(c)2010 F. Bruce Abel
It's the Woody Allen (response to Christopher Walken) quote that I like so much:
http://www.nytimes.com/2010/01/06/books/excerpt-iou.html
Here's the excerpt:
Annie Hall is a film with many great moments, and for me the best of them is the movie's single scene with Annie's younger brother, Duane Hall, played by Christopher Walken, the first of his long, brilliant career of cinema weirdos. Visiting the Hall family home, Alvy Singer — that's Woody Allen — bumps into Duane, who immediately shares a fantasy:
"Sometimes when I'm driving . . . on the road at night . . . I see two headlights coming toward me. Fast. I have this sudden impulse to turn the wheel quickly, head-on into the oncoming car. I can anticipate the explosion. The sound of shattering glass. The . . . flames rising out of the flowing gasoline."
It's Alvy's reply which makes the scene: "Right. Well, I have to — I have to go now, Duane, because I, I'm due back on the planet Earth."
I've never shared Duane Hall's wish to turn across the road into the oncoming headlights. I have to admit, though, that I have sometimes had a not-too-distant thought. It's a thought which never hits me in town, or in traffic, or when there's anyone else in the car, but when I'm on my own in the country, zooming down an empty road, with the radio on, and everything is moving free and clear, as it hardly ever is with today's traffic, but when it is, I sometimes have a fleeting thought, one I've never acted on and hope I never will. The thought is this: what would happen if I chose this moment to put the car into reverse?
When you ask car buffs that, the first thing they do is to give you a funny look. Then they give you another funny look. Then they explain that what would happen is that the car's engine would basically explode: bits of it would burst through other bits, rods would fly through the air, the carburetor would burst into fragments, there would be incredible noise and smell and smoke, and you would swerve off the road and crash with the certainty of serious injury and the high probability of death. These explanations are sufficiently convincing that I find that the thought of putting the car into reverse flits across my mind only very temporarily, for about half a second at a time, say once every two or three years. I'm sure it's something I'll never do.
For the first years of the new millennium, the whole planet was zooming along, doing the equivalent of seventy on a clear road on a sunny day. Between 2000 and 2006, public discourse in the Western world was dominated by the election of George W. Bush, the attacks of 9/11, the "global war on terror" and the wars in Afghanistan and Iraq. But while all that was happening, something momentous was taking place, not quite unnoticed but with bizarrely little notice: the world's wealth was almost doubling. In 2000, the total GDP of Earth — the sum total of all the economic activity on the planet — was $36 trillion. By the end of 2006, it was $70 trillion. In the developed world, so much attention was given to the bust in dot-com shares in 2000 — "the greatest destruction of capital in the history of the world," as it was called at the time — that no one noticed the way the Western economies bounced back. The stock market was relatively stagnant, for reasons I'll go into later, but other sectors of the economy were booming. So was the rest of the planet. An editorial in The Economist in 1999 pointed out that the price of oil was now down to $10 a barrel, and issued a solemn warning: it might not stay there: there were reasons for thinking the price of oil might go to $5 a barrel. Ha!
By July 2008 the price of oil had risen to $147.70 a barrel, and as a result the oil-producing countries were awash with cash. From the Arab world to Russia to Venezuela, the treasury departments of all oil-producing countries resembled the scene in The Simpsons in which Monty Burns and his assistant, Smithers, pick up wads of cash and throw them at each other while shouting "Money fight!" The demand for oil was so avid because large sections of the developing world, especially India and China, were undergoing unprecedented levels of economic growth. Both countries suddenly had a hugely expanding, highly consuming new middle class. China's GDP was averaging growth of 10.8 percent a year, India's 8.9 percent. In fifteen years, India's middle class, using a broad definition of the term meaning the section of the population who had escaped from poverty, grew from 147 million to 264 million; China's went from 174 million to 806 million, arguably the greatest economic achievement anywhere on Earth, ever. Chinese personal income grew by 6.6 percent a year from 1978 to 2004, four times as fast as the world average. Thirty million Chinese children are taking piano lessons. Two-fifths of all Indian secondary school boys have regular after-school tuition. When you have two and a quarter billion people living in countries whose economies are booming in that way, you are living on a planet with a whole new economic outlook. Hundreds of millions of people are measurably richer and have new expectations to match. So oil is up, manufacturing is up, the price of commodities — the stuff which goes to make stuff — is up, the economy of (almost) the entire planet is booming. Who knows, optimists think, with the global economy growing at this rate, we can perhaps begin to think seriously about meeting the United Nations' Millennium Development goals, such as halving the number of hungry people, and of people whose income is less than $1 a day, by 2015.1 That seemed utopian at the time the goals were set, but with the world $34 trillion richer, it suddenly looked as if this unprecedented target might be achieved.
1
2 Next Page »
Showing posts with label john lanchester. Show all posts
Showing posts with label john lanchester. Show all posts
Tuesday, March 2, 2010
Sunday, January 31, 2010
Wonderful Sports Stories
(c) 2010 F. Bruce Abel
It feels like we're in the Dead of Winter all right!
A year ago we were in hot and humid Manila with dear Genny. But today...
Wonderful sports stories in today's Sunday New York Times, on this frigid Sunday.
Among them, stories elicited by Willie Mays;
The life of a basketball journeyman named Moom now playing for the Cavaliers;
Baron, the coach of Rhode Island, and formerly St. Bonaventure.
And I'm going to re-read "I.O.U." a wonderfully posited book on our financial troubles.
Even the Cincinnati Enquirer outdid itself today with a tear-out section on Duke Energy's Smart Grid doings. I hope to be the first to try it (I'm the first to apply, they told me).
It feels like we're in the Dead of Winter all right!
A year ago we were in hot and humid Manila with dear Genny. But today...
Wonderful sports stories in today's Sunday New York Times, on this frigid Sunday.
Among them, stories elicited by Willie Mays;
The life of a basketball journeyman named Moom now playing for the Cavaliers;
Baron, the coach of Rhode Island, and formerly St. Bonaventure.
And I'm going to re-read "I.O.U." a wonderfully posited book on our financial troubles.
Even the Cincinnati Enquirer outdid itself today with a tear-out section on Duke Energy's Smart Grid doings. I hope to be the first to try it (I'm the first to apply, they told me).
Saturday, January 30, 2010
"I.O.U." -- Reviews on Amazon
(c) 2010 F. Bruce Abel
Let's go deep on this:
From The Washington Post
From The Washington Post's Book World/washingtonpost.com Reviewed by Dennis Drabelle drabelled@washpost.com British journalist and novelist John Lanchester's gift is to see the big picture in new ways. Much of our current plight, he argues, comes from lack of competition in the broadest possible sense. The end of the Cold War left the United States, in his view, with no countervailing ideological force to worry about. "One of the most vivid consequences was the abolition of the ban on torture, which had previously been a defining characteristic of the democratic world's self-definition." But with no conflicting worldview to which the United States needed to feel superior, a big reason not to torture was swept off the board. "The same goes for the way in which the financial sector was allowed to run out of control," Lanchester adds. With capitalism "unchallenged as the world's dominant political-economic system . . . it could have been predicted that the financial sector . . . was in a position to reward itself with a disproportionate piece of the economic pie. There was no global antagonist to point at and jeer at the rise in the number and size of the fat cats; there was no embarrassment about allowing the rich to get so much richer so very quickly." As for the bust-bailout syndrome that has afflicted the United States and other economies, Lanchester sums it up in a phrase that could almost be a poetic couplet: "a huge, unregulated boom in which almost all the upside went directly into private hands, followed by a gigantic bust in which the losses were socialized." Copyright 2010, The Washington Post. All Rights Reserved.
Review
"Warning to bankers everywhere in the world. You better buy every single copy of I.O.U. because Lanchester's painted the target on you that the rest of us so desperately wanted to see. My prediction: bankers may be an endangered species once I.O.U. gets out, and from this read, I can tell you, while I hate to rush Darwin, it can't happen fast enough." -- James J. Cramer, host of CNBC's Mad Money and author of Jim Cramer's Getting Back to Even"I.O.U. is the map to the crazed world of contemporary finance we have all been waiting for. John Lanchester's superb book is everything its subject, the 2008 crash, was not: namely lucid, beautifully contrived, comprehensible to the reader with no specialist knowledge -- and most of all devastatingly funny. I urge you to read it." -- Will Self, author of Liver
See all Editorial Reviews
Let's go deep on this:
From The Washington Post
From The Washington Post's Book World/washingtonpost.com Reviewed by Dennis Drabelle drabelled@washpost.com British journalist and novelist John Lanchester's gift is to see the big picture in new ways. Much of our current plight, he argues, comes from lack of competition in the broadest possible sense. The end of the Cold War left the United States, in his view, with no countervailing ideological force to worry about. "One of the most vivid consequences was the abolition of the ban on torture, which had previously been a defining characteristic of the democratic world's self-definition." But with no conflicting worldview to which the United States needed to feel superior, a big reason not to torture was swept off the board. "The same goes for the way in which the financial sector was allowed to run out of control," Lanchester adds. With capitalism "unchallenged as the world's dominant political-economic system . . . it could have been predicted that the financial sector . . . was in a position to reward itself with a disproportionate piece of the economic pie. There was no global antagonist to point at and jeer at the rise in the number and size of the fat cats; there was no embarrassment about allowing the rich to get so much richer so very quickly." As for the bust-bailout syndrome that has afflicted the United States and other economies, Lanchester sums it up in a phrase that could almost be a poetic couplet: "a huge, unregulated boom in which almost all the upside went directly into private hands, followed by a gigantic bust in which the losses were socialized." Copyright 2010, The Washington Post. All Rights Reserved.
Review
"Warning to bankers everywhere in the world. You better buy every single copy of I.O.U. because Lanchester's painted the target on you that the rest of us so desperately wanted to see. My prediction: bankers may be an endangered species once I.O.U. gets out, and from this read, I can tell you, while I hate to rush Darwin, it can't happen fast enough." -- James J. Cramer, host of CNBC's Mad Money and author of Jim Cramer's Getting Back to Even"I.O.U. is the map to the crazed world of contemporary finance we have all been waiting for. John Lanchester's superb book is everything its subject, the 2008 crash, was not: namely lucid, beautifully contrived, comprehensible to the reader with no specialist knowledge -- and most of all devastatingly funny. I urge you to read it." -- Will Self, author of Liver
See all Editorial Reviews
"I.O.U." -- Excerpt
Excerpt
‘I.O.U.’
By JOHN LANCHESTER
Published: January 5, 2010
Introduction
Skip to next paragraph
Related
'I.O.U.,' by John Lanchester: Laughing All the Way to the Bank (January 6, 2010)
Annie Hall is a film with many great moments, and for me the best of them is the movie's single scene with Annie's younger brother, Duane Hall, played by Christopher Walken, the first of his long, brilliant career of cinema weirdos. Visiting the Hall family home, Alvy Singer — that's Woody Allen — bumps into Duane, who immediately shares a fantasy:
"Sometimes when I'm driving . . . on the road at night . . . I see two headlights coming toward me. Fast. I have this sudden impulse to turn the wheel quickly, head-on into the oncoming car. I can anticipate the explosion. The sound of shattering glass. The . . . flames rising out of the flowing gasoline."
It's Alvy's reply which makes the scene: "Right. Well, I have to — I have to go now, Duane, because I, I'm due back on the planet Earth."
I've never shared Duane Hall's wish to turn across the road into the oncoming headlights. I have to admit, though, that I have sometimes had a not-too-distant thought. It's a thought which never hits me in town, or in traffic, or when there's anyone else in the car, but when I'm on my own in the country, zooming down an empty road, with the radio on, and everything is moving free and clear, as it hardly ever is with today's traffic, but when it is, I sometimes have a fleeting thought, one I've never acted on and hope I never will. The thought is this: what would happen if I chose this moment to put the car into reverse?
When you ask car buffs that, the first thing they do is to give you a funny look. Then they give you another funny look. Then they explain that what would happen is that the car's engine would basically explode: bits of it would burst through other bits, rods would fly through the air, the carburetor would burst into fragments, there would be incredible noise and smell and smoke, and you would swerve off the road and crash with the certainty of serious injury and the high probability of death. These explanations are sufficiently convincing that I find that the thought of putting the car into reverse flits across my mind only very temporarily, for about half a second at a time, say once every two or three years. I'm sure it's something I'll never do.
For the first years of the new millennium, the whole planet was zooming along, doing the equivalent of seventy on a clear road on a sunny day. Between 2000 and 2006, public discourse in the Western world was dominated by the election of George W. Bush, the attacks of 9/11, the "global war on terror" and the wars in Afghanistan and Iraq. But while all that was happening, something momentous was taking place, not quite unnoticed but with bizarrely little notice: the world's wealth was almost doubling. In 2000, the total GDP of Earth — the sum total of all the economic activity on the planet — was $36 trillion. By the end of 2006, it was $70 trillion. In the developed world, so much attention was given to the bust in dot-com shares in 2000 — "the greatest destruction of capital in the history of the world," as it was called at the time — that no one noticed the way the Western economies bounced back. The stock market was relatively stagnant, for reasons I'll go into later, but other sectors of the economy were booming. So was the rest of the planet. An editorial in The Economist in 1999 pointed out that the price of oil was now down to $10 a barrel, and issued a solemn warning: it might not stay there: there were reasons for thinking the price of oil might go to $5 a barrel. Ha!
By July 2008 the price of oil had risen to $147.70 a barrel, and as a result the oil-producing countries were awash with cash. From the Arab world to Russia to Venezuela, the treasury departments of all oil-producing countries resembled the scene in The Simpsons in which Monty Burns and his assistant, Smithers, pick up wads of cash and throw them at each other while shouting "Money fight!" The demand for oil was so avid because large sections of the developing world, especially India and China, were undergoing unprecedented levels of economic growth. Both countries suddenly had a hugely expanding, highly consuming new middle class. China's GDP was averaging growth of 10.8 percent a year, India's 8.9 percent. In fifteen years, India's middle class, using a broad definition of the term meaning the section of the population who had escaped from poverty, grew from 147 million to 264 million; China's went from 174 million to 806 million, arguably the greatest economic achievement anywhere on Earth, ever. Chinese personal income grew by 6.6 percent a year from 1978 to 2004, four times as fast as the world average. Thirty million Chinese children are taking piano lessons. Two-fifths of all Indian secondary school boys have regular after-school tuition. When you have two and a quarter billion people living in countries whose economies are booming in that way, you are living on a planet with a whole new economic outlook. Hundreds of millions of people are measurably richer and have new expectations to match. So oil is up, manufacturing is up, the price of commodities — the stuff which goes to make stuff — is up, the economy of (almost) the entire planet is booming. Who knows, optimists think, with the global economy growing at this rate, we can perhaps begin to think seriously about meeting the United Nations' Millennium Development goals, such as halving the number of hungry people, and of people whose income is less than $1 a day, by 2015.1 That seemed utopian at the time the goals were set, but with the world $34 trillion richer, it suddenly looked as if this unprecedented target might be achieved.
1
2 Next Page »
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Friday, January 29, 2010
"IOU" -- Read It!
(c) 2010 F. Bruce Abel
As this review says, this is good! And I am finding it so. Thank you John Lanchester.
Books of The Times
Laughing All the Way to the Bank
By DWIGHT GARNER
Published: January 5, 2010
If you wanted to try to make sense of the global banking crisis, instead of merely weeping openly at your A.T.M. balance, 2009 was a very good year. Bookstores were filled with volumes that, with expert 20-20 hindsight, explained how capitalism went to hell. The blame was spread around: to politicians (for deregulating financial markets), to bankers (for gambling with exotic derivatives they barely understood) and to the rest of us (for living beyond our means, like insatiate zombie piglets).
Skip to next paragraph
Steven Puetzer/Masterfile
John Lanchester
I.O.U.
Why Everyone Owes Everyone and No One Can Pay
By John Lanchester
260 pages. Simon & Schuster. $25.
Related
Excerpt: ‘I.O.U.’ (January 6, 2010)
Times Topics: Credit Crisis — The Essentials
This nightmare isn’t over. We’ll be living with the fallout from the banking crisis for decades and devouring plenty more books about it too. The whole episode is a kind of intellectual and moral Superfund site, an oozing gift that will keep giving. But here’s a prediction: Few if any of these books will be as pleasurable — and by that I mean as literate or as wickedly funny — as John Lanchester’s “I.O.U.: Why Everyone Owes Everyone and No One Can Pay.”
Mr. Lanchester, who is British, isn’t an economist or a business journalist. He’s a novelist (and a talented one; try “The Debt to Pleasure”), a man with no special financial expertise whatsoever. A few years ago he began following the financial meltdown for research purposes, as background for a novel he was writing. He soon realized, he says, “that I had stumbled across the most interesting story I’ve ever found.”
It’s a story that begins, as these stories are wont to do, with the fall of the Berlin Wall. The capitalist West won its “ideological beauty contest” with the communist East, Mr. Lanchester writes, which was good news except for this: Suddenly “there was no global antagonist to point at and jeer at the rise in the number and size of the fat cats; there was no embarrassment about allowing the rich to get so much richer so very quickly.”
Once upon a time in America and Britain, he observes, “the jet engine of capitalism was harnessed to the ox cart of social justice, to much bleating from the advocates of pure capitalism, but with the effect that the Western liberal democracies became the most admired societies that the world had ever seen.”
Then the Wall crumbled, and “the jet engine was unhooked from the ox cart and allowed to roar off at its own speed. The result was an unprecedented boom, which had two big things wrong with it: It wasn’t fair, and it wasn’t sustainable.”
The snidest villains and the greediest buffoons in the narrative are the bankers and other financial wizards who began recklessly playing with new, risky, little-understood tools to get richer faster — tools that ostensibly hedge against risk but also dramatically increase it. If you don’t know how derivatives or credit default swaps work, or what securitization is, or why futures are riskier than options, this is a book for you. Mr. Lanchester explains these things methodically, with mathematical rigor, but he is also, crucially, guided as much by perception and feel.
“We are a long, long way from a single quote for next season’s wheat crop,” he notes. “The contemporary derivative is likely to involve a mix of options, futures, currencies and debt, structured and priced in ways which are the closest extant thing to rocket science. Mathematics Ph.D.’s are all over the place in this business.”
Mr. Lanchester finds loads of bleak humor here. “Warren Buffett was doubly right to compare the new financial products to ‘weapons of mass destruction’ — first, because they are lethal, and, second, because no one knows how to track them down,” he writes.
He also compares the banking crisis to the birth of postmodernism. “For anyone who studied literature in college in the past few decades, there is a weird familiarity about the current crisis,” he says. “Value, in the realm of finance capital, parallels the elusive nature of meaning in deconstructionism.”
“I.O.U.” crosses over into black satire when Mr. Lanchester describes how bankers used their new tools to make money from poor people, the worst credit risks, by prying their cash loose through predatory lending, then pooling this money and selling it off. Who cared if these people defaulted on their mortgages? The risk had already been passed along to others, and ultimately, when banks failed, to taxpayers. Mr. Lanchester calls this “a 100 percent pure form of socialism for the rich.”
With steam shooting from his ears, he summarizes: “So: a huge, unregulated boom in which almost all the upside went directly into private hands, followed by a gigantic bust in which the losses were socialized. That is literally nobody’s idea of how the world is supposed to work.”
Mr. Lanchester’s history lesson is peppered with dead-on references to everything, including “Annie Hall,” “The Simpsons,” “The Wire,” Hemingway and Jacques Derrida. He is effortlessly epigrammatical. (“In a sense, credit isn’t just an aspect of the economy, it is the economy.”)
His wit pops out at unexpected angles. About the ever-riskier wagers bankers were making, he writes: “This wasn’t just looking for trouble, it was sending trouble a ‘save the date’ card, followed by a formal invitation, followed by nagging e-mails and phone calls just to make absolutely sure.”
He also lays out a wide series of necessary reforms, including requiring banks to keep more capital on hand and separating investment banking from everyday banking (“the casino” from “the piggy bank”).
These reforms include personal ones, aimed at me and at you. Do we need so much stuff in our lives? he asks. “In a world running out of resources, the most important ethical, political and ecological idea can be summed up in one simple word: ‘enough.’ ”
Mr. Lanchester is no admirer of George W. Bush, but he does enjoy citing Mr. Bush’s comment in late 2008 about the worsening economy: “This sucker could go down.” Mr. Lanchester, in 2010, isn’t quite that pessimistic. But he does note that we’re all about to get the bill from the financial bailouts, a bill that could easily top $4.6 trillion.
How much money is that, anyway? Brace yourself. That number, Mr. Lanchester writes, paraphrasing one expert, “is bigger than the Marshall Plan, the Louisiana Purchase, the Apollo moon landings, the 1980s savings and loan crisis, the Korean War and the total cost of NASA’s space flights, all added together — repeat, added together (and yes, the old figures are adjusted upward for inflation).”
Before you begin to cry, pick up a copy of “I.O.U.” Good humor and good company will be the things that’ll get us through.
As this review says, this is good! And I am finding it so. Thank you John Lanchester.
Books of The Times
Laughing All the Way to the Bank
By DWIGHT GARNER
Published: January 5, 2010
If you wanted to try to make sense of the global banking crisis, instead of merely weeping openly at your A.T.M. balance, 2009 was a very good year. Bookstores were filled with volumes that, with expert 20-20 hindsight, explained how capitalism went to hell. The blame was spread around: to politicians (for deregulating financial markets), to bankers (for gambling with exotic derivatives they barely understood) and to the rest of us (for living beyond our means, like insatiate zombie piglets).
Skip to next paragraph
Steven Puetzer/Masterfile
John Lanchester
I.O.U.
Why Everyone Owes Everyone and No One Can Pay
By John Lanchester
260 pages. Simon & Schuster. $25.
Related
Excerpt: ‘I.O.U.’ (January 6, 2010)
Times Topics: Credit Crisis — The Essentials
This nightmare isn’t over. We’ll be living with the fallout from the banking crisis for decades and devouring plenty more books about it too. The whole episode is a kind of intellectual and moral Superfund site, an oozing gift that will keep giving. But here’s a prediction: Few if any of these books will be as pleasurable — and by that I mean as literate or as wickedly funny — as John Lanchester’s “I.O.U.: Why Everyone Owes Everyone and No One Can Pay.”
Mr. Lanchester, who is British, isn’t an economist or a business journalist. He’s a novelist (and a talented one; try “The Debt to Pleasure”), a man with no special financial expertise whatsoever. A few years ago he began following the financial meltdown for research purposes, as background for a novel he was writing. He soon realized, he says, “that I had stumbled across the most interesting story I’ve ever found.”
It’s a story that begins, as these stories are wont to do, with the fall of the Berlin Wall. The capitalist West won its “ideological beauty contest” with the communist East, Mr. Lanchester writes, which was good news except for this: Suddenly “there was no global antagonist to point at and jeer at the rise in the number and size of the fat cats; there was no embarrassment about allowing the rich to get so much richer so very quickly.”
Once upon a time in America and Britain, he observes, “the jet engine of capitalism was harnessed to the ox cart of social justice, to much bleating from the advocates of pure capitalism, but with the effect that the Western liberal democracies became the most admired societies that the world had ever seen.”
Then the Wall crumbled, and “the jet engine was unhooked from the ox cart and allowed to roar off at its own speed. The result was an unprecedented boom, which had two big things wrong with it: It wasn’t fair, and it wasn’t sustainable.”
The snidest villains and the greediest buffoons in the narrative are the bankers and other financial wizards who began recklessly playing with new, risky, little-understood tools to get richer faster — tools that ostensibly hedge against risk but also dramatically increase it. If you don’t know how derivatives or credit default swaps work, or what securitization is, or why futures are riskier than options, this is a book for you. Mr. Lanchester explains these things methodically, with mathematical rigor, but he is also, crucially, guided as much by perception and feel.
“We are a long, long way from a single quote for next season’s wheat crop,” he notes. “The contemporary derivative is likely to involve a mix of options, futures, currencies and debt, structured and priced in ways which are the closest extant thing to rocket science. Mathematics Ph.D.’s are all over the place in this business.”
Mr. Lanchester finds loads of bleak humor here. “Warren Buffett was doubly right to compare the new financial products to ‘weapons of mass destruction’ — first, because they are lethal, and, second, because no one knows how to track them down,” he writes.
He also compares the banking crisis to the birth of postmodernism. “For anyone who studied literature in college in the past few decades, there is a weird familiarity about the current crisis,” he says. “Value, in the realm of finance capital, parallels the elusive nature of meaning in deconstructionism.”
“I.O.U.” crosses over into black satire when Mr. Lanchester describes how bankers used their new tools to make money from poor people, the worst credit risks, by prying their cash loose through predatory lending, then pooling this money and selling it off. Who cared if these people defaulted on their mortgages? The risk had already been passed along to others, and ultimately, when banks failed, to taxpayers. Mr. Lanchester calls this “a 100 percent pure form of socialism for the rich.”
With steam shooting from his ears, he summarizes: “So: a huge, unregulated boom in which almost all the upside went directly into private hands, followed by a gigantic bust in which the losses were socialized. That is literally nobody’s idea of how the world is supposed to work.”
Mr. Lanchester’s history lesson is peppered with dead-on references to everything, including “Annie Hall,” “The Simpsons,” “The Wire,” Hemingway and Jacques Derrida. He is effortlessly epigrammatical. (“In a sense, credit isn’t just an aspect of the economy, it is the economy.”)
His wit pops out at unexpected angles. About the ever-riskier wagers bankers were making, he writes: “This wasn’t just looking for trouble, it was sending trouble a ‘save the date’ card, followed by a formal invitation, followed by nagging e-mails and phone calls just to make absolutely sure.”
He also lays out a wide series of necessary reforms, including requiring banks to keep more capital on hand and separating investment banking from everyday banking (“the casino” from “the piggy bank”).
These reforms include personal ones, aimed at me and at you. Do we need so much stuff in our lives? he asks. “In a world running out of resources, the most important ethical, political and ecological idea can be summed up in one simple word: ‘enough.’ ”
Mr. Lanchester is no admirer of George W. Bush, but he does enjoy citing Mr. Bush’s comment in late 2008 about the worsening economy: “This sucker could go down.” Mr. Lanchester, in 2010, isn’t quite that pessimistic. But he does note that we’re all about to get the bill from the financial bailouts, a bill that could easily top $4.6 trillion.
How much money is that, anyway? Brace yourself. That number, Mr. Lanchester writes, paraphrasing one expert, “is bigger than the Marshall Plan, the Louisiana Purchase, the Apollo moon landings, the 1980s savings and loan crisis, the Korean War and the total cost of NASA’s space flights, all added together — repeat, added together (and yes, the old figures are adjusted upward for inflation).”
Before you begin to cry, pick up a copy of “I.O.U.” Good humor and good company will be the things that’ll get us through.
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