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Book review: Boomerang — Travels in the New Third World

This review first ran in The Hamilton Spectator on Oct. 24.

Boomerang: Travels in the New Third World

By Michael Lewis

W.W. Norton and Company

$30

You walk into a room.

The room’s dark. No one else is around.

In the middle of the room is a huge pile of someone else’s money.

So what do you do?

Walk away empty handed or stuff all of your pockets with borrowed cash?

Author Michael Lewis can make an educated guess based on what he’s witnessed as a financial disaster tourist. In his latest book, the author of Moneyball, The Blind Side and Big Short recounts his visits to Iceland, Ireland, Greece and California where bankers, politicians, unions and citizens appear to have lost their minds in a mass delusion.

“The tsunami of cheap credit that rolled across the planet between 2002 and 2008 was more than a simple financial phenomenon,” says Lewis. “It was temptation, offering 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.”

In Iceland, they stopped fishing, became investment bankers, turned their country into a hedge fund, went on a spending spree and racked up losses of $100 billion, or $330,000 for every Icelandic man, woman and child.

In Ireland, a single bank ran up $3.4 trillion in losses. “The Irish used foreign money to conquer Ireland,” says Lewis. “Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do with it was buy Ireland. From each other.”

When the real estate bubble burst, the country’s entire banking system collapsed and the government stuck Ireland’s citizens with the bill in what Lewis calls a suicidal decision.

The Greeks turned their country into a piñata stuffed with cash and invited as many of their 11 million citizens as possible to take a whack. The average government worker earns three times more than the average worker in the private sector. Along with $400 billion of outstanding government debt, there’s another $800 billion owing for pensions. Against $1.2 trillion in debts, a $145 billion bailout is more of a gesture than a solution, says Lewis.

But it’s not just countries that are sliding into default. Municipalities are in a heap of trouble.

Lewis paid a visit to San Jose, which has the highest per capital income of any city in the United States after New York. It’s one of the few cities in the U.S. with a triple-A rating from Moody’s and Standard and Poor’s.

And it’s close to going bankrupt.

Lewis spent time with the city’s mayor Chuck Reed. “He’s got a problem so big that it overwhelms ordinary politics: the city owes so much more money than it can afford to pay its employees that it could cut its debts in half and still wind up broke.”

San Jose’s budget turns on the pay of its public safety workers. Police and firefighters account for 75 per cent of the city’s discretionary spending.

“Over the past decade, the city had repeatedly caved to the demands of its public safety unions,” says Lewis. “What politician wants to spat publicly with police officers and fire fighters?”

The mayor told Lewis that when the police or fire department of any neighbouring city struck a better deal for itself, it became a fresh argument for improving the pay of San Jose police and fire and the starting point for the next round of negotiations.

But it’s not just pay hikes that are crippling San Jose. Pension costs for retired city workers are soaring. In 2002, pension costs were projected to run $73 million a year. Those costs are now pegged at $245 million. Pension and health costs of retired workers account for more than half the city’s budget.

The city is legally obligated to cover those costs so deep cuts are happening across the board. The workforce is down from 7,450  to 5,400 city staffers and everyone’s taken a 10 per cent pay cut. Libraries are closed three days a week. The police union recently suggested to the mayor that he close the libraries for the other four days.

By 2014, the mayor has calculated that the 10th largest city in the U.S. will be served by 1,600 public workers. He says the future is not far off when the city will have a single employee, presumably with a focus on paying pensions.

“The problem with police officers and firefighters isn’t a public-sector problem,” says Lewis, reflecting on all that he’s witnessed as a financial disaster tourist. “It isn’t a problem with government; it’s a problem with the entire society. It’s a problem of people taking what they can, just because they can, without regard to the larger social consequences.

“It’s not just a coincidence that the debts of cities and states spun out of control at the same time as the debts of individual Americans. Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom. They’d been conditioned to grab as much as they could, without thinking about the long-term consequences.”

Three things will happen after you read Lewis’ road trip through the financial ruins of the new third world. You’ll want to send a thank you card to Jim Flaherty and ask if he’ll agree to a lifetime term as Canada’s Minister of Finance. You’ll start paying attention to the salaries, pay hikes, pension costs and liabilities for City of Hamilton workers and retirees. And you’ll be tempted to start burying gold bars in your backyard because the financial world appears to have a serious lack of parental supervision.

Book review: StandOut — The Groundbreaking New Strengths Assessment from the Leader of the Strengths Revolution

This review originally ran in the Oct. 11 edition of The Hamilton Spectator.

StandOut

By Marcus Buckingham

Thomas Nelson

$16.95

Michael Jordan the basketball player was arguably the best to ever play the game.

Jordan the baseball player? Not so much.

Air Jordan stunned the sports world when he retired during the 1993-94 season to pursue his dream of becoming a professional baseball player.

Jordan got off to an inauspicious start, hitting just .202 with the minor league Birmingham Barons.  By the end of the season, he was batting .252.

His manager said that with more work, Jordan could someday make it to The Show as a journeyman player.

After a less than stellar season in the minors, Jordan returned to basketball and led the Chicago Bulls to three more championships.

Jordan wisely opted to return to what author Marcus Buckingham calls our strengths zone. All of us have one. Within this zone is where we do our best work and do it better than the rest. It’s also where we’re our most innovative and productive.

“We each have specific areas where we consistently stand out, where we can do things, see things, understand things and learn things better and faster than ten thousand other people can,” says the leader of the strengths revolution.

Straying from our strengths zone can be problematic. Our stand out performance quickly deteriorates into something less than pedestrian. We go from being an all-star to journeyman player in a supporting role.

“This doesn’t mean you shouldn’t experiment with new positions or stretch yourself with new challenges,” says Buckingham. “You should. But when you do, know that, consciously or not, you will bring your particular brand of genius with you.”

To find your zone, Buckingham has drawn on 20 years of research to come up with what he calls nine strength roles. These roles combine the most common and powerful themes related to talent.

There are advisor and connector roles. Equalizers and creators. Influencers and pioneers. Providers, stimulators and teachers. Two of these roles will be dominant in how we work with others and approach our work.

Buckingham defines each role and highlights when we’re at our most powerful in these roles. He suggests how to make an immediate impact, how to manage and lead and take your performance to the next level. There are also helpful pointers on what to watch out for so you don’t turn your strength into a weakness by alienating and annoying your colleagues, bosses and direct reports.

Through the wonders of an online assessment, Buckingham will reveal your top two roles. “These two strength roles are where you will make your greatest contribution. They are your edge – where you will have a natural advantage over everyone else. And they are your multiplier – you will most quickly learn and improve upon any innovations, techniques or best practices that complement these two roles.”

The assessment takes about 15 minutes to complete and walks you through a series of scenarios. For each scenario, you have 45 seconds to choose one of four possible responses.  There’s no right or wrong or obvious answers.  

To get a sense of the test, here’s one of the scenarios. A new teammate comes to you really excited about an idea she is sure will help your team excel. What do you do?

Do you run her idea by the rest of the team to see what they think?

Do you ask some challenging questions to see if she’s thought through her idea?

Do you highlight what’s great about the idea and help her build on it?

Or do you try out the idea and see if it works?

Buckingham says the assessment won’t reveal how well you know yourself. But it will reveal how you come across to others and when you’re at the top of your game. “When your read your results, keep your mind open to the possibility that, no matter how you see yourself, this is how others see you.”

Having read the book, I was pretty confident I knew my top two strength roles heading into the assessment. My test results told a different story, flagging two other roles that in hindsight are a pretty accurate read of my strengths.

If you’re not in the zone and clueless about what sets you apart, Buckingham can help you find your way. Knowing what you’re great at and playing to your strengths is your best bet for becoming an all-star at work and loving what you do for a living.

The choice is yours. You can spend more time at work doing the equivalent of highlight reel slam dunks from the free throw line or you can waste your time grounding out and striking out at the plate.