(photo by Art Streiber / Vanity Fair)

(photo by Art Streiber / Vanity Fair)

Here’s how good Michael Lewis is: Even though his latest feature in Vanity Faira primer on everything that is going wrong with California — is probably among his least-impressive outings in recent memory, it’s still a great work of journalism that has a lot to teach us.

Let’s start from the top and work our way down.

The beginning is one of my least favorite things about this piece, but it’s there for a reason. (We’ll get to that in a bit.) Deep breath: It plunges immediately into the U.S. credit downgrade by the S & P, winds through some financial analysis, travels back in time (weirdly) to a Dec. 2010 episode of 60 Minutes, hovers over an analyst named Meredith Whitney, quotes New Jersey governor/presidential anticandidate Chris Christie, goes to Whitney again, and then leaps into a section break. “Gary Robinson died hungry” this ain’t. Every time a story plunges into a couple hundred words of pure finance, I always feel just a little lost, like I’ve walked into a small, quiet room filled with people I haven’t met.

Fortunately, we soon start digging into a story. Whitney (correctly) forecast a municipal finance calamity in 2007. Nonbelievers riddled her with flak. Then the housing bust led to the 2008 financial bust, and Whitney won redemption.

But enough of that. From there, Lewis whisks us to (!) a helter-skelter 7 a.m. bike ride with former California Gov. Arnold Schwarzenegger. (Why? Why not!) The section, a profile in miniature, oozes color:

It isn’t until [Schwarzenegger] is forced to stop at a red light that he makes meaningful contact with the public. A woman pushing a baby stroller and talking on a cell phone crosses the street right in front of him and does a double take. “Oh … my … God,” she gasps into her phone. “It’s Bill Clinton!” She’s not 10 feet away, but she keeps talking to the phone, as if the man were unreal. “I’m here with Bill Clinton.”

“It’s one of those guys who has had a sex scandal,” says Arnold, smiling.

“Wait … wait,” says the woman to her phone. “Maybe it’s not Bill Clinton.”

Before she can make a positive identification, the light is green, and we’re off.

Lewis lingers a while over the Governator’s doomed tenure and the self-destructiveness of California politics. And then we’re off again, to the city of San Jose, first at a city council meeting, and then in Mayor Chuck Reed’s office, where the surreality continues, both in interview and in fact, courtesy of a pension-funding crisis that has torpedoed the city’s budget and staff levels:

By 2014, Reed had calculated, a city of a million people, the 10th-largest city in the United States, would be serviced by 1,600 public workers. “There is no way to run a city with that level of staffing,” he said. “You start to ask: What is a city? Why do we bother to live together? But that’s just the start.” The problem was going to grow worse until, as he put it, “you get to one.” A single employee to service the entire city, presumably with a focus on paying pensions. “I don’t know how far out you have to go until you get to one,” said Reed, “but it isn’t all that far.” At that point, if not before, the city would be nothing more than a vehicle to pay the retirement costs of its former workers.

Then, near the close of the section, Lewis gets Reed to take it to the next level:

I ask him what the chances are that, in this pinch, he could raise taxes. He holds up a thumb and index finger: zero. He’s recently coined a phrase, he says: “service-level insolvency.” Service-level insolvency means that the expensive community center that has been built and named cannot be opened. It means closing libraries three days a week. It isn’t financial bankruptcy; it’s cultural bankruptcy.

“How on earth did this happen?” I ask him. 

“The only way I can explain it,” he says, “is that they got the money because it was there.” But he has another way to explain it, and in a moment he offers it up.

“I think we’ve suffered from a series of mass delusions,” he says. 

I didn’t completely understand what he meant, and said so. 

“We’re all going to be rich,” he says. “We’re all going to live forever. All the forces in the state are lined up to preserve the status quo. To preserve the delusion. And here—this place—is where the reality hits.”

(Interviewing observation: Notice Lewis goading Reed with broad, playing-dumb questions to open him up.)

From there, we spirit away to the doomed city of Vallejo, population 112,000, bankrupt and barely filled with anything resembling government anymore, with a city manager who has one assistant who has to lock the door every time she leaves the office because she’s the only one who’s there. Then Lewis winds around again, and we land, finally, on Vallejo firefighter-cum-fire chief Paige Meyer, who represents the lowest, saddest peg on the financial crisis totem pole. The story ends with Meyer trying to figure out, like the rest of us, how to Do More With Less, except when Meyer tries to Do More With Less, he could get killed because of it. He’s got the burned skin tissue to prove it.

What makes Lewis one of our most brilliant writers is that he figures out how to take an abstract idea and turn it into a story about people. Schwarzenegger isn’t just a failed governor; he was a cultural force who, almost completely by accident, could have been California’s best chance to save itself from built-to-fail partisan gridlock, but failed. Chuck Reed isn’t just San Jose’s mayor; he’s the forlorn captain of a big shiny ship that looks like it’s sinking into the River Acheron. And Paige Meyer isn’t just another pension-hungry public servant; he’s a dumb-luck guy who loves to fight fires who’s now figuring out where’s the best place to stick his thumb with all these cracks in the dam. We need more financial writers who can do this. The funny thing is, when you make a big story about small people, it actually says a lot about the big picture. As photography legend Diane Arbus once put it, the more specific you are, the more general it’ll be. That’s how Lewis can write a story about a finance-savvy monastery — "Beware of Greeks Bearing Bonds," Oct. 2010, one of the most remarkable magazine pieces I’ve read in the past two years — and somehow sum up the whole Greek financial crisis.

Lewis’ narrative here seems picaresque, but it actually has a very linear structure. Lewis starts with the biggest abstraction — shaky bond markets — and focuses the loupe, with greater and greater magnification, down to the abstraction’s most granular surfaces, from federal, to state, to local, pointing toward a final question: Who pays the people who put out our fires, and what happens when we can’t do that anymore?

But the biggest problem with Lewis’ piece is its ending — a lone paragraph stapled haphazardly after the end of a bit about Meyer — sticking out like some kind of missing-dog poster on the bottom-right corner of his Guernica

When people pile up debts they will find difficult and perhaps even impossible to repay, they are saying several things at once. They are obviously saying that they want more than they can immediately afford. They are saying, less obviously, that their present wants are so important that, to satisfy them, it is worth some future difficulty. But in making that bargain they are implying that, when the future difficulty arrives, they’ll figure it out. They don’t always do that. But you can never rule out the possibility that they will. As idiotic as optimism can sometimes seem, it has a weird habit of paying off. 

Break cookie, receive fortune. This somehow feels all wrong, too schlocky and easy, too much telling and not showing, and that leads me to the parenthetical in this post’s title: The financial crisis is still totally terrifying.

When I first read this piece and tried to decide what I thought about the wandering narrative, I saw a similarity with the Odyssey: We’re all strangers in strange lands these days, trying to find our ways home. Yet the Odyssey has an end; Odysseus returns to his wife in Ithaca and slays her suitors. Wait, I thought, this is more like Dante’s Inferno. Lewis is taking us on a descent through hell, with each circle more calamitous than the next. But that wasn’t right either. In the final circle of hell, Lucifer presides over Vallejo, not book-writing, Bible-loving city manager Phil Batchelor.

When you start chasing the money around, you start seeing that all the tops of things are connected to their bottoms, which is why I like Lewis’ story so much. But money doesn’t run up a totem pole; it runs on a loop, even when some sides of the loop control most of the movement. The Occupy Wall Street movement rightfully demands additionally scrutiny of the institutions that so helpfully lashed us to the masts of our sinking, shiny ships. But during the run-ups of the last decade, there was a considerable amount of consent also required: more credit to purchase a larger home when a smaller one sufficed; more student loans to go to better schools when we would have afforded more average ones; and that twisted anticonsent of agreeing with each other never to let our representatives raise taxes, ever, to pay for anything we want but were going to get anyway. I think the real end of this story comes before its halfway point, when Lewis guides us to a book by Joe Mathews and Mark Paul called California Crackup:

…Arnold Schwarzenegger’s experience as governor was going to be unlike any other experience in his career: he was never going to win. California had organized itself, not accidentally, into highly partisan legislative districts. It elected highly partisan people to office and then required these people to reach a two-thirds majority to enact any new tax or meddle with big spending decisions. On the off chance that they found some common ground, it could be pulled out from under them by voters through the initiative process. … California state government was designed mainly to maximize the likelihood that voters will continue to despise the people they elect.

But when you look below the surface, [Mark Paul] adds, the system is actually very good at giving Californians what they want. “What all the polls show,” says Paul, “is that people want services and not to pay for them. And that’s exactly what they have now got.”

No, Lewis’ piece isn’t the Odyssey or Dante’s Inferno. It’s more like No Exit, where the characters wait in hell for a torturer who never arrives, and who fill the time by making hell for themselves and each other. California, here we come.

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