We’ve been asked by many of our customers for periodic, no-nonsense emails with just-in-time information for managers and knowledge workers on how organizations work. This is our 50th issue and we hope you enjoy it. Past issues are available on our website.
What We're Reading
Boomerang: Travels in the New Third World
by Michael Lewis (W. W. Norton & Company)
Hardcover ~ Release Date: 10-3-2011
I've reviewed Michael Lewis before with The Big Short: Inside the Doomsday Machine. He's a great author because he makes a complex topic understandable. So if you don't understand why Greece is in the news and why Italy is being mentioned daily, this book is for you. It's critical to understand why the 'Euro problem' affects your business and your finances.
Essentially Boomerang: Travels in the New Third World is a continuation of The Big Short. How did the financial crisis of 2008 play out? Who is paying the bills? (Here's a hint, look in your wallet) He tells the story through chapters on a couple of countries (Iceland, Greece, Ireland, Germany) and one on California. In Greece, people make a national sport out of not declaring any income or paying taxes on said income. Yet they plan on collecting their publicly funded pensions as early as age 55. The public sector jobs in Greece are on average paid more than 3 times what a private sector job earns. And the pensions, salaries and other government expenses are unfunded to an amount that no one can seem to determine. The underfunding was all kept off the books, which is why they need the money from the Germans and French you keep reading about. How is that possible you ask? Well that is what makes such interesting reading and explains why the fighting in the streets of Greece against the government trying to get its fiscal house in order is so baffling.
In Ireland, the government decided to take on the debt of the banks! (Sound familiar?) This was another case of taking on debt at 100 cents to a $1 with the government making all kinds of noises about it having to do so to 'save the system'. So now the Irish people are paying for debt they had no part in creating, no benefit from and really no say in other than electing the officials who made this decision on their behalf.
Then there is California; the microcosm of the financial crisis in the US. Too many raises given public employees when times were good, none taken back when times turned bad. Ultimately you end up with the worse case scenario where a city is left with no services; only collecting taxes to fund the pensions of former city employees. Add to that a once-stellar public education system slowly being de-funded while tuition increases move it's availability beyond many of its residents.
It all reminds me of something a friend once said to me; 'you seem to think things won't keep getting better.' I looked at her with astonishment. I had lived through the steel industry completely falling apart and leaving Western New York with high unemployment, often taking the pensions of the long-term employees with them. When I came out of college, there really were no jobs. I left the area and never returned to live there and in fact the jobs also never did return to that area.
She, on the other hand, had never experienced that. She has worked for the same company her entire life. Her parents had very different and lucrative professional lives so she has lived a life of 'better and better' returns. While I wish her well, it is not to be for her kids. So when times are good, we enjoy. When times are not so good, we scale back. Greece doesn't want to scale back. Ireland is apparently doing so without much protest. As for the other countries Michael Lewis covers...read this book and come to your own continuing conclusion. It's a fascinating view on a very current story. We'll all have a hand in the way we write the chapter about the US. Will it be like California? Ireland? Iceland? Greece? Germany?
eBooks, eBooks, eBooks
Don't forget, all of the Thin Books are available as ebooks. Get your favorite Thin Book on your iBook, Kindle, Nook or Google reader. More
Boomerang: Travels in the New Third World
