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Author Michael Lewis - Boomerang. -

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(generated from captions) Opposition Leader support them,

or just say no? Political editor

editor Chris Uhlmann. Well,

once again, markets around the

world are plummeting due fears over global debt. The United States can't seem to find a way to cut its

borrowings and economic

instability continues to dog

Europe. One person who has

observed the ongoing global

meltdown very closely is

Michael Lewis, one of the

world's most successful

non-fiction authors. Two of his

books, 'The Blind Side' and

'Moneyball' have been turned

into blockbuster films. He has

spent the past few years

travelling to countries hardest

hit by the financial crisis to

find out what caused it and how different people have His new book, 'Boomerang' is a

collection of essays he has

written to 'Vanity Fair'

magazine about the GFC and he

joined me earlier from

California. Michael Lewis, in

'Boomerang', you've taken a

tour through five of the

countries hardest hit by the

global financial crisis. Are

you able to say looking at

those five countries if there are any common factors that

have caused this crisis at its

core? The core of the crisis is

the same everywhere. The core

is an incouldn't nens in the global

enabled all sorts of people and companies and banks and

countries to borrow money that they shouldn't have been

allowed to borrow, at least

under the terms at which they

borrowed the money. The thing

that is so interesting to me,

even though the core is the same everywhere, the

consequences are different

everywhere because people

responded to this temptation depending on where they were. Let's turn our attention to Greece. in Greece without anybody to Greece. How did

saying, "Hang on a minute,

what's going on here? Is this

actually OK?"? Not only did

nobody in Greece say very much about it as it was happening,

but the Greeks actually

disguised their own books. The

Greek Government with the help

of Goldman Sachs cooked its

books to enter the euro back in

2001 and I think the answer to

your question is just in no-one's interest to blow any kind of whistle and

say, "This is unsustainable."

There were a handful of people

who were protesting the

outrages of the Greek

Government. A former finance

minister named Steph know Monos

who did things like calculate

that with the inefficiency with

which the Greek national

railroad was run, it would

actually pay Greece just to put

all the passengers in taxi cabs

and close down the national

railroad, but problem in Greece is that

everybody is kind of in on it.

There were too many - everybody

one way or another benefitted

from this handout operation that the state about the Germans? Why are they

the one whose are going to be

lumped for the bill for what's

going on in Europe? The German

example is riveting because

it's not as if the Germans were

spared this temptation. The

Germans could have done what we in America

in America did, with all these

different European countries

did, they could have used the temptation of very cheap

to create real estate bubbles,

to send their banks out on

conquests of the world or whatever it was that they might

have wanted to do,

German people behaved very,

very, very responsibly. I mean,

to this day, it is a taboo in

Germany to borrow money for

consumption, to borrow money

you can't repay. There are in

place still these social strictures that constrain personal behaviour, and as a relatively very, very sound

footing, and having behaved responsibly, having increased

their productivity, they are -

they are the deep pockets in

Europe. They don't have debts

they can't afford to repay, and

so you've got this very strange

situation in Europe where

you've got one population, one

national population, the German

people, who feel that we behave well, all these other people

have behaved badly, why should we now be on the hook for their

losses?" So it's just a kind of

digging their heels in feeling.

" We're not going there. We're

not going, for example, enable the European Central bank to

bail out these other countries

because we were promised that

we wouldn't have to do it."

And I And I think they feel like they

control their destiny. I think

that there is a feeling that

they're not going to have to do

it if they don't want to do it.

The question is then what what do you think becomes of

the euro? I think it fractures.

I don't know how many countries

leave it, but I don't believe,

for example, five years from now the now the Greek currency will be the euro. I think the euro. I think it will be

something else. I think the

pressures in the markets now -

one of two things has to

happen, either the German

people reverse themselves and

that seems very unlikely

because the German people seem to be becoming hostile to to be becoming more, hostile to the idea of bailouts

and they enable the European

Central bank to essentially buy

up all the Italian and Spanish

and Greek government bonds they

need to, to finance these

countries, or the financial

markets force the issue and

these countries on the

periphery aren't able to fund themselves. The latter looks

more likely to me T looks to me

like what you're going to get

like what you're going to get is the Greek people after

long periods of austerity are

getting frustrated with the euro and probably voluntarily

exiting. How does what's going on

on in the US on in the US economy compare to Europe? You know, it's funny,

the US financial system is in

the way the tallest midget

because we are till in a mess.

We still have these banks that

are too big to fail that are now effectively government

guaranteed and they're still doing speculative kind of things. profits from speculative

activity. If it all goes wrong,

taxpayers get the losses. There

is a lot of outrage about that and I think that mere fact is

at the bottom of the Occupy

Wall Street movement. We don't

look like the look like the problem. Right

now we, improbable as it is,

like a safe haven. You mentioned the Occupy Wall

Street movement, what have you

made of that and do you see it

as anything more than a niche

protest? I think it's a really

big deal, but

parks in various cities may or

may not be a big deal. That's -

not so much that, but there is

a pal panl anger about what has. Palpable anger about what

has happened here, this

grotesque injustice has been

committed. The elites of

society orchestrated a

financial debacle that they were

were then rescued from. The

consequences of that debacle

are now felt by less privileged people, and everybody

two sets of rules. One set of

rules if you happen to work in

this paper shuffling financial

system and other set of rule fs you happen

you happen to be out you happen to be out in the

real world, productive world.

Socialist for capitalism and

capitalism for everybody else

and that outrages people.

America will put up with great

inequalities of wealth, but the

idea that some people, no

matter how badly they perform

are not allowed to fail is outrageous to

that anger is fueling not just

the Occupy Wall Street

movement, but the Tea Party movement, so what you've got here is growing, that will express itself

politically one way or