Boomerang by Michael Lewis is the third entry in pursuit of my goal to read at least one book a month in 2016. Boomerang is an outgrowth of the research done for Lewis's previous book, The Big Short. Lewis delved into the causes of the colossal 2008 US financial crash and how it was driven by the subprime mortgage collapse. As he did, he repeatedly heard from various sources, including Meredith Whitney, about cities and entire countries that were in serious trouble.
This book intriguing on a global financial level but it also has implications on the human, sociological level. People will be people and they act in their own interest to obtain instant, albeit short term, gratification. One striking theme is how different countries behave with their newly burgeoning wealth as they begin to develop and gain that wealth. It isn't really a surprise that countries like Iceland, Greece and Ireland fail but I was astounded to learn the ways in which Germany is at the center of it all. An observer could be forgiven for wondering if they are trying to make amends for something.
While there are plenty of compelling stories in Boomerang, my favorite occurs when Lewis brings the narrative home to the US, and specifically to an interview with former California Governor, Arnold Schwarzenegger. I haven't previously read much about him, but Lewis's portrayal of Schwarzenegger is surprisingly and gratifyingly evocative of how I've always imagined his true character might be. Schwarzenegger rides his bike through the streets of Venice the same way he lives - looking forward - with no time for what's behind him. It's revealing that this man, without a background as a politician, tried so hard to do what he felt the people who elected him wanted done. Yet he couldn't accomplish anything of substance because those same people, as well as the career politicians, could not face the pain inherent in the process of correcting the $400 billion debt.
Related Note to all California taxpayers: The San Francisco Chronicle has an insightful article on the ever-expanding debt that analysts are growing increasingly concerned about. This debt is already negatively impacting California's credit rating, which in turns impairs the state's ability to borrow. Boomerang explains how the tumble will begin and ultimately leave the hapless taxpayers to deal with the pain they tried so hard to avoid by assiduously ignoring the debt issue.
“These liabilities are so massive that it is tempting to ignore them,” Gov. Jerry Brown
Like Lewis's other works, this book is a riveting study of the true nature of people and what motivates their characteristic behaviors, masquerading as a financial book. The book's end arrived too quickly for my taste. I would have been happy to remain in the grip of this skillful author for a quite a while longer. It would also have been edifying to read more of his findings and insights on the US. However, it ended neatly where it began. Perhaps he's saved some related content for another book. One can hope. Or it could simply be that Michael Lewis can write about anything and make it a superlative read, in which case we can confidently leave the choice of future material and topics in his capable hands. So far Flash Boys is the better book but this is a properly solid second place. I recommend you read it.