What is a boomerang and how does it apply to the problems of a world faced with replacing productivity and creativity with speculative finance? Without looking it up on Wiki, I recall a boomerang being a hunting tool. Aborigines used it to stun or deliver a debilitating injury to their prey in order to approach it and then administer the kill. Obviously there is a political underlying reality to what has facilitated the West's financial woes but that isn't best exemplified in a primitive hunting stick that returns if it misses its target and ultimately ends up becoming more a toy than a useful tool.
Today, dear worst reader, we talk about Boomerang by Michael Lewis. And even if it doesn't matter - and it might not come across that way as you read on - I love this book. In fact, it's the second by Lewis I've read, and I loved the first just as much. He has a knack for writing short, precise books that get right to the point and he does it in a pleasurable way. So. With niceties behind us… Although I try to steer away from being a critic and/or a reviewer, there are a few things I have to criticize about Boomerang. First, to me, Mr. Lewis should stick with calling this book "The Meltdown Tour" like the Kindle edition I have or "Travels in the New Third World" which (I think) is part of the title for the US version. Of course, being the successful writer that Mr. Lewis is also means that he can hop-skip and jump around the world trying to find interesting ways to explain our doom and call his book anything he wants. Yet, I still have to ask: Who would ever think to write something on this subject matter in the form of a travel journal? Great idear, dude.
Even if the boomerang metaphor doesn't really fit, I get what Lewis is trying to say with it. And, as I'll explain in a sec, it might be better applied to something/somewhere else. I reckon throwing something into the air and having it magically/automatically return to you is kind of a catcher. It's just that I think he's looking for something along the lines of 'what goes around comes around.' Or perhaps it's more like 'you reap what you sew.' Nomatter. I simply disagree that the financial woes in our debt ridden western world can be explained and/or understood from the point-of-view that it's all about something we did (in the past) which is now coming back around to bite us in the ass. Unless, of course, the boomerang worked as it was intended to work. I digress.
The thing that most people miss when contemplating wall street is that the west has replaced idears such as merit and achievement, and if you go even further law, with a new kind of hereditary entitlement. That's right, I'm referring to the type of entitlement that the Enlightenment tried to get rid of. One of the tricks used to cause this re-establishment of entitlement has culminated in the simple act of commoditizing EVERYTHING. Hence the misunderstanding that there is a wall street and a main street. Wall street is simply the entitlement that all main street is trying to get at. Main street has happily and joyously enabled wall street and I would even go so far as to say that it's done so more than partisan politics has. Welcome to the new world-order formula of consume equals survive by any means necessary.
Put another way, if you really want to get ahead today and/or move beyond just making a living you either have to be a Bill Gates or a in-the-right-place, at-the-right-time bond trader for a company like Goldman Sachs. The beginning of this new century proves more than in any other time that working for a living, that is, actually earning something, has gone the way of the dinosaur. All that's left for us now is speculation and debt. And these two things are like a boomerang, I guess. Lewis writes: "When you borrow a lot of money to create a false prosperity, you import the future into the present." Ok. I guess that's what goes around comes around. Or? Anywho. Having grown up in this gluttonous do-nothing, achieve-nothing yet get-ahead world (fail-upwards) only one question comes to mind: how did it get like this? The dawn and the hey-day of the industrial era was not about the likes of Henry Ford or Thomas Edison maintaining fortunes by speculating on derivatives that are based on debt that was created by selling-off a nations production capacity. The problem with all this Tommi-contemplation, stirred by Michael Lewis' book, is that I know the answer(s) as much as I know the nose on my face. Yet who really wants to know noses? I digress again.
As stated, this is my second book by Michael Lewis and I'm digging this guy more and more. Lewis has a unique ability to intertwine journalism with story telling. So. If you want to know how the western world's debt problems are intertwined with wall street shenanigans Michael Lewis is for you. The best part of it is that you're gonna get the added bonus of not only having a quick education in the trickery of world finance but also some insight into the character and personality of nation-states that seem to compete with one another just like toddlers in a sandbox where the toys they fight and bicker over are "securitized fish"* and other financial derivatives.
The book has five chapters, each detailing deadbeat countries and their debt woes. Lewis starts his travels with Iceland, then moves on to Greece, followed by Ireland, Germany and ends with California where a somewhat strange but interesting interview with Arnold Schwarzenegger is inserted. The thing that bothered about this book is how Lewis included Germany in his story as though it too is a deadbeat nation. Obviously, all the places Lewis visited have serious debt and finance problems, including Germany. Yet, comparatively, the only one that seems to be able to manage the problem is Germany. So it doesn't make much sense to me why Lewis didn't put a little more effort into setting the Germans aside.
Maybe I'm biased because I live here, but if you ask for Tommi's humble opinion, Germany shouldn't be lobbed in with countries that are basically nothing more than borderline madhouses (what can you expect from a country (Iceland) that believes Milton Friedman could be an architect of a new economy?) or criminal enterprises (the Greek government). The west has gone through various experiments in economics and politics in the last (insert # years here). As angry as I might be with my choice of expatriation country and these friggin' Krauts, there is one thing that you can't take away from the Germans. Post-WW2 Germany is probably the only country that has been clearly run/governed by the word of law like no other country. Forgive me for generalizing here, but Germany doesn't just interpret law or use law for the sake of providing advantage(s) to politics (government) or interest groups (corporations); all of which is the basis for American't and other Anglo-driven countries to have such run-amok economies. You would think that some kind of praise is deserved for how Germany, as a country, has conducted itself since the advent of the Euro and the advent of the anglo way of living beyond ones means. While all Anglo influenced countries consume themselves into deeper and deeper holes of credit/debt, I can barely find stores in Germany where I can use my mastercard to buy stuff - and it's 2012! For reasons too obvious and outdated, people insist on trying to drag down these Krauts or just lob them into the same Eurowasteland pot.
One thing fascinating with this book is how Lewis provides a few short examples of the differences between Germans and Anglos, especially in the realm of world finance. (And this is, btw, IMHO, the subject that Lewis could have gotten into a bit more in order to set the Germans aside.) But all is not rosey. What he fails to say is that, as bad as the "Landesbank" scandals (2008) were, the Germans could never go as far as the Irish or the Greeks. Or does he say that? Yes. Actually he does say that. My bad. He just doesn't expand on such a revelation enough. He writes, "The Germans took the rules at their face value: they looked into the history of triple-A-rated bonds and accepted the official story that triple-A-rated bonds were completely risk-free." And then he says, "Others do not behave as Germans do: others lie." Sure, the Landesbank traders bought into subprime up to the day that the market crashed, making them somewhat gullible, but they did so because they thought they could trust the US, and more importantly, the obviously corrupt, biased and down-right stupid Anglo-driven rating agencies.
Why Lewis fails to differentiate Germany from the deadbeats is not a mystery to me. In fact, it's one of the reason I don't watch BBC or CNN anymore. I just can't bare to hear all this anti-German talk as though it's the early 20th century all over again. I mean, seriously. Up until WW2 Germany was on the verge of becoming a super power beyond, at the time, anyone's belief - and we all know what that culminated in. Since then these Krauts have worked their asses off and have gallantly abided by the Marshall Plan and its doctrine of commerce good, war and divisiveness bad. Now that they have given up their beloved Deutsche Mark, even accepted idiotic mafia-like southern Eurowasteland liars into the fold, no one seems to want to credit Germany for actually doing a pretty good job at economically leading this whole mess. Btw, at the same time they also managed to integrate their own deadbeat former soviet other-half into the country. Somebody stand up and say: Alaaf!
So, are people afraid that the world may someday replace English with German? Oh! Did I just stumble upon the answer? The Anglo-fear makes no sense to me - unless you watch the BBC cover the demise and failure of the sold-out British economy. But then again, Lewis says this about Krauts, and when I first read it, I was seriously pissed: "For the Germans the euro isn’t just a currency. It’s a device for flushing away the past. It’s another Holocaust Memorial." Come on. Are you serious? What do these Krauts have to do? Because of who they are, their past, and how they concurrently conduct themselves, they still must face this level of patronizing as though the sandbox of little children had some kind of scary superman in it that just might represent, at the least, a different way of doing things. Be afraid, people. Z'Germans are coming!
Anyway. I really enjoyed this book, even though I think Lewis is a bit naive and perhaps lazy when it comes to the part about Germany. But what the heck. At least I learned more than I thought I already knew about the gullibility of Germans. This is great read - even if you're skeptical of the German way of doing things. Write on, Lewis.
Rant on. -Tommi-
* "The fish had not only been privatized, they had been securitized." -Michael Lewis, from the chapter about Iceland and how fisherman turned away from the sea for careers in speculative finance.