Michael Lewis' central question of this book can be summarized as: The parents turned off the lights and walked out of the room, what did each country do when no one was looking?
Iceland went from a nation of fishermen to a nation of financial investors. Ireland decided that every man should own their own McCastle, just like every American got to own their own McMansion. Spain handed out loans like candy. Greece decided that public sector employee salaries should be tripled - and everyone can have a public sector job. Germany decided to lend everyone money to make it all happen, then become outraged at everyone else's fiscal irresponsibility.
Europe was not alone. California, for example, time and time again used the statewide ballot process to increase benefits while cutting taxes. The budget deficits existed long before the property values crashed. The crisis made the long-term unsustainable situation into a short-term problem overnight. The state faced bankruptcy. Yet still, each time a proposition that would have amended the situation came to a vote, it was shot down. The collective will of the state, like its individual citizens, wanted to put everything on the credit card.
Lewis closes with one idea. One that I keep coming back to. The recipe to long term success is to be able to put aside short term desires in favor of long term investment. Enter the Stanford marshmallow experiment (covered by Slate):
We live in a society today where it is all too easy to satisfy every urge and impulse that we have.
This is not going to be easy. We are hard-wired to want pleasure. All animals are. It's no surprise that pet obesity has crossed the 50 percent threshold, while humans are not far behind.
The global financial crisis is not the cause of our woes, but merely a symptom of our inability to delay gratification. To build a better world for tomorrow, we need to start by teaching our kids the importance of patience.