This book is a shocking read. Author, Michael Lewis, makes high finance as gripping as a caper flick, although I don’t think it will ever be one—how do you make bankers selling each other worthless paper as cinematic as the casino heist in Oceans 11? He goes into detail about Iceland, Ireland, Greece, Germany, and California, all in dire straits, each fundamentally different and each reflecting the character of its people.
Iceland’s waters abound with fish, its land seethes with volcanic energy, so its economy was fish and energy. Suddenly banking with no experience, it did not realize it was under water until too late. Toxic assets from the U.S.A. had a featured role.
Ireland sold itself a land boom. Poor for much of its history, it was suddenly building subdivisions, convention centers, and hotels, all coming to a shuddering halt when the bubble burst. Today empty un-rented office towers and unsold houses rot where they were abandoned.
In Greece, tax dodging is a way of life. No one pays who can lie or cheat out of it, and the perennially strapped government cooks the books to create surpluses out of deficits. Tax- collectors stubborn enough to try to collect are sent to the sticks. Joining the Eurozone is exposing the whole tottering mess.
Germany, the biggest economy in the Eurozone, kept buying U.S. toxic assets long after all others had stopped. Why? Because they were rated AAA. Germans play by rules and expect others to. Now trying to prop up Eurozone’s weaker economies, it manages to bury dirty secrets just as, says author Lewis, it hides its fascination with filth under clean and shiny exteriors.
California managed to outlaw raising taxes while demanding every kind of service. Arnold Schwarzenegger, who decided to run for governor while talking to David Letterman on The Late Show, took office owing no favors but his attempts to fix the system were continually thwarted. He looks back on the whole experience with detached amusement. The state now lurches from crisis to crisis. Lewis predicts it will get worse until public services are all but gone, as in Vallejo with skeletal police, fire fighters, and teachers, and one city employee plus a mayor who doubles as fire chief. The mayor carries on sustained by irrational optimism, which, says Lewis, is about all the state has left.
He concludes that most of us are living too high off the hog, demanding services we refuse to pay for, or if we’re rich, striving to get richer and still not pay taxes. He suggests that nothing will change until we hit bottom. And when will that be? It’s possible we already have, but like passengers on the Titanic, simply refuse to notice.
TODAY I VISITED ZUCCOTTI PARK FASCINATING AND BAFFLING. WILL POST FRIDAY.