The Mortgage Crisis of 2008 Makes Good Summer Reading

At least as the story is told my Michael Lewis.

English: , author of the best-sellers Moneybal...

(Photo credit: Wikipedia)

If the name doesn’t ring a clear bell, a couple of his books were turned into the movies  The Blind Side and Money Ball.    And sports haven’t even been his strong  suit.   Exploring the nature of financial folly has, beginning with his first book Liar’s Poker about his days as a bond trader on Wall Street in the late 1980s.

I just finished his book Boomerang:  Travels in the New Third World.  Here he details his travels through Europe after the financial crash that prompted our still lingering semi-recession and gives insights into what unfettered greed combined with the capacity for self-delusion can lead to,  a complete run amuck.

But while the story might have a moral, Lewis makes it all fun and interesting and often thought provoking in only a couple of hundred pages.   For one thing, when you read about the struggles in the European economies now, this book will help you keep perspective on how shaky that collective enterprise is.

Here is a NY Times review of the book which might entice you more.

A nice companion piece by Lewis is The Big Short:  Inside the Doomsday Machine.    It deals with the insights and huge financial success of a handful of financiers in the U. S. who saw where the wild fire of greed was heading and how they could make a lot of money betting against the tide.   Some of them even warned Wall Street, but their message “the king has no clothes” went mostly unheeded.   The Wall Streeters blocked it out;  the possibility was too painful to contemplate.

Here is a NY Times review of that book.

What is clear in reading both books is how right Shakespeare was when he wrote:   “What fools these mortals be.”

All we can do is limit our propensity to destroy ourselves by establishing institutions, laws and regulations that are enforced to constrain this tendency.

Or desentivise it.   What fueled the fire of the great mortgage meltdown was the “system” did just the opposite.  It unleashed greed and allowed risking the money of others while  remaining unaccountable for losses, as the Lewis books well illustrate.


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