Michael Lewis - Boomerang - Travels in the New Third World

This is particularly relevant to Paige Meyer because, two months ago, he became Vallejo’s new fire chief. It surprised him: he hadn’t even applied for the job. The city manager, Phil Batchelor, just called him to his office one day. “He didn’t ever really ask me if I wanted the job,” says Meyer. “He just asked how’s the family, told me he was giving me the job, and asked if I had any problem with that.”

He didn’t, actually. He sat down and made a list of ways to improve the department. He faced a fresh challenge: how to deliver service that was the same as before, or even better than before, with half the resources. How to cope with an environment of scarcity. He began to measure things that hadn’t been measured. The number one cause of death in firefighting was heart attacks. Number two was a truck crash. He was now in charge of a department that would be both overworked and in a hurry. Fewer people doing twice the work probably meant twice the number of injuries per firefighter. He’d decided to tailor fitness regimens to fit the job. With fewer fire stations and fewer firefighters in them, the response times were going to be slower. He’d need to find new ways to speed things up. A longer response time meant less room for error; a longer response time meant the fires they’d be fighting would be bigger. He had some thoughts about the most efficient way to fight these bigger fires. He began, in short, to rethink firefighting.

When people pile up debts they will find difficult and perhaps even impossible to repay, they are saying several things at once. They are obviously saying that they want more than they can immediately afford. They are saying, less obviously, that their present wants are so important that, to satisfy them, it is worth some future difficulty. But in making that bargain they are implying that when the future difficulty arrives, they’ll figure it out. They don’t always do that. But you can never rule out the possibility that they will. As idiotic as optimism can sometimes seem, it has a weird habit of paying off.

At the end of every book I write there always seem to be people who deserve more than to be thanked at the end of a book. This one is no different. Act II of the financial crisis was set in places it would never have occurred to me to go. I’d like to thank Graydon Carter and Doug Stumpf, at Vanity Fair , for encouraging me to go there, and Jaime Lalinde, for researching these places so well that I sometimes felt he, not I, should be writing about them. Theo Phanos offered me not only friendship and encouragement but the shrewd views of an interesting money manager, from start to finish. At W. W. Norton, Janet Byrne has appeared from nowhere to improve my prose and, to the extent it is possible for an editor to do this, save me from myself. Starling Lawrence remains my touchstone.

Copyright © 2011 by Michael Lewis

Grateful acknowledgment is made to Vanity Fair , where the pieces in this book appeared, in slightly different form:

“Wall Street on the Tundra,” April 2009; “Beware of Greeks Bearing Bonds,” October 2010; “When Irish Eyes Are Crying,” March 2011; “It’s the Economy, Dummkopf!,” September 2011; “Too Fat to Fly,” November 2011.

All rights reserved

Printed in the United States of America

First Edition

For information about permission to reproduce selections from this book,

write to Permissions, W. W. Norton & Company, Inc.,

500 Fifth Avenue, New York, NY 10110

For information about special discounts for bulk purchases, please contact

W. W. Norton Special Sales at specialsales@wwnorton.com or 800-233-4830

Manufacturing by Courier Westford

Book design by Chris Welch

Production manager: Anna Oler

Ebook Conversion: Kayci C. Wyatt, TIPS Technical Publishing

Library of Congress Cataloging-in-Publication Data

Lewis, Michael (Michael M.)

Boomerang : travels in the new Third World / Michael Lewis. — 1st ed.

p. cm.

ISBN 978-0-393-08181-7 (hardcover)

1. Global Financial Crisis, 2008–2009. 2. International finance. 3. Financial crises—United States—History—21st century. I. Title.

HB37172008 .L49 2011

330.9’0511—dc23

2011028241

Ebook ISBN: 978-0-393-08224-1

W. W. Norton & Company, Inc.

500 Fifth Avenue, New York, N.Y. 10110

www.wwnorton.com

W. W. Norton & Company Ltd.

Castle House, 75/76 Wells Street, London W1T 3QT

1234567890