Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Masters in
Speaker 1: Business with Barry Ritholts on Bloomberg Radio.
Speaker 2: This week on the podcast what can I say? Every
Speaker 2: time I am afforded an opportunity to sit down with
Speaker 2: Michael Lewis, it's just delightful. He's such a fascinating character.
Speaker 2: The people and ideas he writes about are absolutely fascinating.
Speaker 2: His new book, he has this just absolutely insane way
Speaker 2: of seeing around a corner. I asked him, how come
Speaker 2: every time you find yourself covering the subject, six months
Speaker 2: later it blows up and it's in the headlines. He's
Speaker 2: done it with The Big Shorty, a big short that
Speaker 2: was mostly after the fact, But he did it with Flashboys,
Speaker 2: and he did it with Moneyball, and he certainly did
Speaker 2: it with Going Infinite, and now he's doing it again
Speaker 2: with Who Is Government. We talk a little bit about
Speaker 2: the Elon Musk and Doge, but we mostly talk about
Speaker 2: these nameless, faithless civil servants who dedicate their career to
Speaker 2: providing a service to the American taxpayer, and whether it's
Speaker 2: saving lives in coal mines, or stopping cybercrime or keeping
Speaker 2: the food supply safe. The book is just filled with
Speaker 2: all these stories and it's absolutely a nonpartisan. It's not
Speaker 2: a left right thing. It's Hey, there are certain things
Speaker 2: that only government can do. The private sector is in
Speaker 2: building the Interstate Highway System on NASA. In fact, when
Speaker 2: you see private sector services in these spaces, it's because
Speaker 2: they've built on top of the seminal work the government
Speaker 2: has done that. No one would undertake these projects that
Speaker 2: are billions of dollars and take decades. The ROI just
Speaker 2: is too far, too long, too expensive. The book is fascinating.
Speaker 2: Michael's fascinating. If you're listening this far into the intro,
Speaker 2: it's because you know this is going to be delightful,
Speaker 2: with no further ado. My discussion with Michael Lewis about
Speaker 2: his new book, Who Is Government. Michael Lewis, I don't
Speaker 2: have to welcome you. Let's just jump right into this
Speaker 2: and we'll start with your prior book, The Fifth Risk,
Speaker 2: which is really the predecessor to Who Is Government. Tell
Speaker 2: us about that earlier book on presidential transitions.
Speaker 3: Trump had just been elected for the first time and
Speaker 3: he had fired his transition team, and I didn't I
Speaker 3: learned all this after the fact, but outgoing presidents are
Speaker 3: required by law to prepare a transition, and so the
Speaker 3: Obama administration had deputed one thousand people inside the government
Speaker 3: to prepare where the best course ever given on how
Speaker 3: the government works, and not just the White House, right
Speaker 3: the Department Energy and all those other places. And Trump
Speaker 3: had fired the mechanism for getting the briefings. He fired
Speaker 3: all five hundred and fifty people and told Chris Christy
Speaker 3: that he didn't need to know because he could figure
Speaker 3: out everything he needed to know in an hour about
Speaker 3: how the federal government worked. When I saw this, I thought,
Speaker 3: it's like a great comic premise. I'm going to get
Speaker 3: to roll around the government and get the briefings, and
Speaker 3: the reader will be on the joke that we know
Speaker 3: more about the government than the president does because they
Speaker 3: haven't bothered to learn. And so I and it was
Speaker 3: just sort of like where you start and I and
Speaker 3: they're two things. Where I started, and what kind of
Speaker 3: the spirit in which I did it. The spirit was
Speaker 3: go to places that no one has any idea what
Speaker 3: they do. Like most I mean, I'm surround I'm in Berkeley,
Speaker 3: I'm surrounded by people who talk about politics all the
Speaker 3: time and just want to inflict their political opinions on
Speaker 3: me constantly. But if I ask them, what is the
Speaker 3: Department of Commerce? Do they have no.
Speaker 2: Idea to do commerce? Right? Yeah, some business something.
Speaker 3: What they do is weather, you know, but it would
Speaker 3: never mind. Uh. And but I didn't know that. So
Speaker 3: I just thought, I'm going to go to the places
Speaker 3: that that are most opaque to the American people, and
Speaker 3: so I picked. I picked the Department of Agriculture, Commerce,
Speaker 3: and Energy, and thinking like, if I can make these
Speaker 3: swing on the page, I can make anything swing on
Speaker 3: the page. And Energy, but I started with Energy because
Speaker 3: it was so great. He had appointed Rick Perry, former
Speaker 3: Governor of Texas, to be the Secretary of Energy. And
Speaker 3: Rick Perry had called for the elimination of the Department
Speaker 3: of Energy when he was round for president, like all
Speaker 3: this waste and fraud and the government, we're gonna get
Speaker 3: rid of whole departments. In one of them's department Energy,
Speaker 3: and now he's supposed to run it. He found out
Speaker 3: quickly what I found out when I walked in and
Speaker 3: got the briefings that oh, they run the nuclear stockpile. Oh, oh,
Speaker 3: they gave the loan that created Tesla. You know, Oh, oh,
Speaker 3: this like this one thing after another in it, and
Speaker 3: he had to backtrack in his hearing and saying, oh,
Speaker 3: I didn't mean that, you know, really we need the
Speaker 3: department energy and so so anyway, I don't want to
Speaker 3: go too long about this, but to say that I
Speaker 3: wrote these things in vanity fair long form narrative journalism.
Speaker 3: I stapled them together into the book The Fifth Risk.
Speaker 3: It sold half a million copies.
Speaker 2: That's a lot for a finance book, right, and people
Speaker 2: don't understand.
Speaker 3: It's a lot for a book. This was an indication,
Speaker 3: this was market testing. This was an indication to me that,
Speaker 3: oh my god, people really do actually want to know
Speaker 3: that there is these stories interest me. But it's not
Speaker 3: just me. So I had in the back of that
Speaker 3: in the back of my mind over the last few years,
Speaker 3: because I had this other takeaway from The Fifth Risk,
Speaker 3: and it was although I'd written a lot about what
Speaker 3: these place has done, it was like a travel They
Speaker 3: were like travel pieces. It wasn't till the very end
Speaker 3: in the paperback where I did a deep dive on
Speaker 3: a single character, on a single bureaucrat, and he was
Speaker 3: and I had picked him his name kind of out
Speaker 3: of a jar it was. The material was literary, the
Speaker 3: material was just epic. It was so good. I thought, Man,
Speaker 3: I want to come back and just do more of that,
Speaker 3: like grab people out of the government and just receive
Speaker 3: right about a person I'm going to get. At some point,
Speaker 3: it's gonna the accusation is going to arise. And it
Speaker 3: always does, like, oh, this is just Michael Lewis making
Speaker 3: it up, or this is Michael Lewis with his own
Speaker 3: view or whatever. And uh so I thought, grab a
Speaker 3: bunch of other writers and and I do it with them,
Speaker 3: drop them in, parachute them in wherever they want to go,
Speaker 3: and have them write stories so that you can see
Speaker 3: just how rich and interesting a place this is. And
Speaker 3: that's what that's that idea is what led to who
Speaker 3: is Government?
Speaker 2: So I have to point out what an incredible knack
Speaker 2: you have for finding yourself in the right place at
Speaker 2: the right moment in history. You did it with FTX
Speaker 2: and Sam Bankman Freed in the Pure Luck. Okay, So
Speaker 2: so now you write a book about the transition in
Speaker 2: the first Trump administration, and lots of things you write
Speaker 2: about in the fifth risk turn out to be very
Speaker 2: prescient for how the administration in many different ways. I
Speaker 2: don't want to make a blanket statement about them, but
Speaker 2: in specific area, specific policies kind of drop the ball
Speaker 2: and bad things happen. But the thing that's so fascinating
Speaker 2: is this book about all these different government agencies and
Speaker 2: the really amazing work these people do comes out right
Speaker 2: into the doze elimination of we're going to close the
Speaker 2: Department of Education. We're going to fire all these people,
Speaker 2: whether we have the authority or not. Your timing is
Speaker 2: really exquisite. Twice so you can tell me this is
Speaker 2: dumb luck four times in a row.
Speaker 3: All right, let me try so kinda, but let me.
Speaker 2: Let me at a certain point. I know you're fairly humble,
Speaker 2: and it's not a false humility, but at a certain
Speaker 2: point us readers of your work have to say, hey,
Speaker 2: this guy really sees around a corner, finds an area
Speaker 2: before anyone else has any inkling. Big things are going
Speaker 2: on there, and by the time we realize it, he
Speaker 2: already has the full story out in paperback.
Speaker 3: I love how much more credit you give me than
Speaker 3: I deserve.
Speaker 2: How are you saying it's luck? I don't believe it.
Speaker 3: So if I were trying to explain me how if
Speaker 3: I was trying to give myself some credit for the
Speaker 3: serendipity of my book publication dates, I guess what I'd
Speaker 3: say is that the best way to predict the future
Speaker 3: is just observed very closely the present. So it's close
Speaker 3: observation of what's going on at a moment. And it's
Speaker 3: also the other thing is being interested in the thing
Speaker 3: you're interested in rather than the thing everybody's talking about.
Speaker 3: And so nobody is talking about this, but it's interesting thing.
Speaker 3: That's that's good because it means that it's going to
Speaker 3: be fresh and different. And I guess it maybe it's
Speaker 3: true that when I'm closely observing something I'm really interested in,
Speaker 3: that the world is not all that interested in that
Speaker 3: some of those things end up being the future, and
Speaker 3: that that's true, and so that's but it isn't like,
Speaker 3: you know, you know, all kinds of people who make
Speaker 3: a decent living on the lecture servant circuit being able
Speaker 3: to pretending to be able to tell the future, pretending.
Speaker 2: You were written.
Speaker 3: I've just gotten how not to invest. And I assume
Speaker 3: I will find in this book a chapter about false prognostication.
Speaker 3: We know that you know the future. It's too complicated.
Speaker 3: So all you could tell is the present really well.
Speaker 3: And if you tell the present really well and you're
Speaker 3: not just defaulting to what everybody's talking about in the moment,
Speaker 3: you will get the future sometimes.
Speaker 2: Huh. I love that now.
Speaker 3: It's similar to It's similar to investing. I bet right.
Speaker 3: It's like, Oh, this company really interests me. Why isn't
Speaker 3: any Boddy here? Why isn't anybody investing in it? But
Speaker 3: I'm really interested in it. That's like a great sign
Speaker 3: that you're interested in nobody else has figured it out yet.
Speaker 3: And that's the that's a great sign with writing too.
Speaker 2: So something interests you. What I find fascinating is you
Speaker 2: end up kind of embedding yourself in unfamiliar places and
Speaker 2: fields that you haven't necessarily studied before.
Speaker 3: I don't know anything about it.
Speaker 2: Right like you like? So, by the way, that is
Speaker 2: a sign of a of a curious intellect. Hey, I
Speaker 2: don't know anything about this. I'm going deep down the
Speaker 2: rabbit hole learn. But a lot of these things are
Speaker 2: kind of big institutions that don't trust outsiders, that don't
Speaker 2: trust the media or authors. How do you win these
Speaker 2: people over? I mean, you know twenty twenty is Michael
Speaker 2: Lewis's well known guy. And maybe you have an ability
Speaker 2: to gain the trust of people now, but you've been
Speaker 2: doing this your whole career. How do you win the
Speaker 2: trust and how do you get close to people who
Speaker 2: are skeptical and reserved and holding the public in arms distance.
Speaker 3: So we've seen you've seen how Elon Musk has approached
Speaker 3: government employees over the last sixty days with hostility and
Speaker 3: malice and condescension, and that it's the opposite of the
Speaker 3: way to approach someone if you actually want to learn.
Speaker 3: So I don't have a perfect answer to this, but
Speaker 3: I'll say a couple of things that I think help me.
Speaker 3: One is I'm usually just genuinely curious, Like I really
Speaker 3: have some questions I want to answer. Why are you
Speaker 3: winning baseball games? You know, like, explain it to me.
Speaker 3: How did you figure out to short the market in
Speaker 3: two thousand and seven? How did you figure out how
Speaker 3: to stop coal mine rules from falling in on the
Speaker 3: heads of coal miners? Like I just like, it's like
Speaker 3: something has happened here and you know the answer, and
Speaker 3: I genuinely want to know the answer. People respond to
Speaker 3: genuine curiosity, which is different from I have a theory
Speaker 3: and I want you to sort of dance inside my theory,
Speaker 3: which is like I've sat in a room and I
Speaker 3: decided there's a story here. This is the story. I'm
Speaker 3: just going to gather some quotes to fill in the story.
Speaker 3: Nothing I've done this any good. Is that it's always
Speaker 3: like just a glimmer of an interest and I just
Speaker 3: want to know. And so it creates a natural learning environment.
Speaker 3: That's one. Two. Don't be boring, like if if it's
Speaker 3: if it's tedious for me to show up, like that's bad,
Speaker 3: and which you want almost the opposite. It's like I
Speaker 3: hope he comes because I learned something last time just
Speaker 3: from the questions he asked, and he adds value in
Speaker 3: some other way, like he brings good sandwiches or whatever.
Speaker 3: So no, it's so it's like you want to create
Speaker 3: an incentive system, right, people respond to incentives you want
Speaker 3: to create. You want to make them want you there.
Speaker 3: It's not not just not want you there, it's like
Speaker 3: want you there. So that's that's a second sort of prerequisite.
Speaker 3: And thed is I try to make it clear what
Speaker 3: I'm thinking when I'm thinking it and so I'm not
Speaker 3: hiding like myself from the person I'm writing about. I'm
Speaker 3: letting them get to know me a little bit. If
Speaker 3: I'm letting them bouncing theories off them and listening to
Speaker 3: respond and object or whatever, and so that they don't
Speaker 3: they aren't shocked. They're often shocked when they read the
Speaker 3: book because they're surprised what I've decided is important and
Speaker 3: what isn't. They're sometimes shocked by the way I see
Speaker 3: them or describe them, a little shocked, but they aren't
Speaker 3: shocked by like what I'm interested in. They don't have
Speaker 3: a feeling I'm being sneaky, so that all those help
Speaker 3: I think, and I say this that people I write
Speaker 3: about they often are really interesting people with really interesting stories.
Speaker 3: And while they may not think of themselves and usually
Speaker 3: don't think of themselves as characters, they're very aware they're
Speaker 3: in the middle of something interesting. That's why they're doing it.
Speaker 3: So they can understand why I'm so interested, Like, yeah,
Speaker 3: I get it. I get why you have all of
Speaker 3: a sudden gotten interested in local public health, says Charity Dean,
Speaker 3: because it's broken and that's why we're not responding well
Speaker 3: with this. You know, it's like, or I get why
Speaker 3: Sam bgmanfreed. He understood I thought of him as weird,
Speaker 3: Like you are a weirdo moving through the world with
Speaker 3: a very weird view of the world, and you're seeking
Speaker 3: to impose this sort of abstract idea about how to
Speaker 3: live on the world around you, and I just want
Speaker 3: to watch it. And he's like, yeah, I get that.
Speaker 3: I know I'm weird. I know what's happening is weird,
Speaker 3: and I understand why you're amused by it. Go ahead,
Speaker 3: watch you know that? So that it has to be
Speaker 3: an honest relationship, right, it just has to be an
Speaker 3: honest relationship.
Speaker 2: So I'm curious. You've delved into baseball, into football, into
Speaker 2: high frequency trading, psychology, now government. What what's been the
Speaker 2: biggest surprise that you found in all these areas, Like
Speaker 2: you're delving into things that interest you, But what what
Speaker 2: really sticks out in any of your books where you say, huh,
Speaker 2: didn't see that coming? Not counting SBF getting buss.
Speaker 3: Are you took away the easy one?
Speaker 2: Right? That's how I know I did that on purpose?
Speaker 2: That's the obvious one. Although as as I was reading
Speaker 2: that book, your book going infinite, like like there are
Speaker 2: all sorts of little signposts along the way. I'm sure
Speaker 2: a lot of that's just hindsight biased. But as you
Speaker 2: were writing those chapters that hadn't yet happened, but as
Speaker 2: you're reading it, it's like, oh, this.
Speaker 3: Can't be good.
Speaker 2: You know, all these little little it's like a fault
Speaker 2: line with an earthquake. All these little pressures are building
Speaker 2: up along the book. I don't know if that's intentional.
Speaker 3: Oh, totally intentional. I didn't start writing it until it
Speaker 3: all blew up.
Speaker 2: Oh you didn't, all right, So yeah, it's intention But
Speaker 2: that was an obvious one. What what like? I didn't
Speaker 2: see that coming.
Speaker 3: All right. So here's one from this book. This is
Speaker 3: illustrating a general point. And the general point is the
Speaker 3: difference between what you imagine a story is and what's
Speaker 3: going on in the world. What you're what's going on
Speaker 3: here when you're just doing through abstract kind of speculation,
Speaker 3: compared to when you go out and report and learn
Speaker 3: and collide with the world, And how much more interesting
Speaker 3: the world ends up being than you imagine, even when
Speaker 3: you imagine it being interesting. So the first story in
Speaker 3: this book, Christopher Mark, how do I find it? I
Speaker 3: find it because I get a list of nominees for
Speaker 3: Civil Service Awards. It's like six hundred people on this list.
Speaker 3: How do you pick one of them? It's all these
Speaker 3: names and descriptions of things they've done. Joe Blow with
Speaker 3: the FBI has broken up a child porn ring, but
Speaker 3: doesn't say aything about Joe Blow. I get to a
Speaker 3: name on the list. It says, Chris Mark solve the
Speaker 3: problem of coal mine ruse falling in on the heads
Speaker 3: of coal miners, which killed fifty thousand coal miners in
Speaker 3: the last century. A former coal miner, it says, all right.
Speaker 3: Sitting at my desk, I'm thinking, man, there's a story,
Speaker 3: and IDY think I know what the story is. I
Speaker 3: think the story is all right. This guy probably grew
Speaker 3: up in West Virginia, former coal miner. He's there's gotta
Speaker 3: been some personal if it's killing all these coal miners,
Speaker 3: and he got out of the coal mine to fix it.
Speaker 3: A friend, a relative, someone got killed by a coal mine.
Speaker 3: He that it was like there's a movie in this
Speaker 3: kind of I already had it into my head, but
Speaker 3: then I call him up. I find him. He lives
Speaker 3: in Pittsburgh. He knows who I am, because he's read Moneyball.
Speaker 3: He's like, why the hell you calling me? Like it
Speaker 3: was just bizarre, Like he took me a while to
Speaker 3: believe it was me. And I said, I just like
Speaker 3: I saw this line on a list. He didn't even
Speaker 3: know he'd been nominated for a prize, so it was
Speaker 3: especially weird. And I said, I said, like, I just
Speaker 3: just give me the five minute summer of your story.
Speaker 3: And he says the first thing A's mouth is, I
Speaker 3: grew up in Princeton, New Jersey, and my dad was
Speaker 3: a professor at the university. I thought, oh, there goes
Speaker 3: my story.
Speaker 2: Right, so much of presumptionswhe for the movie, right, well,
Speaker 2: but hold on.
Speaker 3: In the next ten minutes, he tells me this he
Speaker 3: had been a radical in the sixties as a little kid,
Speaker 3: radically I started calling throwing around words like bourgeois at
Speaker 3: his father said that he was like, didn't want to
Speaker 3: join the ruling class, didn't want to go to Harvard,
Speaker 3: which he could have, and leaves high school early to
Speaker 3: go join the working class, much to his father's chagrin.
Speaker 3: Like his father really upset. His father is a famous guy,
Speaker 3: I mean in his world. Robert Mark, Robert Mark, was
Speaker 3: a civil engineer who took technology he used to like
Speaker 3: stress test fighter planes for the Air Force and nuclear
Speaker 3: reactors for Princeton. He took it and used it to
Speaker 3: figure out to stress test Gothic cathedrals. He built little
Speaker 3: models of like sharks and rim and he could show
Speaker 3: what was holding the roof up basically, and he could
Speaker 3: also show why it might collapse and where it was weak.
Speaker 3: And so he actually taught all architectural historians how the
Speaker 3: medieval builders had built the Gothic cathedrals. And there's actually
Speaker 3: documentaries about him in this so anyway, that's his dad.
Speaker 3: Chris rebels against his dad, not gonna have anything to
Speaker 3: do with your way of life, not having to do
Speaker 3: anything with you, ends up working in an auto factory,
Speaker 3: in a ups plant, and finally in a coal mine
Speaker 3: in West Virginia. He ends up with like his fellow
Speaker 3: Young Radicals, nineteen years old, working in a coal mine.
Speaker 3: The Young Radicals last like a day because it's so awful.
Speaker 3: Chris actually likes the working in the coal mine, He's
Speaker 3: interested in it, but it's incredibly dangerous. He almost is
Speaker 3: killed twice by falling roofs. Eventually figures I could get
Speaker 3: out of this and figure out how to stop this.
Speaker 3: He goes back to Penn State, gets his degree. Then
Speaker 3: he's got his own intellectual journey, right. This is which
Speaker 3: I don't get into. While I'm talking to him in
Speaker 3: this first phone call, he says, it took, you know,
Speaker 3: took thirty years, but I figured out how to keep
Speaker 3: the roofs of coal mines from falling on the heads
Speaker 3: of coal miners. And I say, oh, so you tell
Speaker 3: me get your dad who was figuring out how the
Speaker 3: rooms of goth The cathedrals didn't fall down, and you
Speaker 3: just do the same thing underground. You figure out like
Speaker 3: how to keep the roof of a coal mine up.
Speaker 3: And he in the first twenty minutes, he's pissed at me.
Speaker 3: He says, I have nothing to do with my dad.
Speaker 3: It has nothing whatsoever to do with what my father did.
Speaker 3: And I thought, oh my god, this is even better
Speaker 3: than I thought. It's a father son's story, and the
Speaker 3: son thinks he's rebelling against his father, and in fact
Speaker 3: he goes and sort of lives out a different version
Speaker 3: of his father's life. And what's wild about the story.
Speaker 3: So I have that thought, and when I start to
Speaker 3: get to know him. It takes a while before he
Speaker 3: says to me, like days of spending time with him, Oh,
Speaker 3: and my dad and I finally kind of collaborated. I
Speaker 3: said what, and he says, yeah, yeah. The government called
Speaker 3: my father because they thought the National Cathedral in Washington
Speaker 3: was falling down. And I don't know that National Cathedral
Speaker 3: in Washington was built over a centuries tilted. They what
Speaker 3: happen was they built insufficient foundation for what they redesigned
Speaker 3: on top of it. And the father is brought into like, oh, Jesus,
Speaker 3: can you tell us how to keep this thing from falling?
Speaker 3: And the father gets there and realizes the problems underground,
Speaker 3: and so he has to call his son, and together
Speaker 3: they write a paper explaining why it's not going to
Speaker 3: you know, how it's all working and why it's probably
Speaker 3: not going to fall down. But it's beautiful. It's absolutely beautiful,
Speaker 3: like an amazing story, and it was so different from
Speaker 3: what my feeble imagination had dreamed of. And this happens
Speaker 3: over and over and over and over.
Speaker 2: You know the most amazing thing about that chapter And
Speaker 2: we'll talk about the book in more detail in a
Speaker 2: few minutes. You kind of buried the lead in your discussion.
Speaker 2: He is studying this problem for thirty years, like this
Speaker 2: isn't like he keeps coming back to it. This is
Speaker 2: three decades of his life, and he eventually figures it out.
Speaker 2: Issues like a set of guidelines to coal companies and
Speaker 2: every engineer and every safety person in every coal mine
Speaker 2: that now becomes the standard. Plus the government makes it
Speaker 2: a regulatory requirement. And it wasn't that. Oh, the free
Speaker 2: market figured this out. But for the regulations, we would
Speaker 2: still be having all these coal mine collapses.
Speaker 3: What's wildly cool about Christopher Mark is it not only
Speaker 3: does he do all this, he becomes the historian of
Speaker 3: his own subject. He becomes and he writes these papers
Speaker 3: explaining why coal mine safety was so poor, and he
Speaker 3: finds the whole world in this very narrow subject. And
Speaker 3: there's a moment that's actually really interesting where he shows
Speaker 3: that the technology had been created to actually just prevent
Speaker 3: a lot of the disasters. And the coal mine industry was.
Speaker 2: Talking about the ceiling, the roof bolts the boats.
Speaker 3: You bolt the roof to itself. It's not intuitive like
Speaker 3: when they first started doing it, the miners like, what
Speaker 3: the hell, how you going to bolt the roof to itself,
Speaker 3: but you both you drill. Essentially you're attaching more less
Speaker 3: unstable rock to deeper, more stable rock, and you anchor
Speaker 3: it in what's in the mountain above it. But I mean,
Speaker 3: this is a long time ago. This is invented fifty
Speaker 3: sixty years ago or whatever. But instead of using the
Speaker 3: technology properly, like in a way that really prevents reduces
Speaker 3: roof falls, the industry uses it to make it cheaper,
Speaker 3: to make it just as safe as it's always been,
Speaker 3: meaning not safe. So they maintain the same level of mortality,
Speaker 3: like the same level of risk. It's just less cost
Speaker 3: and just reducing the cost of what they're doing to
Speaker 3: hold the roof up. And so what they've done, and
Speaker 3: it's because it's because the industry was so competitive that
Speaker 3: nobody could take this step of making the extra expense
Speaker 3: of making the mind really safe. And they had acclimated
Speaker 3: the working guys in West Virginia mainly, but the coal
Speaker 3: miners who work everywhere in the country to this level
Speaker 3: of risk, so they were just used to it. It
Speaker 3: was really interesting that the market. You would think, if
Speaker 3: you were sitting in a room alone thinking about it,
Speaker 3: you think, oh, some coal mine company is going to
Speaker 3: make their mind safer, and that's going to make it
Speaker 3: easier to tract workers less expense because the roof is
Speaker 3: not falling in as much. But no, that's not what happened.
Speaker 3: You're familiar with.
Speaker 2: You're familiar with the Peltzman effect. Does that ring a bell?
Speaker 3: No, tell me what it is?
Speaker 2: Soo, Sam Peltzman, And this is in twenty forty my
Speaker 2: next book. Sam Peltzman's a guy who studies seat belts
Speaker 2: and air bags and abs and all that stuff, and
Speaker 2: what turns out to happen is exactly what happened with
Speaker 2: the coal mine. Oh, as soon as you get a
Speaker 2: seat belt and an air bag, you're driving. Oh, this
Speaker 2: car feels solid and safe. So I could drive a
Speaker 2: little faster. And so we have all the safety equipment
Speaker 2: that keeps getting built into cars, and yet the fatality
Speaker 2: rates don't drop. It's not that we're all going to
Speaker 2: just do fifty five and with that much safer, all
Speaker 2: this great crumple zones and lane detection and all these things.
Speaker 2: They make us complacent and comfortable, and so we drive faster,
Speaker 2: and the fatality rates are the same. So you can
Speaker 2: either maintain the same behavior and have the fatality rate drop,
Speaker 2: or like drivers and coal mine companies, you could have
Speaker 2: the same fatality rate but with a whole lot more
Speaker 2: speed and or coal mining. It's a fascinating psycholophal Then.
Speaker 3: What is I want you to apply that effect to investing?
Speaker 3: What's the aversion of the the Peltzman effect.
Speaker 2: I think what it really is about is the broader
Speaker 2: picture is unintended consequences. You think, when the seat belt
Speaker 2: laws are passed, the result will be we'll have fewer
Speaker 2: deaths and safer vehicles. But instead the actual unintended consequence
Speaker 2: is that people dress drive faster. So from investing perspective,
Speaker 2: you know, Paul Volker famously said there have been no
Speaker 2: other than the ATM, there's been no innovations in finance,
Speaker 2: But there actually have been between ETFs and online trading,
Speaker 2: and now trading is free, and I in the book,
Speaker 2: I go through a whole long list and what ends
Speaker 2: up happening, and now you have the gamification of robinhood.
Speaker 2: So instead of making things cheaper and easier and faster
Speaker 2: for investors, we're still encouraging, or at least the industry
Speaker 2: is encouraging many of our own worst instincts and of
Speaker 2: course the outcomes. Instead of saying, hey, I could buy
Speaker 2: an ETF and buy the whole market for three BIPs
Speaker 2: and it costs me nothing to trade and wow, isn't
Speaker 2: that great? Instead of doing that, a lot of people say, oh,
Speaker 2: I could day trade. I could you know, jump in
Speaker 2: and out of Nvidia. This is a this is great.
Speaker 2: It is the airbags, abs and seatbelts of investing. And
Speaker 2: instead of taking the win, we just keep pushing our risk.
Speaker 2: Aversion slides up with the lack of friction.
Speaker 3: That the greater the illusion of safety we create in
Speaker 3: the markets, the more people, the more recklessly the people.
Speaker 2: Behave, especially if you're in the midst of a bull market. Yeah,
Speaker 2: because at that point, hey, markets only go up, that's
Speaker 2: all they do. So I say this to you all
Speaker 2: the time and you push back, But I got to
Speaker 2: bring it up again. All of the characters in the
Speaker 2: book are very Michael Lewis. They're all outsiders, they're quirky,
Speaker 2: they're pushing against the grain because they've discovered some great
Speaker 2: out of consensus. True, you've disagreed with that description before.
Speaker 2: Has this book changed your mind? Because it's even the
Speaker 2: chapters you didn't write are still Michael Lewis characters.
Speaker 3: All right, so I want you to all right, I'm
Speaker 3: going to push back again. These writers who did this
Speaker 3: with me are some of my favorite writers on the planet.
Speaker 2: And they are all excellent.
Speaker 3: So only just name them so people know. It's Dave Eggers,
Speaker 3: Geraldine Brooks, cam Al Bell, Casey Sepp, Sarah val and
Speaker 3: John Lanchester. So John Lanchester English writer, and they all
Speaker 3: have they were I picked them one because they're all fun,
Speaker 3: two because they're all able to kind of go in
Speaker 3: and find stories that other people don't see. And three
Speaker 3: their voices are so different from each other. I thought
Speaker 3: they'd find very different things. John Lanchester, he doesn't find
Speaker 3: a person. He finds the Consumer Price Index. The whole
Speaker 3: chapter about I just found riveting about what the United
Speaker 3: States does to count things. And then the United States
Speaker 3: government is like the greatest counting mechanism in the world.
Speaker 3: And then it's that it's the one democracy where counting was.
Speaker 3: It was it was built into the constitution. You couldn't
Speaker 3: distribute power unless you had a census to count where
Speaker 3: the population was. And he says as example, he and
Speaker 3: how complicated this is and how much you know how
Speaker 3: much expertise is deployed within the government to do it well.
Speaker 3: He explains over many pages how the consumer Price Index
Speaker 3: is put together. So right there, there you go. There
Speaker 3: is something that I that is not a Michael Lewis character.
Speaker 2: That's the exception that proves the rule. And I'm gonna
Speaker 2: I'm gonna put this back.
Speaker 3: Exceptions don't prove rules. Just so you know, exception when
Speaker 3: that that expression means it tests the rule, okay, And
Speaker 3: so that I just tested your rule. So you gave
Speaker 3: me again.
Speaker 2: You gave me the one chapter that wasn't a Michael
Speaker 2: michael Lewis character. So the conversation we just had about
Speaker 2: Christopher Mark and the coal mines, Oh my god, how
Speaker 2: is he not a total Michael Lewis Right, next chapter
Speaker 2: and you didn't write this. I think this was Casey
Speaker 2: Seff's chapter about Ronald Walters and the National Cemetery Administration.
Speaker 3: For this is a little bit of a cheap because
Speaker 3: Casey asked me if I had anything back them on
Speaker 3: the cut she had She said, we said, do you
Speaker 3: have anything on the cutting room floor from the fifth risk?
Speaker 3: And I had all this stuff on the cutting room
Speaker 3: floor because there was so much stuff, and I said,
Speaker 3: you know, there is this dude who wouldn't take my calls,
Speaker 3: like I couldn't get him really, Oh yeah, no, it
Speaker 3: was it was like they didn't want to and I
Speaker 3: of course was going through communications as officials, and they
Speaker 3: don't never respond properly. But his name was Ron Walters.
Speaker 3: And what I knew was this that they're inside the
Speaker 3: Veterans Administration. There's something called the there's a function, the
Speaker 3: management of the National Cemeteries where we bury our war dead,
Speaker 3: we bury our veterans. It is a sacred duty of
Speaker 3: the society. And that this that, like all the functions
Speaker 3: of the all the different ages and sees, this place
Speaker 3: has its customer satisfaction measured by survey and that when
Speaker 3: Ron Walter came into the job of running the National Cemeteries,
Speaker 3: it had very mediocre customer satisfaction. I don't know why.
Speaker 3: I don't know what was going on. I don't know
Speaker 3: anything in the story. Casey wrote the story, but that
Speaker 3: over a couple of decades he took the place from
Speaker 3: being kind of mediocre to having the highest customer satisfaction
Speaker 3: of any institution in America, private or public. That includes Costco, Walmart, FedEx.
Speaker 3: He somehow figured out the problem, and no one knew
Speaker 3: he was. He didn't advertise himself. If he had done
Speaker 3: this in business, he'd be like on the cover of
Speaker 3: business magazines and giving lectures for money on the lecture circuit,
Speaker 3: you know that. But he he was just a faceless
Speaker 3: bureaucrat who would figure something out. And I said to
Speaker 3: Casey go, I'd write about him, And for whatever reason,
Speaker 3: he took her call and she and she she walks
Speaker 3: us through his story.
Speaker 2: First of all, that that chapter made me cry. Number one.
Speaker 2: It's incredibly touching, and it makes you proud to be
Speaker 2: an American. It really I know that's corny, but it
Speaker 2: really does. But all right, so that's a cheat.
Speaker 3: Let me so the next one, Dave, it's probably Dave Eggers.
Speaker 3: Dave Eggers, and he goes and finds the people in
Speaker 3: Nasau who looking for little green men in deep outer.
Speaker 2: Space, oh searchers.
Speaker 3: Yeah, all right, so maybe not a little green men,
Speaker 3: they're looking for life out of it.
Speaker 2: Well, and the fascinating thing is we're going to clearly
Speaker 2: find the first line I highlighted in all likelihood in
Speaker 2: the next twenty five years we'll find evidence of life
Speaker 2: on another planet. I want to say this because I'm
Speaker 2: not a scientist and I don't work in media relations, Vanessa.
Speaker 2: What he's talking initially about is not intelligent star trek,
Speaker 2: star wars life. But hey, there's hydrogen, carbon, oxygen, nitrogen everywhere.
Speaker 2: Those are the fundamental building blocks. And we'll find some
Speaker 2: bacteria somewhere.
Speaker 3: You know what they're gonna find. They're going to find
Speaker 3: the Peltsman effect. You're gonna find somewhere way out there.
Speaker 3: They're gonna someone will have discovered the Peltzman effect. But
Speaker 3: the yes, so Dave, so, how Dave? So, Dave is
Speaker 3: working with these characters? I thought Dave I told Dave this, Uh,
Speaker 3: just the other day that Dave when he announced he
Speaker 3: was doing Nasau and these people who were doing this
Speaker 3: incredibly cool work at the Jet Propulsion Lab in California.
Speaker 3: Geraldine Brooks, another the writer, said, Yep, Dave is way
Speaker 3: too talented to do this. This is such an easy
Speaker 3: thing to make interesting. He needs to pick something that's
Speaker 3: harder to write about. That this was. She thought he
Speaker 3: was cheating, that it was just like, of course, everybody's
Speaker 3: gonna love to read about this and Geraldine said to him,
Speaker 3: said to me, to say to him, if he does that,
Speaker 3: I'm going to find the most repulsive government worker to
Speaker 3: write about. I'm going to go into the IRS, the
Speaker 3: most hated, loathed branch of the government, and I'm gonna
Speaker 3: write about the IRS. So she did that in response
Speaker 3: to Dave's piece. And she does do that so that
Speaker 3: I wouldn't. I mean, Dave has more Those characters are
Speaker 3: not characters I would have naturally sought out. They are characters.
Speaker 3: So as he puts it, he was like, he has
Speaker 3: no scientific aptitude. He like he stopped doing math and
Speaker 3: science when he was like seven years old. He's a
Speaker 3: poet at heart. So he finds it riveting when when
Speaker 3: scientists can make comprehensible to him complicated stuff they're doing.
Speaker 3: And he had found these people and they could explain
Speaker 3: in a way, he could explain how they were doing
Speaker 3: what they were doing. And it is riveting.
Speaker 2: But but it's also very Michael Lewis, these are quirky.
Speaker 2: You know, these are very quirky characters.
Speaker 3: All Right, I'm gonna push back.
Speaker 2: I'm right, But before you push back, you just brought
Speaker 2: up Geraldine Brooke Brooks and the cyber sleuth in the IRS.
Speaker 2: Here's a guy who's an accountant, teaching classes in Brazilian
Speaker 2: jiu jitsu and like like becoming a ninth level black
Speaker 2: Like that is not your run of the mill. I
Speaker 2: need your papers to get your taxes filed.
Speaker 3: No, he'd he works in the cyber crime division of
Speaker 3: the I R S and has collected billions of dollars
Speaker 3: for the government busting up cyber crime rings. Jared Coopman
Speaker 3: his name. And here's here's a kicker for you. His unit,
Speaker 3: which is like a huge profit maker. They I mean,
Speaker 3: they cost nothing and they generate billions. Has been gutted
Speaker 3: by Doge in any case, but this is before it
Speaker 3: was gutted. Geraldine found this dude. I don't know how
Speaker 3: she found him. Actually she just went off. She said,
Speaker 3: I'm going in the IRS and I'm coming out with
Speaker 3: a story. And so she went into the IRS and
Speaker 3: found him and and called me. You know, it's funny
Speaker 3: she did call me, So this is not pushing back
Speaker 3: on you. When she was done with the story, she
Speaker 3: had to go back to a novel she was writing
Speaker 3: kind of thing, and she said, this is such your
Speaker 3: kind of story. She said, there's there's all this stuff
Speaker 3: behind it. You really need to look into it, like
Speaker 3: it might be a book for you. So she had
Speaker 3: the thought she'd run into a story that I might
Speaker 3: have written, and that might be true there. But here's
Speaker 3: what I'm going to. Let me say this. Maybe I'm
Speaker 3: so jazzed by our federal government because when you walk
Speaker 3: into these places, they're all these really curious characters doing
Speaker 3: really curious things, and you haven't heard of them, and
Speaker 3: you might not think they're important until you do. And
Speaker 3: they are characters in the best sense. They don't think
Speaker 3: of themselves as characters. They just like they are who
Speaker 3: they are, and they can be kind of shockingly interesting
Speaker 3: without realizing how interesting they are, and that the stuff
Speaker 3: they're doing is breathtakingly important, like existential risk level of importance.
Speaker 3: So yes, I'm interested in that. And they're all over
Speaker 3: the government. And I think that if you said you
Speaker 3: have to spend the rest of your career wandering this
Speaker 3: institution writing about these people, I could pull it off.
Speaker 3: That I could. I I could. I could use it
Speaker 3: as a launch pad for every other book I ever wrote.
Speaker 3: If I had to.
Speaker 2: You mentioned dosee. One of the things that comes up
Speaker 2: in the book in her chapter is these guys that
Speaker 2: are literally saving tens of billions of dollars in cyber fraud.
Speaker 2: They're paytops out at like one hundred and thirty thousand
Speaker 2: dollars something crazy, Like any one of them could go
Speaker 2: to a Wall Street bank and ten x their salary.
Speaker 3: Yep.
Speaker 2: Like, stop and think about how insane that is. And
Speaker 2: we got to cut those jobs and.
Speaker 3: Then we don't. Yeah that you fire them, and not
Speaker 3: only that, you insult them before you fire them, give
Speaker 3: me a list of the five things you did last week.
Speaker 3: You know. It's just it's obscene what's going on right now.
Speaker 3: And that's one of that that would be a place
Speaker 3: where you would dramatize some of the obscenity. Yeah. So
Speaker 3: I don't think there's a character in the book that
Speaker 3: couldn't be paid a whole lot more money outside of
Speaker 3: the federal government. And this is another thing. I think
Speaker 3: this is between the lines of the book. But all
Speaker 3: these people are much more interested in mission than money,
Speaker 3: and this is hard for Wall Street people to get
Speaker 3: their minds around sometimes. But I don't think entirely there
Speaker 3: are a lot of Wall Street people who really get
Speaker 3: the joy of mission. And these are people who are
Speaker 3: taking pay cuts because they want to do this thing.
Speaker 3: And nobody says this in any of the chapters, but
Speaker 3: I think all of the chapters say this. All these
Speaker 3: people have found the secret to a meaningful life. They've
Speaker 3: all they None of these people on their deathbeds are
Speaker 3: going to look up and say, well, I wish I
Speaker 3: wish I'd gone to Goldman, you know that I wish
Speaker 3: I'd made a whole lot of money. That they all
Speaker 3: full feel like they did what they were supposed to do,
Speaker 3: and that that's kind of cool.
Speaker 2: Uh.
Speaker 3: There is this thing going on how to lead your
Speaker 3: life right through it, right through the whole book. And
Speaker 3: I and as a moment when I'm talking to Chris Mark,
Speaker 3: who I mean, one of the reasons I find it
Speaker 3: hard to report Chris Mark, the coal mine guy, is
Speaker 3: that you know, he won't stay in the Ritz, They'll
Speaker 3: stay in the hampton In. So I got to stay
Speaker 3: in the hampton In. You know, you know, he wants
Speaker 3: to sit in the back of the plane, so I
Speaker 3: got to sit in the back of the plane. And
Speaker 3: so you know it's like that I have, you know,
Speaker 3: a standard of comfort. I've gotten used to that he
Speaker 3: finds like immoral, maybe too strong a word, but like unnecessary.
Speaker 3: And at one point he said to me, and I
Speaker 3: put it in the book because he has decided to
Speaker 3: live a life that's materially modest but spiritually rich. He
Speaker 3: said to me. We taught our kids there there are
Speaker 3: two ways to be rich. One is to make a
Speaker 3: lot of money, and the other one is to not
Speaker 3: need very much. And I just thought, wow, you know,
Speaker 3: it's interesting.
Speaker 2: Say what you will about the luxury quality of the
Speaker 2: Hampton end. It ain't a coal mine if you spent
Speaker 2: and he spends a year or two working in a
Speaker 2: coal mine. Wait, I'm above ground on clean sheets, with
Speaker 2: air conditioning and heat.
Speaker 3: And a peloton. Now, I couldn't believe it. There's a
Speaker 3: peloton in there.
Speaker 2: By the way. When I first saw this title, I
Speaker 2: picked up the book and I'm like, huh, I wonder
Speaker 2: if Michael is going to get a little partisan. This
Speaker 2: is one of those things that could really red state
Speaker 2: blue state. But there's none of that. This is all
Speaker 2: about you pay taxes and here's what the government does
Speaker 2: to serve you. Whether you're the family of a deceased
Speaker 2: veteran or relying on weather forecasts, or stopping cybercrime, or
Speaker 2: you know, on and on it goes. These are really broad,
Speaker 2: non partisan topics. Did did it ever enter your mind? Oh,
Speaker 2: someone's gonna accuse me. Oh that that punk Berkeley rider
Speaker 2: is really a libtard and we really don't care what
Speaker 2: he has to say. Did that ever enter your mind
Speaker 2: as you were putting this together?
Speaker 3: Of course, I mean it was, It was top of mind,
Speaker 3: but in a way, I mean because it has happened
Speaker 3: already and it will happen that you It is a
Speaker 3: feature of our society right now that everything gets quickly politicized,
Speaker 3: and you're either you're either in tribe or tribe tribe b.
Speaker 3: You're either you're either an Ole miss rebel or Alabama
Speaker 3: Crimson Tide player. You know, it's it's you're you're on
Speaker 3: one team or the other. That people need to need
Speaker 3: to see you that way, especially the people who are
Speaker 3: most absorbed with the politics. And if you write anything,
Speaker 3: the challenge is the assumptions, prejudices, bigotry of one side
Speaker 3: or the other. They're going to try to dismiss it
Speaker 3: by just saying you're a member of the other tribe.
Speaker 3: So I can't you just can't do anything about that
Speaker 3: except try to come at the material pure of heart
Speaker 3: and open to mind. You know, it's like, these are
Speaker 3: stories that are true stories. You can maintain your prejudice
Speaker 3: and bigotry and whatever you think of federal workers. You
Speaker 3: know you could if you want to preserve that stereotype
Speaker 3: in your head. Fine, but you've got to acknowledge the
Speaker 3: truth of the stories, Like, Okay, all federal workers are wasteful.
Speaker 3: Where do you put Chris Mark? Then he just he'es
Speaker 3: saving thousands of lives of working classmen based Uh, what
Speaker 3: do you do with that? So what do you do
Speaker 3: with this and that and the other thing? I mean,
Speaker 3: there's so many of these stories.
Speaker 2: So on and on.
Speaker 3: It, So it's almost I'd say it's I think this
Speaker 3: is true that to the extent you succeed in really
Speaker 3: threatening either sides prejudices, you're going to elicit a violent reaction.
Speaker 3: And so I expected the book, given the current moment
Speaker 3: where Elon Muskindoz is trying to basically fire all these people, uh,
Speaker 3: that it would elicit a violent reaction. And I've stayed
Speaker 3: off social media. I don't know exactly how much of
Speaker 3: the violent reaction has happened. Uh, but I've gotten whispers
Speaker 3: of it, like and and it's funny. I think it's
Speaker 3: funny to find myself. I do live in Berkeley, and
Speaker 3: people love to bring that up when they're trying to
Speaker 3: classify me. But in Berkeley, i'd be a Republican, you know,
Speaker 3: I mean, I mean that's not hard.
Speaker 2: But you originally from red I grew.
Speaker 3: Up in New Orleans. I'm like a kid who I'm
Speaker 3: like a kid who played sports and didn't think about
Speaker 3: politics and and like voted for Reagan once and like
Speaker 3: John McCain was a close friend. And it's like the
Speaker 3: idea that I'm like, oh, firmly, this lefty person is insane.
Speaker 3: It's just insane. I mean it's and it's it's a
Speaker 3: tell for me when people try to shove me into
Speaker 3: that box, because it means they're not dealing with the story.
Speaker 3: And it happens from the other side, the blind side.
Speaker 3: There's the whole the crazy left has taken the blind
Speaker 3: side story is like, oh, Michael's like a racist who's
Speaker 3: told a white savior story.
Speaker 2: Seriously, I've read all about that.
Speaker 3: Listen, No, it's amazing.
Speaker 2: How many times have you and I just got to
Speaker 2: be like our eighth tenth interview, I have lost track
Speaker 2: when I'm prepping stuff and I have my research assistant
Speaker 2: go out, hey, find me something I haven't we haven't
Speaker 2: talked about in these previous eight conversations. Well, you know,
Speaker 2: the pushback to the blind Side is the whole story
Speaker 2: is fake and and here's the litigation and he's the depositions,
Speaker 2: and I'm like, yeah, I'm sorry, I'm not buying into this.
Speaker 2: This is this is clearly someone has a grudge.
Speaker 3: Yeah, but so but but I mean, the New York
Speaker 3: Times ran a cover story like a year. It's like
Speaker 3: trying to trying to sort of I don't know exactly
Speaker 3: what it was trying to do, but it is between
Speaker 3: the lines, was trying to say, like the story. Now,
Speaker 3: now looking back on it, we can say the story
Speaker 3: was false in some way. No one who was there
Speaker 3: at the time disapproved of the stories. When the book
Speaker 3: came out, Michael Lor himself loved the book. All everywhere
Speaker 3: around him said this like true, great true story. You know,
Speaker 3: there was never it's been. It got reinterpreted at High Woke.
Speaker 3: It got reinterpreted as a condescending story about a young
Speaker 3: black boy, which is not what it was.
Speaker 2: You're, by the way, being generous to the people who
Speaker 2: have changed. Your friend, Malcolm Gladwell would clearly call it
Speaker 2: revisionist history, because oh, we gonna We're going to rethink
Speaker 2: this in light of current moras.
Speaker 3: And but that's all flipped again. So it's it's it's gonna,
Speaker 3: it's gonna make it come. It's there's this, there was
Speaker 3: a revolution to counter revolution and the counter counter revolution.
Speaker 3: It's it's. But my point is that that I have
Speaker 3: had my work filtered through people's bizarre, perverted political prisms,
Speaker 3: and uh.
Speaker 2: It happened last book Going It.
Speaker 3: Gets it gets distorted, My views get misrepresented to the
Speaker 3: extent I have views that mostly it's not an expression
Speaker 3: of you. It's a telling of a story that I'm doing.
Speaker 3: And I've had it from both sides, and it's not
Speaker 3: pleasant from either side. And this one it was really
Speaker 3: clear the side it's where the blow blow back is
Speaker 3: gonna come is from the from the right. Now here's
Speaker 3: it's funny. I have a little suspicion. I feel like
Speaker 3: a little uncomfortable at at preaching to the converted at
Speaker 3: cheap applause. I'm now finding myself on stages with this book,
Speaker 3: and of course the audience is all kind of on
Speaker 3: its side. The audience is all often liberal people, federal workers,
Speaker 3: and you know, I have them at hello, and I
Speaker 3: don't particularly like that. I mean, it's better than having
Speaker 3: if I don't even hate you. But I want people
Speaker 3: to just like the story, like judge it by the
Speaker 3: quality of the thing, rather than judge it by whether
Speaker 3: it confirms your prejudices. Uh. And that that's and it's
Speaker 3: just increasingly this is coming that's changed in my my
Speaker 3: literary career, in my life. It's getting harder and harder
Speaker 3: to pierce people's prejudices that they're so they come in
Speaker 3: so armored with some opinion that's very half baked that
Speaker 3: they have possibly even uttered themselves on social media, so
Speaker 3: that they've they've sort of like they're anchored in it
Speaker 3: and they don't want to they don'tant to even think
Speaker 3: about anything different than what they've said. Uh. And so
Speaker 3: you're you've got this, You've got an army of kind
Speaker 3: of prejudice readers that you that you have to deal
Speaker 3: with it. It's just louder than it's ever been and
Speaker 3: makes it hard to get the story told.
Speaker 2: What's really ironic is that a lot of the people
Speaker 2: who are the beneficiaries of a lot of the government
Speaker 2: work coal mine. Most obvious is they're in red states,
Speaker 2: and so there's a little there's a little bit of
Speaker 2: craziness with that. But let's talk about the process of
Speaker 2: the book. The eight or nine chapters you write, the
Speaker 2: first one, you write, the last one, and then the
Speaker 2: middle six are the six writers you mention, I don't
Speaker 2: really think of you as an editor. I think of
Speaker 2: you as a writer. What was that like, having not
Speaker 2: only to edit this but edit friends.
Speaker 3: What I did was talk them into doing it. I
Speaker 3: recruited them and I talked to them about what stories
Speaker 3: that they might write. But after that I left everything
Speaker 3: to David Shipley, who.
Speaker 2: Oh sure I know David.
Speaker 3: And and who's former Bloomberg editor and so so I
Speaker 3: didn't have to do any of the line and I
Speaker 3: didn't touch anybody's pieces. I kept I kept great distance
Speaker 3: from that, and most of them didn't need that. A
Speaker 3: couple couple did I do. I have often engaged with
Speaker 3: other writers and having them bounce their stories off me
Speaker 3: and talk about how they might do it. Do it
Speaker 3: so that that's easy for me and fun. And all
Speaker 3: these writers were kind of spoiled for choice. It wasn't
Speaker 3: like throwing up their hands and saying, what am I
Speaker 3: going to write about? I don't have a story. It
Speaker 3: was more should I do A or B or C?
Speaker 3: So that that book was fun, really fun. I can't
Speaker 3: tell you how easy this thing was. I mean, it's
Speaker 3: it's it's it's surprising. I thought when I involved, I
Speaker 3: was a little trepidacious about involving other writers because they're
Speaker 3: all neurotic, you know that you never know what you know,
Speaker 3: it's hurting cats, you never know what they're going to
Speaker 3: do or they're going to show or uh. And everybody
Speaker 3: hit their marks and we're kind of Nobody was trub
Speaker 3: they were all They all did what they were supposed
Speaker 3: to do and and and I did you know? That
Speaker 3: was the other thing, you know, The moment, the gut
Speaker 3: check moment for me was I got them all riled up.
Speaker 3: Are they going to be these great stories? Go do it?
Speaker 3: And then I realized, oh, I got to write something.
Speaker 3: And finding my I thought, oh, it's going to be
Speaker 3: tough for me to like rise to this occasion again.
Speaker 3: And I found I think these are two of the
Speaker 3: more interesting long form narrative stories I have ever written.
Speaker 2: And they are and that's saying something.
Speaker 3: It is saying. I mean, I've had some great material.
Speaker 3: I think the material I'm always good as my material, right,
Speaker 3: I can't make I can't put in with God left.
Speaker 2: Out, agreed and disagree.
Speaker 3: Oh it's true, though, It's true. If you I really,
Speaker 3: if I have boring, really bad material, it wouldn't be
Speaker 3: very good. But this case, the ingredients were there for
Speaker 3: excellent meals and uh, and it just they turned out beautifully.
Speaker 3: I'm just really proud of them, you know.
Speaker 2: I love that feeling of like I don't know how
Speaker 2: this is gonna when you start, I'm intrigued by this.
Speaker 2: I don't know where it's going to go. And then
Speaker 2: when you're done, it's like, oh, this turned out like
Speaker 2: I thought this was a good idea, and hey, this
Speaker 2: turned out even better than unexpected. It really is a
Speaker 2: lovely sensation.
Speaker 3: As it is, it is a completely lovely sensation. And
Speaker 3: the whole book, when I look back on it, it
Speaker 3: feels like the whole group was in a flow state,
Speaker 3: that the whole group, everybody, nobody over nobody ever thought it.
Speaker 3: People just went and did what they did. They played
Speaker 3: their best game and I did too, and so it
Speaker 3: was it was really gratifying. And it's had the response
Speaker 3: to it. I mean, of course now with what's going on,
Speaker 3: but you know, most of them appeared in the Washington
Speaker 3: Post over running up to the election, and the response
Speaker 3: was just I remember the letter after the first one,
Speaker 3: the woman who adds the the comment section said, I've
Speaker 3: never seen anything like this. Really, yes, I mean it
Speaker 3: was just just exploded. And this is all before Trump's elected.
Speaker 3: And now the thing's all together in one piece, in
Speaker 3: one place in the the you know, there's this deconstruction
Speaker 3: of the government going on. It sits in the middle
Speaker 3: of the conversation. I mean, it's like it that the
Speaker 3: world is smiling upon this work. There's no question, there
Speaker 3: is no question.
Speaker 2: It could not possibly be more timely. I know I
Speaker 2: only have you for a limited amount of time. There's
Speaker 2: two questions I have to ask, one sports related and
Speaker 2: the obvious question I always feel like I have to
Speaker 2: ask you, is, Hey, what's the cause? You recall the
Speaker 2: dinner with a bunch of people talking about SBF. So
Speaker 2: I got to ask you, what's the next? Michael Lewis
Speaker 2: story that's going to be told? What story haven't you told?
Speaker 2: What subject? Haven't you touched that you're eager to attack?
Speaker 3: Well, I kind of have a rule, and the rule
Speaker 3: is I don't. I don't really like to talk about it.
Speaker 3: I know it takes the energy out of it.
Speaker 2: Oh really, that's why I thought you just didn't want
Speaker 2: to reveal.
Speaker 3: No. No, it's like you're getting you're sort of getting
Speaker 3: the response before you've done the work, and it's it's
Speaker 3: sort of it's it's nice to build the tension just
Speaker 3: in yourself. But having said that, I don't have it's
Speaker 3: not I mean, I just finished this and I don't
Speaker 3: I don't have a book I'm writing now. I'll tell
Speaker 3: you what things that interests me? Okay, I think what
Speaker 3: Elon Musk and Doge is doing is unbelievably interesting, Like
Speaker 3: it's it is a tornado ripping through the culture. And
Speaker 3: I think that that daily journalism does a really good
Speaker 3: job of telling you just what kind of just happened
Speaker 3: on the surface. It doesn't go below, and that there
Speaker 3: is there's that that's worth paying close attention to. Another
Speaker 3: thing that really interests me is the commercialization of youth
Speaker 3: sports of college and college sports especially uh, the the
Speaker 3: way this radical free agency has come to college sports
Speaker 3: and you've got fifteen year old quarterbacks who have got
Speaker 3: two million dollar name, image and likeness deals and that
Speaker 3: that that it's an environment, it's just been upended. And
Speaker 3: it interests me on the like who wins, who loses,
Speaker 3: who succeeds, who can coach in this environment, who can
Speaker 3: lead in this environment? I'm interesting in college sports and
Speaker 3: a third area and I don't really want to get
Speaker 3: in this too much, but grief. You know, I lost
Speaker 3: a child four years ago and I'm starting to find
Speaker 3: the words to describe that experience. And I don't think
Speaker 3: it's a book, but I don't know, but these but
Speaker 3: I mean, if you were here, Barry, in my office,
Speaker 3: I have like, you know, fifty folders here of stuff that's,
Speaker 3: you know, at least in the back of my mind
Speaker 3: that might lead somewhere. And you never know what's going
Speaker 3: to spark it. You never I really never know what's
Speaker 3: gonna It's gonna the call I'm going to get, or
Speaker 3: the person I'm going to meet, or the thing I'm
Speaker 3: going to read where I think, oh, that's it, that's
Speaker 3: where I need to go, and it happens very quickly.
Speaker 3: I mean it's like slow, slow, slow, slow slow, and
Speaker 3: then ooh, there we go, and I'm in.
Speaker 2: The gradually then all at once. You're quoting Hemingway, there
Speaker 2: we go.
Speaker 3: That's how it feels. It feels gradually then all at once,
Speaker 3: and I'm in the gradual phase right now.
Speaker 2: Huh. That's really interesting. I'm going to come back to
Speaker 2: sports in a minute, but I got to ask. So,
Speaker 2: given all these files, and given how this book was
Speaker 2: so different than prior books, and then Going Infinite was
Speaker 2: so different than Flashboys, and on and on it goes,
Speaker 2: I'm curious about what's your writing routine like and how
Speaker 2: has it evolved over time? Like I am intimately familiar
Speaker 2: with the Liar's Poker story, which I just love that
Speaker 2: whole thing. We've talked about that many times. But from
Speaker 2: kind of writing at night getting home from Salomon Brothers
Speaker 2: to being a full time author, how has your process changed.
Speaker 3: I had to shift when kids start. When we started
Speaker 3: having kids, instead of a really late night life, it
Speaker 3: became a really I became a morning writer. I may
Speaker 3: go back. Our son, our youngest, is a senior in
Speaker 3: high school and the mini is out of the house.
Speaker 3: I would not be surprised if I revert to nocturnal beast.
Speaker 3: It's my that's my natural state. But the process. The
Speaker 3: one thing I've noticed that's changed in my process is
Speaker 3: a deeper and deeper appreciation of the importance of the
Speaker 3: character of the subjects. That that I the premonition is
Speaker 3: that it was. It was for me. It was a
Speaker 3: sort of a breaking it was. It was a marking
Speaker 3: point because I thought, I do want to write about
Speaker 3: this thing that's happening the COVID, but I want to
Speaker 3: do it. I want to I want to put the
Speaker 3: characters first. And I almost cast it that I went looking.
Speaker 3: I worried about the story less than I worried about
Speaker 3: the people I was writing about. I put the and
Speaker 3: and the same with SBF. It was like, this guy
Speaker 3: is I don't know what's going to happen, but it's
Speaker 3: he's interesting. Like there's a thing to do here because
Speaker 3: this person is so interesting, the person will create the story.
Speaker 3: And I've tilted that direction. I mean there was always there.
Speaker 2: I was.
Speaker 3: I've always been writing about curious characters. But I've gotten
Speaker 3: more adamant. I've got to be more certain about the
Speaker 3: character before I start Moneyball. I started with the idea
Speaker 3: kind of it was. Uh, it was like how they
Speaker 3: win a baseball games and oh my god, it's inefficient,
Speaker 3: Oh my god, analytics blah blah blah. But it doesn't
Speaker 3: work unless Billy Bean is a really good character. But
Speaker 3: I didn't. I didn't discover how good a character he
Speaker 3: was for months. He kept himself hidden for a while.
Speaker 3: And I think I now have to feel more confident
Speaker 3: in the character before I start.
Speaker 2: Huh. And and you know, I'm thinking in the top
Speaker 2: off the top of my head. So you have Billy Bean, right,
Speaker 2: and then work you like bradcatching on at at I ea, uh,
Speaker 2: Danny Kahneman, you just keep working your way through each
Speaker 2: of the books, to say nothing of Michael Barry. Every
Speaker 2: book leads to one of these characters leads to this again,
Speaker 2: this Michael Lewis character who's quirky and thoughtful and discovers
Speaker 2: a great out of consensus truth and uses it to
Speaker 2: either affect change or challenge the status quo. I think
Speaker 2: that shines through this certainly. SBF was that guy hold
Speaker 2: aside the fraud and the end of money and all
Speaker 2: that stuff, same sort of character. And what I'm hearing
Speaker 2: from you is that you've become even though the stories
Speaker 2: are always fascinating and amazing, they seem to become more
Speaker 2: and more character driven as you've what's.
Speaker 3: You It's true, It's true, like your theory of my
Speaker 3: I don't know how you explained how Liar's Poker fits
Speaker 3: into it, for example.
Speaker 2: Freshman Attempt and you're still get by the way. I
Speaker 2: when you had the anniversary of that book and I
Speaker 2: literally picked it up having not read it for twenty
Speaker 2: five years, and I reread it. I'm like, oh, good writer,
Speaker 2: shows potential. Not quite Michael Lewis yet, but you could
Speaker 2: see and did you just a compliment? Oh it comes
Speaker 2: through like, oh, I see exactly how all these little things,
Speaker 2: like all the seeds of Michael Lewis are planted throughout
Speaker 2: Liar's Poker, and then it just blossoms in every subsequent book.
Speaker 2: So the first your first book was like, all right,
Speaker 2: this is real. Oh he's a first time author. This
Speaker 2: is a really good book for first time author. But
Speaker 2: that author wasn't a fully formed Michael Lewis. Nor how
Speaker 2: old were you thirty something twenty?
Speaker 3: I wrote it when I was twenty six.
Speaker 2: Okay, so a twenty six year old Michael Lewis is
Speaker 2: certainly should never be expected to be a thirty forty
Speaker 2: fifty sixty something Michael Lewis, seasoned, wizened and just having
Speaker 2: lived life. So and I say, I want you to
Speaker 2: understand I'm saying that as I don't.
Speaker 3: No, I had to reread it when I did the
Speaker 3: audio book, reread it.
Speaker 2: How bizarre is doing an audio book? By the way,
Speaker 2: is it not the craziest thing you've ever done?
Speaker 3: It's it's when I going back to something I wrote
Speaker 3: thirty something years ago that was weird and it was
Speaker 3: unselling because I wanted to fix all this.
Speaker 2: Stuff, you know, right, you want to hit it as.
Speaker 3: Your yeah yeah things. I didn't even notice at the time.
Speaker 3: It's just like appalling to me, right, But doing my
Speaker 3: own audio books, as I mostly do now, it's the
Speaker 3: one thing I always noticed is how much how you
Speaker 3: read it differently, how you see it differently. When you're
Speaker 3: reading it aloud, you see stuff that you wouldn't you
Speaker 3: don't see when you just read when you're doing it
Speaker 3: on the page, And that you shouldn't let a book
Speaker 3: out the door without having read it aloud.
Speaker 2: I had an editor who used to say to me,
Speaker 2: you should take your columns and read them out loud,
Speaker 2: and you'll have a totally different feeling for it. Plus
Speaker 2: you discover half your vocabulary are things that you have
Speaker 2: never spoken out loud and don't know how to pronounce
Speaker 2: because you've only read them and written them.
Speaker 3: That's right, that's right.
Speaker 2: Hapittualization. It took me like ten minutes to get that
Speaker 2: word iterative because I've only read and written them. How
Speaker 2: often you get to say capitalization and you always mangle
Speaker 2: it because you're so it's really fine, all right, So
Speaker 2: I only have you for a few moments left. I
Speaker 2: got to throw you a curveball. Since you've written about baseball,
Speaker 2: you've written about little league coaching, you've written about football,
Speaker 2: even you've written about basketball and Darryl Morey, which, by
Speaker 2: the way, there's a book in basketball. Although maybe it's
Speaker 2: too late because Steph Curry and Lebron James are already
Speaker 2: towards the back part of their career. But I have
Speaker 2: to ask what sports do you watch? What are your teams?
Speaker 2: Who do you root for? And we're recording this just
Speaker 2: as March Madness has already destroyed all the brackets.
Speaker 3: I had Drake. I had Drake over Oh yes, really,
Speaker 3: yeah I did. I didn't have a knee state, but
Speaker 3: I came close. I thought about it, and then I
Speaker 3: thought Clemson is going to bounce from losing the Duke.
Speaker 3: And I was wrong about that. Uh my bracket looks
Speaker 3: great except for that. It's right now, it's intact, except
Speaker 3: for the McNee steak game. I watched college basketball. I
Speaker 3: watch it more like everybody else during March Madness. I
Speaker 3: watch playoff baseball. I watched the Cubs. I watched the
Speaker 3: You're not you Chicago guy. Nope, but Nico Horner. Nico
Speaker 3: Horner is their second baseman. And Nico was in high
Speaker 3: school with Quinn, my daughter and Quinn. And when Quinn,
Speaker 3: Quinn was a pictuer on the softball team and Nico
Speaker 3: was pitcher on the baseball team, and the off season,
Speaker 3: Nico and his English teacher father and me and Quinn
Speaker 3: would be out there, the only ones out there working out.
Speaker 3: And so I got to Nico a little bit, and
Speaker 3: he's a He's this unbelievable kid, just a great kid.
Speaker 3: And so he has led me to become a Cubs fan,
Speaker 3: and it's actually a fun team. They they they're in
Speaker 3: field before games. This is something I might they get.
Speaker 3: They sit in a circle and they pick a different
Speaker 3: person and everybody has to say something nice about it. Exactly.
Speaker 3: It's a completely different model of how you like collaborate.
Speaker 3: But you know, for for guys in sports. But so
Speaker 3: I watched that. I watch some w n B A
Speaker 3: I watch the NBA. The Warriors are my team and
Speaker 3: have been. I mean, we've been so blessed. Kerr is
Speaker 3: a magician, and I think Curry has been I mean
Speaker 3: the whole thing has just been magical to watch. And
Speaker 3: the A's used to be my team, but they've left me.
Speaker 3: And football I watch obsessively. So football. I watched more
Speaker 3: college and and NFL football than anything. And my team
Speaker 3: in the in the NFL is the Saints, which is
Speaker 3: we've had our ups and downs, but I never you
Speaker 3: know that New Orleans has never left me and U
Speaker 3: And in college football, I don't really have I like
Speaker 3: the old Miss Rebels. I got very attached when Michael
Speaker 3: Ore was there. I traveled around with that team. But
Speaker 3: I don't have one team in basketball. The team that
Speaker 3: I like college basketball I don't know why because I
Speaker 3: didn't go there. I'm a duke basketball at it. It's
Speaker 3: like you jump one way or the other. With duke,
Speaker 3: you either hate him or love them.
Speaker 2: Well. Their coach was so beloved for so many years.
Speaker 3: And they new coach will be too. I think Shire
Speaker 3: is fabulous, So I think it's a different he's He's
Speaker 3: managing a different environment, but clearly has the ability to
Speaker 3: do it.
Speaker 2: Michael, as always, every time we have one of these conversations,
Speaker 2: they're They're delightful, and I'm going to just announce here
Speaker 2: anyone who wants to come listen to Michael discussed not
Speaker 2: just this book, but his whole career April seventh at
Speaker 2: the Gene Rimsky Theater in Port Washington. It's gonna be
Speaker 2: a lot of fun. I get to pepper Mike with
Speaker 2: all sorts of questions that we haven't gotten to here.
Speaker 2: We have been speaking with Michael Lewis. His new book
Speaker 2: is Who Is Government? The Untold Story of Public Service.
Speaker 2: If you enjoy this conversation, well be sure and check
Speaker 2: out any of the previous five hundred conversations we've had
Speaker 2: over the past eleven years. You can find those at iTunes, Spotify,
Speaker 2: Bloomberg dot com, YouTube, wherever you find your favorite podcasts.
Speaker 2: I would be remiss if I do not thank the
Speaker 2: Crack team that helps put these conversations together each week.
Speaker 2: Sarah Livesey is my audio engineer. Anna Luke is my producer.
Speaker 2: Jean Russo is my researcher. I'm Barry Ritolts. You've been
Speaker 2: listening to Masters in Business on Bloomberg Radio.