Michael Lewis has the gift of gab! His book on the financial crisis (the economic debacle that hit the United States and Europe, that almost brought the whole world down and of which we are not yet out of the woods), is so easy to read and so filled with wit that one forgets the horrific images of the failure that the book is describing; he makes plain what was the complete amorality or stupidity of the bankers, the investment brokers and the clients that they serviced, as they all marched toward the fantasyland that they created in which anyone could have whatever they wanted and suffer no consequences for their actions.
Contrary to that belief, when it came to fruition, the penalties for their irresponsible, unethical behavior were enormous, but often they hit those least guilty of offense. Those who were able, simply faded into the ether avoiding all the obligations they incurred, returned to their country of origin, went underground someplace and left others who behaved more responsibly, to pay their debts. They simply refused to be responsible for the errors of their ways and that applies to the originators of the schemes and those that took advantage of them.
The debacle continues because once started a culture of takers is not easily dissuaded from taking more, even when the consequences are dire; rather than blaming themselves, they blame others; rather than taking responsibility, they pass it on to other’s shoulders, others who should not be picking up their freight. Unions bled the public with their demands, and once achieved, the culture perpetuated even more abuses as various unions competed for benefits.
When Lewis describes, Iceland, Italy, and California (a state that has taken on the qualities of a country, in its failings), and the PIGS, the countries most involved in the scandals; Portugal, Italy, Greece and Spain and then puts Germany in as the lynchpin, the only country still with a stockpile of actual gold (it is the country that basically will bail out Europe, alone, if willing), he does it with such simplicity and humor, the reader will gasp and have to suspend disbelief at his revelations. Californians still want more of the same, a nanny state, benefits without cost, Greece and the Greeks refuse to abide by the rules imposed, refusing to pay their taxes, so the resolution of the crisis is still up in the air, and on ad infinitum. Although they do not want to adjust their lives or work to pay for their mistakes, the Greeks fully expect the Germans to do it for them because they are frugal and orderly; however, in their own country, they too aided in the execution of the financial debacle by investing in other countries that were running amok. Everyone involved wanted to make a quick buck off the back of some rube!
At the core of many of the financial failures are US bankers, Goldman Sachs, Merrill Lynch, Lehman Bros, Citibank. They brought down the financial world with the schemes they all learned to create in the hallowed halls of Yale, Harvard, etc., in the most esteemed educational institutions of the world, because they learned that greed rules!
Lewis describes a world of finance in which the players make a mockery of reality. The disaster was a monumental Ponzi scheme that even when recognized was allowed to proliferate and continue until it brought down the economies of major countries. He does it with such a light hand using layman’s terms so that the reader will want to laugh at his presentation; they might also want to cry at the truth of all his pen has put to paper. Can we all be such fools and are we all blinded so by greed that we will believe anything told by even the most inexperienced charlatans, simply because of the chance to get rich? Almost half way through the book Lewis uses this quote by Isocrates:
“Democracy destroys itself because it abuses its right to freedom and equality. Because it teaches its citizens to consider audacity as a right, lawlessness as a freedom, abrasive speech as equality, and anarchy as progress.”
In the end, will chaos be the result if the environment ceases to self-regulate causing the situation to spin further out of control?
Lewis adequately describes the inability to place blame on the shoulders of those who engineered this crisis. Stupid people blame those who outsmarted them, the mortgage brokers are blamed by the mortgagees. None of them read the fine print or felt responsible for their own choices, none felt the need to pay back or borrow only what they could afford or grant loans only to those qualified. Who is to blame, the fool who was taken in or the person who took them in, perhaps without malice, but who underestimated how low a human could go to get something they didn’t deserve and then actually complain when they were asked to repay their debt? They all pretended to be victims, not the perpetrators of the crime. Governments, in collusion with the financial industry and simple human beings, all played dumb and looked for scapegoats rather than look to themselves for their own practice of madness. The one truth is that there were no innocents. Everyone who took part was guilty in one form or another but most people who are paying for their poor judgment are not the guilty ones, they are the ones who could not be heard when they rang the alarm bells. In this Ponzi scheme, like Madoff’s, the get rich-schemers of all stripes and in all countries, only succeeded because governments and the people allowed them to succeed. If common sense and cooler heads prevailed, it could have been avoided. It was a failure of government, regulators, and human beings, en masse. They had short term vision and short term goals. In the long term, they failed.
Michael Lewis has succinctly described and analyzed the personality and culture of the parties involved in this enormous financial scandal, fraught with fraud and immorality and he has done it in a highly readable fashion! In short, he sums it up with amusing anecdotes of “people taking what they could, because they could, without regard for social consequences”. Eventually, it is hoped that the situation will have to correct itself through attrition.