Summary
In "Boomerang: Travels in the New Third World," Michael Lewis embarks on a journey to dissect the anatomy of the 2008 financial crisis across various nations, revealing how the tsunami of cheap credit unearthed latent societal idiosyncrasies. The book opens in Iceland, where a nation of fishermen transformed into a hedge fund, amassing debts eight times their GDP before collapsing spectacularly. Lewis captures the surreal atmosphere of Reykjavik, where a new class of black-clad financiers replaced the old guard, only to vanish when the bubble burst, leaving ordinary citizens to grapple with the wreckage.
Moving to Greece, Lewis exposes a culture of systemic corruption and tax evasion, where government jobs became piñatas and public services were plundered. He visits the Vatopaidi monastery, implicated in a scandalous land swap that brought down the government, symbolizing the moral decay at the heart of Greek society. The author paints a vivid picture of Athens, a city perched on the edge of financial collapse, where the weight of debt and the absence of civic trust threaten to unravel the social fabric.
In Ireland, Lewis explores how the Irish male's obsession with conquering Ireland using foreign money led to a catastrophic property bubble. He introduces Morgan Kelly, an economist who presciently warned of the impending crash, and contrasts his insights with the reckless optimism of Irish bankers and politicians. The author captures the frozen-in-time quality of Irish politics, where a business-friendly party clings to power despite the economic devastation, while ordinary citizens grapple with unemployment, emigration, and the burden of private debt transferred onto the public balance sheet.
The narrative then shifts to Germany, where Lewis delves into the German psyche, drawing on Alan Dundes's theories of anal German folklore to understand the nation's complex relationship with filth and order. He visits the German Finance Ministry, a monument to Nazi ambition, and interviews Jörg Asmussen, a deputy minister grappling with the moral and financial implications of bailing out profligate neighbors. The author exposes how German banks, while exhibiting restraint at home, engaged in reckless lending abroad, fueling bubbles and exacerbating the global financial crisis.
Finally, Lewis turns his gaze to America, where he examines the financial woes of California and the struggle of local governments to cope with dwindling resources and rising pension liabilities. He profiles Arnold Schwarzenegger, the former governor, and explores the state's dysfunctional political system, where mass delusions and a preference for short-term rewards over long-term planning have created a perfect storm of financial instability. The book concludes with a bleak assessment of America's ability to self-regulate, suggesting that only a painful environmental reckoning can jolt the nation out of its state of denial.
"Boomerang" is a darkly comic and insightful exploration of the human foibles that underlie financial crises, revealing how cultural traits and societal values can amplify the impact of economic shocks and shape the destinies of nations.