Recently finished Michael Lewis’ Boomerang. It is a bit disappointing (compared to his other works) and slightly dated. But it is still a valuable read for Americans who might be unconcerned about the fiscal problems we in the US face. Although our situation is different in important ways, the European problem is a canary in a coal mine and Lewis gives us some sense of what was going on over there (and in that other foreign country, California) before and during the crisis. And the Irish case shows how governments can exacerbate market problems such that one should think seriously about whether the solutions to market failures are really worse than the disease.
Lewis is an unabashed believer in the importance of culture (and gender) in explaining political and economic outcomes. He is the anti-Acemoglu and Robinson. Unfortunately, at times this leads Lewis into saying things that would be considered extremely politically incorrect were he not talking about Icelanders (for example, he compares their language to “orc shrieks” while arguing that the Icelandic people have “a feral streak in them”).
But here is an interesting – and for many a likely disturbing – point about the Euro and the European crisis:
At the bottom of this unholy mess, from the point of view of the German Finance Ministry, is the unwillingness, or inability, of the Greeks to change their behavior. That was what the currency union always implied: entire peoples had to change their way of life. Conceived as a tool for integrating Germany with Europe, and preventing the Germans from dominating others, the euro had become the opposite. For better or worse, the Germans now control the financial fate of Europe. If the rest of Europe was to continue to enjoy the benefits of what was essentially a German currency they’d need to become more German. And so, once again, all sorts of people who would rather not think about what it means to be “German” are compelled to do so.