The Independent Market Observer

1/3/14 – Looking Back at Europe: A Review of Boomerang by Michael Lewis

Posted by Brad McMillan, CFA, CAIA, MAI

Find me on:

This entry was posted on Jan 3, 2014 8:22:42 AM

and tagged On My Bookshelf

Leave a comment

In the past couple of days, I’ve mentioned that things are improving in the world economy, but we still face risks. One of the best ways to get a handle on these risks is to understand where we came from, what has changed, and what has not.

As part of that, I have been reading or rereading books about the crisis, with a particular focus on those that look at bigger-picture issues rather than the play-by-play. One of the easiest to read in this category, and in many respects the most entertaining, is Boomerang: Travels in the New Third World by Michael Lewis.

Before I get too far into this, note that you can buy the book here, or you can read the components for free on Vanity Fair’s website. The book is a compilation of pieces on the countries most affected by the global financial crisis: Iceland, Ireland, Germany, and, of course, the U.S. The form defines the function; it’s fairly brief and entertaining, with an eye for the telling detail, more interested in the social aspects than the technical.

That said, Boomerang was a valuable book for someone who’s been primarily focused on the economics of the European system. I’ve noted before (and based my contention that the euro would survive on the premise) that the euro was ultimately a political—that is, social—construct rather than an economic one. Lewis’s book examines, in a rather flip way, the societies and people that define that political construct. Societies are the foundation of politics, and Lewis attempts to derive the causes of the crisis from some basic characteristics that he sees in the different European societies.

You could easily dismiss this as pop psychology, and it often has that feel. But Lewis succeeds in making connections between the pop psych and what actually happened, leading the reader to consider how those connections will play out in the future. In my opinion, writing from several years later, the context adds value, not only at the time but looking forward. Reading the commentary about Greece, for example, and seeing how the situation has evolved, you can’t help but think Lewis made some good points, and the same applies to Ireland.

If the book were less entertaining, or a more difficult read, I would have a harder time recommending it. But Boomerang is a great read, and one that, thanks to its article-size, standalone components, is easy to pick up and put down. Too substantive to be a guilty pleasure, the book nevertheless tickles that spot while providing perspective and context that American readers don’t often get. As a way of looking backward to better understand future events, the bigger-picture nature of the commentary is also a benefit. The details of five years ago are now less important, but the societies remain.

I am a fan of Mr. Lewis. What he does, he does extremely well, and he brings a sense of the absurd that’s often lacking in reporting on economic matters. If I had to name a similar writer, I’d say P.J. O’Rourke, who also tends to focus on unintentional political/economic comedies of manners. Lewis, however, is a more serious writer, less intent on playing for laughs but certainly not averse to letting readers see them when they’re there. As we try to see forward, this is a valuable trait.


Subscribe via Email

Crash-Test Investing
New call-to-action

Hot Topics

New Call-to-action



see all



The information on this website is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.

The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly in an index.

The MSCI EAFE (Europe, Australia, Far East) Index is a free float‐adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada. The MSCI EAFE Index consists of 21 developed market country indices.

One basis point (bp) is equal to 1/100th of 1 percent, or 0.01 percent.

Third-party links are provided to you as a courtesy. We make no representation as to the completeness or accuracy of information provided on these websites. Information on such sites, including third-party links contained within, should not be construed as an endorsement or adoption by Commonwealth of any kind. You should consult with a financial advisor regarding your specific situation.


Please review our Terms of Use

Commonwealth Financial Network®