The End of Growth: Adapting to Our New Economic Reality


The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg. New Society Publishers 2011.

Since World War II, economic thought has been dominated by Keynesian theory, developed by John Maynard Keynes, and neoliberal theory as espoused by Milton Friedman and others. Thatcher and Reagan both relied on advice from neoliberals and a nearly worldwide embrace of Friedman’s recommendations led predictably to increased inequality between the rich and the poor, and more frequent and severe economic bubbles and crashes.

Neoliberals believe that economic growth can best be promoted through a laissez-faire, government butt-out approach that assumes that the market always knows best. Keynesians believe economic growth is best achieved through appropriate government intervention as necessary. But both approaches share in common the belief that a sound economy is based on continuous, never-ending growth.

Growth ceased in the financial crash of 2008 that hit many nations. This is problematic for neoliberal thought, as the bank deregulation that neoliberals promote was central to the implosion of the financial system. However, government intervention in the form of stimulus packages and bail-outs has failed to return the economy to business-as-usual, confounding Keynesian theory.

In fact, the economy can perhaps be described as treading water, going nowhere fast. In newscasts, economic recovery is still being described as “fragile”.

Heinberg argues that the failure of the economy to rebound reflects a more fundamental problem than just the misdeeds associated with the 2008 crash. It is a reflection of the limits to growth.

It seems pretty obvious that, given a planet with a finite set of resources and space, infinite growth is simply not possible, yet there is a great deal of resistance to the reality of limits to growth. Here in Canada, the government invests taxpayer dollars in television campaigns that assure us all they are working hard on economic growth and all is well!

Oil is an obvious problem for continued growth. Peak oil doesn’t mean that there is no more oil, but that production is no longer increasing. The easiest to find, cheapest to produce oil has been used up. The United States uses more than 18,000,000 barrels of crude oil a day. It produces about half of that domestically, with recent increases in production resulting from new technologies for shale extraction. The rest, some 9 million barrels a day, is imported. Prime Minister Harper likes to promote Canada as a big producer, but the U.S. imports less than 3 million barrels a day from the Alberta tar sands. Even with major increases in tar sands production, that leaves a significant shortfall. The rest comes from sources around the globe.

But it’s not just oil that is peaking. It’s just about everything. World grain stocks, for example, peaked in 1986. Agriculture has become the single biggest source of impact on the planet, connected to soil salination (through irrigation), deforestation, loss of habitat and biodiversity, fresh water scarcity, pesticide proliferation, pollution of water and soil. Fertilizer use world wide increased 500% from 1960 to 2000, resulting in dead zones in the oceans from fertilizer runoff into rivers. Peak phosphorus production was reached in 1989. Does peak phosphorous mean peak food?

If economic growth requires further stimulus from governments, where will the money come from? Many countries and states are already on the brink of bankruptcy.

Heinberg provides a primer on economic theory and the status of continued growth as a viable reality. He considers arguments that rely on innovation, substitution and efficiency to keep the economy growing and finds them lacking. He looks at important issues such as the state of the rising Chinese economy, population stress and income inequity. Finally, Heinberg looks at the alternative to growth, a steady-state economy, and examines options beyond our current status quo. Many interesting projects such as Transition Towns and the Natural Step eco-municipality movement are already underway. Will it be too little, too late?

The End of Growth offers readers many interesting ideas and insights to ponder and is highly recommended. Richard Heinberg is a Fellow of the Post Carbon Institute. Don’t have time to read the book? There are a number of short videos available for viewing on Youtube featuring Richard Heinberg and/or the Post Carbon Institute. Here is a short, entertaining history of economic growth and where we are heading.

Posted in Non Fiction | Tagged , , , , , , , , , , , , , | 1 Comment

Damned Nations: Greed, Guns, Armies, & Aid


Damned Nations: Greed, Guns, Armies & Aid by Samantha Nutt, M.D. McClelland & Stewart 2011.

I often see bumper stickers on cars that read “Support Our Troops!” or “If you don’t stand behind our troops, feel free to stand in front of them.” Huh? Catchy, but what the heck is that supposed to mean? I don’t know of anyone who doesn’t “Support Our Troops”. But supporting a war is quite another matter.

For nearly 20 years, Dr. Samantha Nutt has worked in many of the world’s most violent hotspots, from Iraq and Somalia to the Congo (DRC). In Damned Nations she shares some of her experiences with readers and shines a light on circumstances that are almost impossible for the average viewer of the evening news to grasp.

In America, those who questioned the war in Iraq were branded Saddam Hussein sympathizers. If you’re not with us, you’re against us! But what are the costs of these wars? What is it like to be a civilian in a combat zone? Who are the casualties of war? In World War I, just 15% of the casualties were civilians. Now, 80% of casualties in wars are civilians. In the Shock and Awe campaign, 7,500 Iraqis died and almost 18,000 were injured.

War is big business. Annual world-wide military spending now exceeds $1.5 trillion dollars. That’s $225 for every person on the planet and the most rapidly expanding market for weapons is the developing world. The market price for an assault rifle in a war-torn country averages less than the cost of admission to an American theme park.

We became accustomed to thinking of Canada’s role in the world to be that of peacekeepers, but in fact, Canada is among the world’s top 10 arms exporters, with one of the lowest international Arms Transparency ratings among industrialized economies.
Who profits from these arms sales? Well, Canada’s teachers are among the beneficiaries. All but two provincial teachers’ pension funds are invested in one or more of the world’s top one hundred arms producers, while the Canada Pension Plan holds more than $200 million in investments in top arms-producing companies.

Instability in regions such as eastern Congo often benefits arms dealers, mining companies, smugglers, foreign governments and other profiteers. The DRC is blessed and cursed with deposits of gold, diamonds, tin, copper and coltan (needed for electronic equipment such as cell phones). When Congo gained independence from Belgium in 1960, its first democratically elected prime minister was deposed in a CIA-sponsored coup just 3 months later, allowing corrupt dictator Mobutu to take charge and amass a personal fortune while leaving the country in chaos.

All of the money that is currently poured into military operations could go a long way towards solving some of the problems at the root of unrest were it redirected. Nutt notes that in countries such as Afghanistan, extremist movements offer angry young men, with no hope for their future, money and a sense of belonging. The only way to abort such movements – to strip them of their platform and subsequently their foot soldiers – is to strangle them with arms-control measures and thwart them through youth education, skills training and employment. And a justice system is vital to end the culture of impunity enjoyed by war’s profiteers.

Nutt looks at many aspects of the aid scene in war-torn and disaster-struck regions and dissects some of the proposed solutions. She also offers recommendations for where you might best spend your charitable dollars.

Disasters such as the Haiti earthquake often prompt well-meaning outpourings of dollars that can’t all be wisely invested in a short period, while long-standing war zones attract little support. Entertainment personalities who establish their own charities can raise funds, but they don’t have experience as aid providers. Donations of goods such as clothing are also problematic because they can undermine the local industries vital to a thriving economy.

Look for organizations with a long-term commitment and experience in a region. Consider a small but regular contribution to an ongoing project instead of a one-time donation to a disaster fund. Projects that empower women help a whole community. And don’t send a goat, send a lawyer!

Nutt co-founded War Child in 1999. War Child’s mission is to empower children and young people to flourish within their communities and overcome the challenges of living with, and recovering from, conflict. You can link to the War Child website here.

Although Damned Nations offers a great deal of information, the narrative never bogs down in facts and figures as Dr. Nutt enlivens her discussion with anecdotes from her often nerve-wracking encounters in war-torn regions. Damned Nations is a powerful and thought-provoking book.

Posted in Non Fiction | Tagged , , , , , , , , , , , , , , , , | Leave a comment

More Money Than Brains: Why School Sucks, College is Crap & Idiots Think They’re Right


More Money than Brains: Why School Sucks, College is Crap & Idiots Think They’re Right by Laura Penny. McClelland & Stewart 2010.

Penny’s basic premise is that the people she labels nerds, particularly those who aspire to higher education, are increasingly targeted by anti-intellectual sentiment in an age that values money before all else. Universities have become places that students attend for the purpose of fast-tracking their pursuit of a profitable career rather than to extend their education and broaden their minds. She lays out her argument in seven chapters with titles such as Is Our Schools Sucking? and Bully vs. Nerd: On the Persistence of Freedumb in Political Life.

Here’s the introduction to Is Our Schools Sucking?:

I have to give the man (Bush Sr.) points for insisting that America must be a “reading nation,” even though he wrapped this fine principle in the usual blah-dee-blah about staying competitive in the international market. He omitted the salutary effects of reading that Jefferson endorsed, such as not becoming – or voting for – complete fuckwits, but he did ask the following excellent question:

Education is our most enduring legacy, vital to everything we are and can become. And come the next century – just ten years away – what will we be? Will we be children of the Enlightenment or its orphans?

More than a decade later, in 2000, his son posed a similar question: “Rarely is the question asked: is our children learning?” The difference between these two quotes says a lot, and none of it good. Even the president’s childrens is not learning. Is this because our schools is sucking?

In looking at the state of schools, Penny considers charter schools (in the U.S. and Alberta), standardized testing, programs such as No Child Left Behind and other relevant factors. The United States pours money into education but students continue to perform below average on international standardized tests. The gap between Canadian and U. S. test scores rules out the excuse of cultural distractions such as T.V. and video games. Penny points out that the most important factor in determining student performance is class. Poor students do poorly.

Generally, students in countries with greater economic mobility perform better on international standardized tests. A 2007 study found that the United States had about 1/3 the ratio of mobility of Denmark and less than half that of Canada, Finland and Norway. France, Germany, and Sweden, also had higher mobility, with only the United Kingdom being less mobile. (Economic Mobility: Is the American Dream Alive and Well? Isabel Sawhill & John E. Morton. 21 February 2007. Economic Mobility Project, Washington, D.C.. 4 December 2007) Standardized testing scores follow a similar pattern.

With the emphasis that is now being placed on universities as degree factories for career seekers, liberal arts degrees have fallen into disfavour. Yet, Penny notes, the top ten skills that employers list as vital for graduates entering the workforce include items such as English language proficiency, critical thinking/problem solving, written communications, and reading comprehension. These are all associated with a strong Liberal Arts program. Further, the emphasis on money before all else affects ethics. One study showed M.B.A. students cheated more than students in any other discipline, with the majority, 56%, of M.B.A. students cheating on assignments.

We should stop treating a university degree as a consumer good. Penny’s prescription for repairing universities includes removing career training programs such as Hotel Management, Business and Marketing to community colleges (which would also make them more affordable). Universities could then concentrate on higher education in the liberal arts and sciences.

You don’t have to look far to find anti-intellectual bias in government. Here in Canada, Michael Ignatieff was lambasted by the Conservatives as elitist and out of touch because he is well-educated and taught at the university level. Apparently, when it comes to politics, only dummies need apply. That would explain the mess the country is in!

Penny describes the governments since Reagan and Thatcher as essentially idiocratic, meaning focused on the individual rather than the greater good. Constant promises of tax cuts undermine the important functions of government as protectors of the infrastructures necessary to provide citizens with the framework needed for freedom of individual development. That includes things like good roads and schools and cops and legal systems.

Idiocrats such as Stephen Harper

… criticize executive power until they wield it and demand accountability and transparency untill they are the ones who have to provide it. People who do not believe in public service, because they do not believe in the public sector, run for office in bad faith. …Who tries to fix something they don’t believe in?

If the private sector is so fantastic, so much better at everything than the government, then go join it. Leave the work of governing to people who actually believe that governments can work.

Laura Penny has a Ph.D. in Comparative Literature and teaches English at Mount St. Vincent University in Halifax. Readers expecting a weighty tome, complete with obscure references, will find that More Money than Brains is instead snappy, satiric and sarcastic in tone. I’m good with sarcasm myself. I found many passages in More Money than Brains to be laugh-out-loud funny. However, I’ve found through sometimes sad experience that not everyone ‘gets’ sarcasm. Indeed, a surprising number of people might say “We are not amused!” And in this case, that’s too bad because Penny makes many good points and More Money than Brains is a worthwhile read.

Posted in Non Fiction | Tagged , , , , , , , , , , , , , , , , | 1 Comment

Eaarth: Making a Life on a Tough New Planet


Eaarth: Making a Life on a Tough New Planet by Bill McKibben. Alfred A Knopf Canada 2010.

My 84-year-old aunt doesn’t believe in climate change. Here’s the thing, though. Climate change is a lot like gravity. It doesn’t matter one whit whether you believe in gravity. When you jump up in the air, you’ll still land on the ground. It’s the same with climate change. You can not believe all you like, but you will still be affected.

Bill McKibben is a long-time believer. The End of Nature, now marking its 20th anniversary, was one of the first popular books to warn of world warming. While the lack-lustre, criminally negligent politicians currently running the show here in Canada continue to play the denial game, McKibben observes that it is already too late to head off serious trouble. Climate change is already well underway, and if we would avoid the very worst the need to act is ever more urgent.

McKibben’s title, Eaarth, is intended to convey his message in a single word. The old planet that we grew up on, that the human race has enjoyed for thousands of years, no longer exists. The days when the weather was reliable and predictable are ending. It used to be that extreme weather events were rare. Now, catastrophic, previously unheard of weather events are becoming common place. Less conspicuous are changes to old weather patterns that cause unsettling shifts in age-old routines.

Eaarth is divided into four parts. In the first two, McKibben looks at changes already underway, and how they are affecting our lives in the present. In the second two sections, McKibben first looks back to the roots of American government and the struggle between power held at the state level and big government represented by the federalists. When America was young, there were grand challenges that required big government: opening the west, building the interstate highway system, representing the nation on the international stage. Now that many of those big projects are finished, a return to smaller, more local governance makes sense.

McKibben looks to his home state of Vermont for encouraging examples of the growth of small and the growth of the local economy. He argues for the return of the small farm, and finds that a new outlook is taking hold. Companies like High Mowing Organic Seeds are finding a niche for themselves. While for decades, more and more people have left the land to move to big cities, a modest reversal is underway. In New England, where farms have been dying for 150 years, the number of farms grew from 28,000 to 33,000 between 2002 and 2007. The numbers are starting to shift back.

You might expect Eaarth to be a downer, but it’s not. McKibben’s writing is easy and accessible and reading Eaarth is like enjoying an extended conversation with a friend or neighbour. Eaarth is an interesting read with plenty of food for thought.

Here’s a short video of Bill McKibben and Noam Chomsky. A more extended talk by Bill McKibben on his book Eaarth is also available on Youtube.

Posted in Non Fiction | Tagged , , , , , , , , , , | 1 Comment

The Chimps of Fauna Sanctuary


The Chimps of Fauna Sanctuary by Andrew Westoll. Hapercollins 2011.

The Chimps of Fauna Sanctuary tells the story of Andrew Westoll’s experiences with the chimpanzees at Fauna Sanctuary over a summer that he spent as a volunteer living and working with the chimps. Along the way, Andrew details the background of the Sanctuary chimps and lets the reader get to know each chimp as an individual. Background information about chimp experimentation brings the reader up to date on the state of chimp research in the United States. The Chimps of Fauna Sanctuary is also the story of Gloria Grow, who established the sanctuary in 1997. This trailer by Andrew Westoll gives you a look at the Sanctuary and its chimpanzee residents.

Gloria Grow grew up in a family of animal lovers. Not just lovers, but rescuers. Her father had been deeply moved by the spectacle of his own father beating a work horse and subsequently never failed to come to the rescue of threatened animals. When Gloria was casting about for purpose and meaning in her life, she signed up for an Earthwatch program and travelled to Ellenburg, Washington to participate in a Chimp and Human Communication course with Roger and Debbie Fouts. The experience changed her life. With her vet husband, Richard Allan, she overcame hurdles to establish a sanctuary for chimps on their property near Chambly, Quebec. Visit the Fauna Foundation website here.

Gloria’s new facility was ready just in the nick of time. A large research facility in New York state, Laboratory for Experimental Medicine and Surgery in Primates (LEMSIP), was closing down. The chimps were to be shipped to another research facility, but through the efforts of James Mahoney, approximately one hundred primates were rescued prior to the closure of the facility. Some of those chimps arrived at Fauna Sanctuary.

Chimps in medical research facilities live horrific lives. They are housed in cages just 5 x 5 x 7 feet and isolated from contact with other chimps. Some chimps arrive at research facilities after being raised as pets or performers for their early years. As they inevitably grow into adults and become too large and aggressive for their keepers, they are disposed of. Other chimps were born in research facilities, where the babies, who would normally spend 4 or 5 years with their mothers, are raised in nurseries with other chimps and human caregivers.

When they become research animals, they are injected with viruses (particularly hepatitis and AIDS), and subjected to liver biopsies, often weekly. Not surprisingly, lab chimps are often deeply disturbed and emotional wrecks and exhibit symptoms such as self-mutilation, episodes of extreme aggression and body rocking.

There are now 12 chimps living at Fauna Sanctuary. One is Regis. Regis, was born at LEMSIP in 1988. He was taken from his mother at birth and spent 6 months in isolation in an incubator and then a cage. He has suffered from depression, anorexia and panic attacks.

Another chimp, Yoko, was born in 1974 and was raised in a Missouri circus until he was turned over to LEMSIP at the age of 7. From 1984 to 1991, Yoko had at least one punch liver biopsy per month. In a study to test a nasal spray, he was knocked down with a tranquilizer gun every 2 days for 2 months. Every day in this study, he had a fever. But since it might interfere with the results, he was never even given aspirin. In 1995 he was inoculated with HIV. He endured another 3 lymph node biopsies but no longer participated in any studies.

Over the last 50 years, wild chimpanzee populations have plummeted from over a million to an estimated 200,000 in Africa and are now listed as endangered. Under a special provision, captive chimps are only listed as threatened so that medical research can be continued on them. The wild capture of chimps was ended in the 1970s by CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora). Captive breeding ended in 1987, but there are still 1000 chimps held captive in 6 biomedical research facilities in the United States. More than half of these chimps are owned by the U.S. government and supported by taxpayers at a cost of millions of dollars. Of the 1000 chimps, more than 90% have been living in captivity for more than 10 years. It is estimated that the last government-owned chimp will die around 2041.

Except for research relating to hepatitis C, the usefulness of research results from chimp experimentation has proved minimal. In 2005, researchers successfully grew the Hep C virus in vitro using a human cell culture, so even that research no longer requires chimps. The Netherlands retired the last of its chimps in 2004, leaving the United States as the only country on the planet to maintain a captive chimp population for medical experimentation.

People who work for chimps such as Gloria Grow and Roger Fouts have been supporting the The Great Ape Protection and Cost Savings Act to free the lost 1000. You can read more about the act at the Project R & R, Release and Restitution for Chimpanzees in U.S. laboratories, at The video by Tom Odda, linked below, outlines the details of the act.

One of the saddest stories about research chimps concerns Nim Chimpsky (November 19, 1973 – March 10, 2000). Nim was the subject of an extended study of animal language acquisition at Columbia University, led by Herbert S. Terrace. Taken from his mother as an infant, he was placed with a human family who were to teach him American Sign Language (ASL), and for five years, he was a member of the household. Although the study was deeply flawed (amongst other issues, his caretakers didn’t know ASL at the outset of the study!) Nim learned about 125 signs and was able to communicate his needs and wishes.

As happens with little chimps, Nim got to be big. When Terrace ended the experiment, Nim was transferred to a research lab in Oklahoma and then LEMSIP. Deserted by the deeply unethical Terrance, the chimp who had been raised with people with no contact with other chimps, suddenly found himself locked in a little cage, signing to caretakers who didn’t know ASL and didn’t care anyway. Nim was finally rescued by the Black Beauty Ranch, operated by The Fund for Animals, a group led by Cleveland Amory, in Texas. Nim died at the age of 26 from a heart attack. There is now a movie about Nim entitled Project Nim produced in 2011. Here’s a review of Project Nim by Dr. Theo Capaldo linked here.


Nim Chimpsky (Wikipedia)

Posted in Non Fiction | Tagged , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

A Walk in the Woods


A Walk in the Woods by Bill Bryson. Doubleday Canada 1997.

When Bill Bryson moved to a small New Hampshire town, he noticed a trail disappearing into the woods at the edge of the village. It was part of the Appalachian Trail, a hiking path that runs more than 2,100 miles through the Appalachian mountains, from Georgia to Mount Katahdin in Maine. (Actually, you can now follow the International Appalachian Trail north from Mount Katahdin to Crow Head in Newfoundland/Labrador, a 1900 mile journey. You can visit a report of our hike on a section of the trail in Forillon National Park linked here.) A germ of an idea began to nag at Bryson. He should make the journey from Georgia to Maine! It would be good for him. He would become fit. He would see the forest first-hand before global warming turned the whole of the Appalachian wilderness into savanna. With a bit of luck, he found a hiking partner, an acquaintance from years ago, Stephen Katz. So it was that in March of 1996, Bryson found himself at Amicalola Falls Lodge, Georgia, setting off on the first leg of his adventure.

Bryson is a wonderful hiking partner. His tour of the Appalachian Trail offers the reader an entertaining and fulsome experience without all the blisters, sweat, bug bites and other inevitable discomforts of hiking more than a few hundred feet. Bryson’s account is often laugh-out-loud funny. I loved his snappy come-backs. For example, when asked what made him buy a particular hiking pack, he answers “Well, I thought it would be easier than carrying everything in my arms.” Bryson’s often-hilarious, sometimes touching, interactions with his hiking partner Katz also enliven the tale.

Along the way, a lively variety of facts and views are gently offered up to the reader to contemplate as you walk. These include a history of the Appalachian Trail and the men most responsible for its development and a more longterm history of the geology of the mountains themselves. Interesting characters associated with the forest are introduced, people such as plant collector Thomas Nuttall, who in 1817 produced the Genera of North American Plants. He also discusses natural disasters such as the blight that wiped out American Chestnuts, four billion trees across the Appalachians, in just 35 years.

Bryson comments on the shortcomings of the National Park Service, not the rangers in the parks but the management responsible for plenty of insanity, from clear-cutting and rampant road construction to overseeing species extinctions. Under the Park Services stewardship, forty-two species of mammal have disappeared from America’s national parks in the 20th century.

Bryson observes that half of all the malls and offices in America have been built since 1980 and Americans have more or less given up walking, with the average American walking just a few miles in a week. I was unable to confirm his figures, which would be dated now anyway, but since this book was published in 1997, obesity has only increased with our continued sedentary car-oriented lifestyle.

At the outset, Bryson was worried about bear encounters, but in the end, he and Katz meet up with very little wildlife, and no bears. If I were hiking the Appalachian Trail on my own or with another woman, it would be human predators that would most worry me. Indeed, in the year that Bryson hiked the trail, two women were murdered near the trail in Shenandoah National Park. He also makes light of people using cell phones. Of course, since 1997, the availability of all manner of electronic devices has explodes. You can even get cameras with built-in GPS devices. No doubt this helps to make the trail a safer undertaking.

I didn’t feel tempted by Bryson’s tale to undertake any extensive hiking expedition myself, but found A Walk in the Woods a perfectly satisfactory alternative to a do-it-yourself adventure.

Posted in Non Fiction | Tagged , , , , , , , , , , , , | 6 Comments

Boomerang: Travels in the New Third World


Boomerang: Travels in the New Third World by Michael Lewis. W.W. Norton & Co, 2011.

Have you ever had the feeling that you’ve been going about your daily life, paying the phone bill, making dinner, and one day you look up and find all hell has broken loose? The U.S. government is bailing out banks, people are losing their homes, Iceland is bankrupt, Ireland is in crisis…. Really? Don’t they fish in Iceland? Wasn’t Ireland booming just the other day? If you have felt a bit dazed by it all, Boomerang is the book for you.

In Boomerang, Michael Lewis visits five regions hard hit by the financial crisis of 2008 and offers the reader some insight into just what has been going on over the last few years. The roots of the crisis can be traced to cheap credit. As Lewis tells it, a tsunami of cheap credit rolled across the planet between 2002 and 2007.

It offered entire societies the chance to reveal aspects of their characters they could not normally afford to indulge. Entire countries were told, “The lights are out, you can do whatever you want to do and no one will ever know.” What they wanted to do with money in the dark varied. Americans wanted to own homes far larger than they could afford, and to allow the strong to exploit the weak. Icelanders wanted to stop fishing and become investment bankers, and to allow their alpha males to reveal a theretofore suppressed megalomania. The Germans wanted to be even more German: the Irish wanted to stop being Irish. All these different societies were touched by the same event, but each responded to it in its own peculiar way. No response was as peculiar as the Greeks’, however.

In five engaging chapters, Lewis reports on Iceland, Greece, Ireland, Germany and America as represented by California. He begins with Iceland. I found it just amazing to read of how this tiny country suddenly became a major player in the world of high finance. Young men with little knowledge of investment banking became ‘experts’ virtually overnight and played with vigour…right up until the stock exchange collapsed. Perhaps I find the attraction of investment gambling hard to grasp because I am a woman. Lewis notes:

One of the distinctive traits about Iceland’s disaster, and Wall Street’s, is how little women had to do with it. Women worked in the banks, but not in the risk-taking jobs. As far as I can tell, during Iceland’s boom, there was just one woman in a senior position inside an Icelandic bank. Her name is Kristin Petursdottir, and by 2005 she had risen to become deputy CEO for Kaupthing (bank) in London. “The financial culture is very male-dominated,” she says. “The culture is quite extreme. It is a pool of sharks. Women just despise the culture.”

Petursdottir quit her job in 2006 and started her own financial services business run entirely by women to bring, as she puts it, “more feminine values to the world of finance.” They’re doing fine, thanks, one of the few profitable financial services left in Iceland.

From Iceland, Lewis moves on to Greece and looks at their failed equation: Too much money moving out of government coffers, too little coming in. While government workers enjoy lush incomes and pensions, tax fraud is rampant. There are laws that make cheating the government of more than 150,000 euros a jailable offense, but they’re not enforced.

From Greece, it’s on to Ireland, where housing developers enjoyed a building boom that resulted in plentiful construction jobs and endless square feet of office space and housing units standing empty. When the bubble burst, the government picked up the tab for the bad investments and huge losses of Irish banks, a move that appears suicidal yet has prompted little protest by Irish citizens.

At the centre of the European crisis is Germany, the sensible sibling who is left cleaning up after the misdemeanors of the rest of the family. Not that Germany didn’t indulge in fantasies of its own. The German bankers miscalculated when they put their faith in the integrity of the U.S. banking system.

The global financial system may exist to bring borrowers and lenders together, but, over the past few decades, it has become something else, too: a tool for maximizing the number of encounters between the strong and the weak, so that the one might exploit the other. Extremely smart traders inside Wall Street investment banks devise deeply unfair, diabolically complicated bets, and then send their sales forces out to scour the world for some idiot who will take the other side of those bets. During the boom years a wildly disproportionate number of those idiots were in Germany.

Integrity got up and left the room quite a while ago, but it seems that not everyone noticed. The Germans were blind to the possibility that the Americans were playing the game by something other than the official rules.

Finally, Lewis returns to America and looks at state and local governments, which face a collective annual deficit estimated at roughly half a trillion dollars, with another huge bundle of nonexistent funds owed to retired workers. Lewis talks to former California governor Arnold Schwarzenegger about trying to bring some semblance of order to an out-of-control system. Finally, he visits the place where the buck finally stops, local government in the person of Vallejo’s new city manager, Phil Batchelor.

Batchelor suggests that the orgy of spending that ushered in the current debt situation is a result of our most primal instincts, our reptilian brain, the impulse for instant gratification and the innate desire to avoid scarcity. We’re minimizing the use of our ability to self-regulate using higher brain functions. I don’t think any such elaborate explanation is needed. It all just boils down to greed, the same impulse that stops us from acting to mitigate global warming. What a slimy, colossal, irresponsible and short-sighted waste of money.

Boomerang is highly recommended, an entertaining, enlightening and informative, witty and scary read.

Posted in Non Fiction | Tagged , , , , , , , , , , , , | 1 Comment