho and more sensible than the men who had damaged the country’s economy. Californians, Lewis reports, have not yet reconciled their desire for public spending with their aversion to taxes. He also explores how traditionally staid German banks came to lend so much to overborrowers, such as the Greeks, not only producing large losses but also rendering themselves vulnerable to future crises. The irony is that the German government now must decide how much financial assistance to give other members of the eurozone to help save Europe from a borrowing binge financed by those very German banks.