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College Quarterly
Fall 2013 - Volume 16 Number 4
Boomerang
Michael Lewis
New York: W. W. Norton, 2011
Reviewed by Gregory G. Gaydos

If there is a better, more interesting and eclectic writer in the English language, I would like to meet him. How can a man who wrote such a wonderful book on the inside of baseball, Moneyball, which explains how the Lilliputian Oakland Athletics could compete with the giants of baseball with monstrous payrolls, also write such an incisive account of the most important economic crisis of our time? Someone should write an article about why some of our better conservative writers—Charles Krauthammer and George Will, for example—and some more liberal ones as well—Doris Kearns Goodwin and Stephen Jay Gould, for instance—have also written intelligently about baseball, our most elegant sport.

Lewis conducts a macro analysis of the 2008 economic crisis by examining the micro-crises of five countries who went mad between 2002 and 2007, amidst the “tsunami of easy credit that swept across the globe.” He uses a metaphor of the nations sitting in a dark room with a pool of money in the middle of the room, from which each country raced in and grabbed the lucre and ran off and spent it without anyone knowing. Each revealed their “national character” in the way that they spent it, which would please Gregory Bateson and Margaret Mead, who were associated with the national character movement after World War II.

In Iceland, the “alpha males” released a suppressed nostalgia for the past, which allowed them to quit fishing and turn the whole country into a hedge fund.

The Greeks wanted to turn their country into “a piñata stuffed with fantastic sums and give as many citizens as possible a whack at it.” One third of the jobs are in the public sector and in “just the past 12 years, the wage bill of the Government sector has doubled in real terms” because those jobs pay three times the amount of the private sector jobs. They get to retire at 55 if their jobs are “arduous.” Six hundred occupational categories qualify as arduous. Policemen and firemen, O.K. But hairdressers? The National Railway takes in 100 million Euros a year, but the Railway labour costs are 400 million Euros. The total national debt is $1.2 trillion, or $250,000 for every Greek citizen, an amount which will never be repaid.

The Irish used the easy credit to buy what they loved—Ireland (from each other). The building industry went wild building houses and condos without bothering to figure out who was going to live in them.

The Germans were too conservative and sedate to act improperly in Germany, but their fascination with filth led them to make outrageous bets internationally in Greece and America.

The Americans, like the Greeks, spent lavishly on its public sector. A “Sixty Minutes” television special revealed that U.S. state and local governments faced a collective annual deficit of roughly half a trillion dollars and noted another trillion and a half dollar gap between what the governments owed retired workers and the money they had on hand to pay them. When Vallejo, California, for example, declared bankruptcy in 2008, 80% of its budget was wrapped up in public safety pay and benefits. The police and fire department have been cut in half; the rest of the public sector, is effectively zero.

Lewis ends on a philosophical note by citing British neuroscientist Dr. Peter Whybrow, who states in his book, American Mania, “the dysfunction in American society is a product of its success because human beings are neurologically ill-designed to be modern Americans.” Our brains have evolved over hundreds of thousands of years with a lizard core built for scarcity. This core is wrapped in a mammalian layer, which makes us maternal and sociable, and a higher layer which allows for memory and abstract thought. Unfortunately, faced with abundance, we revert to our reptilian brain, maximize our acquisitiveness, and lose the ability to self-regulate. Although this is most clearly seen in the public sector, where over a hundred cities are likely to follow Detroit into bankruptcy, he says it would be a mistake to simply blame greedy unions, for the problem runs throughout society, from the home owner who clearly bought more home than his income would justify, through the banks that made these ninja loans (no income, no jobs, no assets), through the investment banks that marketed these toxic assets as derivatives, to the traders in the investment houses who sold them to their customers, to the traders who made credit default swaps (insurance bets that the loans would go into default) on the derivatives they had just sold to their customers, to the politicians who pushed Fannie Mae and Freddie Mac to buy these toxic derivatives, and to the executives in Fannie and Freddie who walked off with millions of dollars in bonuses that they awarded themselves for making loans to the sub-prime market. Parenthetically, just yesterday, Fannie Mae asked Morgan Stanley in its $15-billion-dollar settlement to make the money available for sub-prime loans: plus ça change, plus c’ést la même chose.

The anti-hero of Lewis’ narrative is Kyle Bass, a hedge fund manager who saw the coming crisis in 2008, bet $5 million of his own money, created a hedge fund and became a billionaire. When the nations absorbed all the bad loans of their banks, he did the math and said the nations were going bankrupt next. No one listened to him before (except his rich friends who became the super-rich) and one wonders if anyone is listening now.

Lewis entitles the last chapter, “Too Fat to Fly” to explain America in the vain hope that we will regain our capacity for self-regulation. Whybrow told Lewis a parable about a pheasant at Blenheim Palace, where he had rented an apartment while at Oxford. The last winter was extremely cold, and the pheasant hunters were quite efficient and bagged all the pheasants save one, which was named Henry. Since he had no competition, he ate all the seed. He grew large, chased away other birds, and thus became obese. He kept eating even though he was fat, because he had no capacity for self-regulation. One day he disappeared. A fox ate him. He was too fat to fly.


Gregory G. Gaydos is Associate Professor of Political Science at Hawai’i Pacific University in Honolulu. He can be reached at gggaydos@yahoo.com.

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