COMM 337: A new Michael Lewis review, another not-very-cheery economic forecast ... and a "cute" antidote for reading too much political news

There's a new review of Michael Lewis' book "Boomerang" in the New York Review of Books. It's by John Lanchester, an Englishman who has also written a book about the current economic crisis, and I think it's important.

First, a word or two about Lanchester. He's a novelist-turned-journalist who wrote a 2010 book titled "I.O.U.: Why Everyone Owes Everyone and No One Can Pay." (The title was even better in the U.K. It was: "Whoops! Why Everyone Owes Everyone and No One Can Pay.") In a style the New York Times describes as "literate" and "wickedly funny," he covers much the same ground as Lewis.

Lanchester liked Lewis' style of writing, which can also be wickedly funny, although he questioned his "society-wide generalizations" about Germany. And he came to remarkably similar conclusions:

One of the lasting feelings I took away from my own experiences of “financial disaster tourism,” as Lewis calls it, was one of sadness. I went to the same countries and met different people who told very similar stories. It is easy to diagnose a basic failure of responsibility as one of the causes of the debt crisis; and there’s no denying that such failures took place on the widest imaginable scale, from individuals up to governments.

But then he goes on to make a point that Lewis hinted at but didn't develop very far:

I think, though, that the failure of responsibility was linked to a failure of agency—the individual’s ability to affect the course of events. An enormous number of people today feel as if they have very little economic agency in their own lives: often, they are right to feel that. The decisions that affect their fates are taken far above their heads, and often aren’t conscious decisions at all, so much as they are the operation of large economic forces over which they have no control—impersonal forces whose effects are felt in directly personal ways.

It is difficult to feel responsible when you have no agency. Many of the people who did stupid things ... did so because everyone around them was doing them too, and because loud voices were telling them to carry on. The Icelanders who bought cars with foreign currency loans were sold them by financiers who promised that it was a good idea; the Irish who bought now-unsellable houses on empty estates were told, by builders and bankers and the state, that this was a once-in-a-generation opportunity; the Greeks who are, at the time of writing, furiously rebelling against austerity measures were falsely told that the state could afford to look after them, and arranged their lives accordingly.

The collective momentum of a culture is, for more or less everybody more or less all of the time, overwhelming. This is especially true for anything to do with economics. The evidence is clear: it is easy to mislead people about money, and easy to lead members of the public astray both individually and en masse, because when it comes to money, most of us, most of the time, don’t know what we’re doing. The corollary is also clear: the whole Western world misled itself over debt, and the road back from where we are goes only uphill.

As Lanchester says, Lewis' is "a sad book, as well as a vivid and funny and enlightening one." And Lanchester's review is sad and vivid, funny and enlightening at the same time.

In Sept. 8 issue of the London Review of Books, Lanchester wrote an article on the global economy titled "The Non-Scenic Route to the Place We're Going Anway." It was just after the U.S. House Republican caucus rejected a deficit reduction compromise and the U.S. debt rating was downgraded, and Lanchester thought government inaction it would further weaken the economic conditions in the European Union as well:

It is this failure of political will both in the EU and US which is starting to make the contemporary economic scene resemble that of the 1930s. The discipline of macro-economics was born out of the study of the Great Depression, in an attempt to understand what had happened and avoid a repetition. That’s why it’s so depressing to see the developed world not just sleepwalking towards another recession, but actively embracing policies which make it more likely. Governments can’t all simultaneously cut spending while also continuing to grow their economies: it just defies common sense to think they can. The problem is in large part to do with the application of an incorrect metaphor, the easy-to-understand idea that a household has to live within its income. But governments are not households, and the idea of cutting your way to prosperity cannot be read across from an individual’s finances to those of the state. It’s a manifest fact that these policies, and the refusal to embrace stimulus spending, are causing economic slowdowns all over the world that are triggering the current anxiety in the markets, which is in turn causing the predicament of governments to intensify, as confidence sinks and the self-fulfilling expectations of a second downturn take hold. This in turn puts pressure on expectations about governments’ abilities to repay their debts, which further lowers confidence, and so on.

Fair enough. But, remember: Lanchester is writing an opinion piece, and his opinion is grounded in a particular economic theory that says government spending jump-started the economy out of the Great Depression. Other financial journalists think cuts in government spending are the best way to create jobs and get the economy booming in the 21st century. Fox News, for example, gives air time to literally dozens of them.

At any rate, Lanchester's prediction for the future in Europe and the U.S. alike is pretty much the same as Lewis' - a decade of hard times while "debts are paid down, the economy is slowly and miserably rebalanced, and eventually things grow back to where they were when the bubble burst." As he said not once but a couple of times in his review of Lewis' book, it's a sad story.

So here's what I do when I've overdosed on sad stories. In my line of work, which involves reading a lot of political - and economic - journalism, it's an occupational hazard. So if I get too much of them, I go to a website called Cute Overload that features adorable kittens, puppies, bunny rabbits, any little critters that leave you barfing rainbows and otherwise forgetting about the problems of the world for a moment. You may already know about it. If you don't, it can be a great mood lifter.

The following Public Service Anouncement for Cats, narrated in the first person by on-air talent with the best radio voice I've ever heard from a cat, is on YouTube. It's put up on the Shelter Pet Project channel. Their blurb:

The Shelter Pet Project is a public service ad campaign focused on
spreading the word that pets in shelters are wonderful and lovable,
and encouraging potential adopters to consider the shelter as the
first place to find a new best friend.

Visit http://theshelterpetproject.org/ to search for available shelter pets in your area and learn more about shelter pet adoption.