The Fifth Risk: Undoing Democracy

by Michael Lewis

Bannon and Christie tried to explain that Trump couldn’t have both his money and a transition. Shut it down, said Trump. Shut down the transition.

Wait, this is why the ‘transition team’ basically no-showed when Obama’s team were ready to prepare them? Because Trump didn’t want to divert any money away from his campaign fund?

It was one thirty-five in the morning, but that wasn’t the only reason the feeling in the room was odd. Mike Pence went to kiss his wife, Karen, and she turned away from him. “You got what you wanted, Mike,” she said, “now leave me alone.” She wouldn’t so much as say hello to Trump.

Election night

Before any of the calls could be made, however, the president of Egypt called in to the switchboard at Trump Tower and somehow got the operator to put him straight through to Trump. “Trump was like . . . I love the Bangles! You know that song ‘Walk Like an Egyptian’?” recalled one of his advisers on the scene. That had been the first hint Christie had of trouble.

The meeting began with a prayer, followed by Pence’s first, ominous question: Why isn’t Puzder on the list for Labor? Andrew Puzder, the head of CKE Restaurants, the holding company for Hardee’s and Carl’s Jr., wanted to be the secretary of labor. Christie explained that Puzder’s ex-wife had accused him of abuse, and his fast-food restaurant employees had complained of mistreatment. Even if he was somehow the ideal candidate to become the next secretary of labor, he wouldn’t survive his Senate confirmation hearings. (Trump ignored the advice and nominated Puzder. In the controversy that followed, Puzder not only failed to be confirmed but stepped down from his job at the fast-food company.)

It wasn’t just Chris Christie who’d been fired. It was the entire transition team—though no one ever told them so directly. As Nancy Cook later reported in Politico, Bannon visited the transition headquarters a few days after he’d given Christie the news, and made a show of tossing the work the people there had done for Donald Trump into the garbage can. Trump was going to handle the transition more or less by himself. Not even Steve Bannon thought this was a good idea.

“The election happened,” remembers Elizabeth Sherwood-Randall, then deputy secretary of the DOE. “And he won. And then there was radio silence. We were prepared for the next day. And nothing happened.” Across the federal government the Trump people weren’t anywhere to be found. The few places they did turn up, they appeared confused and unprepared.

It was led by, and mostly consisted of, a man named Thomas Pyle, president of the American Energy Alliance, which, upon inspection, proved to be a Washington, DC, propaganda machine funded with millions of dollars from ExxonMobil and Koch Industries. Pyle himself had served as a Koch Industries lobbyist and ran a business on the side writing editorials attacking the DOE’s attempts to reduce the dependence of the American economy on carbon.

“He did not seem motivated to spend a lot of time understanding the place,” says Sherwood-Randall. “He didn’t bring a pencil or a piece of paper. He didn’t ask questions. He spent an hour. That was it. He never asked to meet with us again.” Afterward, Knobloch says, he suggested that Pyle visit one day each week until the inauguration, and that Pyle agreed to do it—but then he never showed up. “It’s a head-scratcher,” says Knobloch. “It’s a thirty-billion-dollar-a-year organization with about a hundred ten thousand employees. Industrial sites across the country. Very serious stuff. If you’re going to run it, why wouldn’t you want to know something about it?”

Not if your plan is to mismanage it and try to use budget for personal gain...which seems to have been the general approach to the federal government.

Pyle eventually sent over a list of seventy-four questions he wanted answers to. His list addressed some of the subjects covered in the briefing materials, but also a few not: Can you provide a list of all Department of Energy employees or contractors who have attended any Interagency Working Group on the Social Cost of Carbon meetings? Can you provide a list of Department employees or contractors who attended any of the Conference of the Parties (under the United Nations Framework Convention on Climate Change) in the last five years?

“We aren’t answering these questions,” Secretary Moniz had said simply.

After Pyle’s list of questions wound up on Bloomberg News, the Trump administration disavowed them, but a signal had been sent: We don’t want you to help us understand; we want to find out who you are and punish you.

The Obama people did what they could to preserve the institution’s understanding of itself. “We were prepared for them to start wiping out documents,” said Shah. “So we prepared a public website to transfer the stuff onto it—if needed.”

Two billion of that goes to hunting down weapons-grade plutonium and uranium at loose in the world so that it doesn’t fall into the hands of terrorists. In eight years alone—2010–2018—the DOE’s National Nuclear Security Administration collected enough material to make 160 nuclear bombs. The department trains every international atomic-energy inspector; if nuclear power plants around the world are not producing weapons-grade material on the sly by reprocessing spent fuel rods and recovering plutonium, it’s because of these people.

With the nuclear physicist who understood the DOE perhaps better than anyone else on earth Perry had spent minutes, not hours. “He has no personal interest in understanding what we do and effecting change,” a DOE staffer told me in June 2017. “He’s never been briefed on a program—not a single one, which to me is shocking.” Since Perry was confirmed, his role has been ceremonial and bizarre. He pops up in distant lands and tweets in praise of this or that DOE program while his masters inside the White House create budgets to eliminate those very programs.

“The reason it’s worth thinking about this,” says MacWilliams, “is the reason that bomb didn’t go off was because of all the safety devices on the bombs, designed by what is now DOE.”

Why North Carolina still exists

He’d watched Secretary Moniz help negotiate the deal that removed from Iran the capacity to acquire a nuclear weapon. There were only three paths to a nuclear weapon. The Iranians might produce enriched uranium—but that required using centrifuges. They might produce plutonium—but that required a reactor that the deal had dismantled and removed. Or they might simply go out and buy a weapon on the open market. The national labs played a big role in policing all three paths.

At any rate, the serious risk in Iran wasn’t that the Iranians would secretly acquire a weapon. It was that the president of the United States would not understand his nuclear scientists’ reasoning about the unlikelihood of the Iranians’ obtaining a weapon, and that he would have the United States back away foolishly from the deal.† Released from the complicated set of restrictions on its nuclear-power program, Iran would then build its bomb.

Fracking—to take one example—was not the brainchild of private-sector research but the fruit of research paid for twenty years ago by the DOE. Yet fracking has collapsed the price of oil and gas and led to American energy independence.

Oh the painful irony in so many ways!

Solar and wind technologies are another example. The Obama administration set a goal in 2009 of getting the cost of utility-scale solar energy down by 2020 from 27 cents a kilowatt-hour to 6 cents. It’s now at 7 cents, and competitive with natural gas because of loans made by the DOE.

Politically, the loan program had been nothing but downside. No one had paid any attention to its successes, and its one failure—Solyndra—had allowed the right-wing friends of Big Oil to bang on relentlessly about government waste and fraud and stupidity.

Sounds like this is really just VC for energy innovation. Interesting that it’s in the form of loans rather than research grants like DARPA does. Implies there’s a failure of the loan defaults (because the bet didn’t pay off), so can lead to PR problems when the expected happens and some opportunities completely fail. On the other hand, the govt gets some of the money back in the win cases, so it costs the public a lot less than other R&D ventures.

As he dug into the portfolio, MacWilliams feared it might contain other Solyndras. It didn’t, but what he did find still disturbed him. The DOE had built a loan portfolio that, as MacWilliams put it, “JPMorgan would have been happy to own.” The whole point was to take big risks the market would not take, and they were making money! “We weren’t taking nearly enough risk,” said MacWilliams.

Oops. The lending mindset may have led to this. Or was it fear of bad press? :( making low-interest loans to near sure winners just wastes government time and money. Later goes on to say it was the fear of bad press , or rather handing weapons to the anti-government-on-all-counts narrative that some circles use to get (re-)elected.

Back in 2013 there had been an incident in California that got everyone’s attention. Late one night, just southeast of San Jose, at Pacific Gas and Electric’s Metcalf substation, a well-informed sniper, using a .30-caliber rifle, had taken out seventeen transformers. Someone had also cut the cables that enabled communication to and from the substation. “They knew exactly what lines to cut,” said Tarak Shah, who studied the incident for the DOE. “They knew exactly where to shoot. They knew exactly which manhole covers were relevant—where the communication lines were. These were feeder stations to Apple and Google.”

Wha? Apparently no disruption of service, but only just. Could’ve been a lot worse.

Anyway, when I had asked him for the fifth risk, he had thought about it and then seemed to relax a bit. The fifth risk did not put him at risk of revealing classified information. “Project management,” was all he said.

Asked to guess what it might cost the U.S. government to return Hanford to the standards now legally required of it, MacWilliams said, “A century and a hundred billion dollars.” And that, he thought, might be a conservative estimate.

Into USDA jobs, some of which paid nearly $80,000 a year, the Trump team had inserted a long-haul truck driver, a clerk at AT&T, a gas-company meter reader, a country-club cabana attendant, a Republican National Committee intern, and the owner of a scented-candle company, with skills like “pleasant demeanor” listed on their résumés.

“In many cases [the new appointees] demonstrated little to no experience with federal policy, let alone deep roots in agriculture,” wrote Hopkinson. “Some of those appointees appear to lack the credentials, such as a college degree, required to qualify for higher government salaries.” What these people had in common, she pointed out, was loyalty to Donald Trump.

They instructed the staff to stop using the phrase “climate change.” They removed the inspection reports on businesses that abused animals—roadside circuses, puppy mills, research labs—from the department’s website. When reporters from National Geographic contacted the USDA to ask what was going on with animal-abuse issues, “they told us all of this information was public, except now you had to FOIA it,” said Rachael Bale. “We asked for the files, and they sent us seventeen hundred completely blacked-out pages.”

In his job at USDA, Concannon had overseen for eight years the nation’s school-lunch program; the program that ensures that pregnant women, new mothers, and young children receive proper nutrition; and a dozen or so smaller programs designed to alleviate hunger. Together these accounted for approximately 70 percent of the USDA’s budget—he’d spent the better part of a trillion dollars feeding people with taxpayer money while somehow remaining virtually anonymous.

That *is* a lot of money (even assuming this was over an eight year period, that’s probably around 100 billion per year—on what, 100 million people, max?)

No one in the Trump administration was likely to ever come right out and say: “We want to let kids and old people go hungry.” But, obviously, they might run the program so ineptly that it lost political support. And then kids and old people would go hungry.

(Lose political support by allowing too much food stamp fraud by getting lax and then letting the media do its thing)

The federal government makes the benefits available but then leaves it to states to administer them. “Where you live in this country makes a huge difference if you are poor,” says Concannon. “And it’s not just the weather.

Georgia was usually a problem. Texas, too. “If they ran any of their football teams the way they run their food program, they’d fire the coach,” said Concannon. A Wyoming legislator, proud of how badly he had gummed up the state’s nutrition programs, told him, “We pride ourselves on doing the minimum required by the federal government.”

An Arizona congressman proposed that the card used by people receiving food-stamp benefits be made prison orange, conferring not just nutrition but shame. In 2016, after several counties in North Carolina suffered severe flooding, the state tried to distribute federal disaster-relief food-benefit cards on the day of the presidential election, to give poor people a choice between eating and voting.

While he was doing that he got himself suspended from his English class for exploding a stink bomb, and a few months after that from math class for . . . at that point it hardly mattered. By the time he graduated from high school—after a merciful school administrator changed an F on his transcript to a C—he wasn’t the only one who might look at “DJ” and see “JD.”

Funny. Took me a while to see that JD here referred to juvenile delinquent rather than Juris Doctor :) (was thinking, “yeah, I guess he’ll need a lawyer soon at this rate?”)

The Forbes reporters were accustomed to having rich people mislead them about the size of their wealth, but nearly all of them had been trying to keep their names off the list. “In the history of the magazine only three people stand out as having made huge efforts to get on, or end up higher than they belonged,” said Alexander. “One was [Saudi] Prince Alwaleed. The second was Donald Trump. And the third was Wilbur Ross.”

Pah!

And he asked Ross a question: “What’s your philosophy for running the department?” “What do you mean?” asked Ross. “It’s not really the Department of Commerce,” said the Bush official. “Its mission is a science and technology mission.” “Yeah, I don’t think I want to be focusing on that,” said Ross. “It was clear to me that he had not thought about what the science and technology meant,” said the Bush official. “He doesn’t have a scientific bone in his body.”

One version of the future revealed itself in March 2015. The National Weather Service had failed to spot a tornado before it struck Moore, Oklahoma. It had spun up and vanished very quickly, but, still, the people in the Weather Service should have spotted it. AccuWeather quickly issued a press release bragging that it had sent a tornado alert to its paying corporate customers in Moore twelve minutes before the tornado hit. The big point is that AccuWeather never broadcast its tornado warning. The only people who received it were the people who had paid for it—

Member of the AccuWeather-owning family now runs NOAA and the National Weather Service. Win? Privatize emergency services..why not?

The IRS data allowed Chetty to study Americans across generations, and the census data let him compare them by race, gender, or whichever trait he wished to isolate. In the data he found an answer to his question, and much more. He discovered that while just over 90 percent of children born in 1940 went on to earn more than their parents, only 50 percent of children born in the 1980s did so. Every year, the economic future of an American child was a bit less bright. And the big reason was not lower rates of economic growth but the increasingly unequal distribution of money. More and more of the gains were being captured by the very rich.

Raj Chetty is pretty much the man when it comes to asking and answering interesting questions about the world, society, economies. Unfortunately he often finds sobering results like this.

Mobility had a racial dimension as well: A white child born into the upper-income quintile was five times more likely to stay there than to fall to the bottom. A black child born into the upper-income quintile was as likely to fall to the bottom as to remain rich.

Doh.

“But there were private companies, like AccuWeather and the Weather Company, that had issues with us getting access to weather data. In the end we agreed [with NOAA] we would not have access to the weather data today. We’d just get the historical data.”

Grrr

After Trump took office, DJ Patil watched with wonder as the data disappeared across the federal government. Both the Environmental Protection Agency and the Department of the Interior removed from their websites the links to climate change data. The USDA removed the inspection reports of businesses accused of animal abuse by the government. The new acting head of the Consumer Financial Protection Bureau, Mick Mulvaney, said he wanted to end public access to records of consumer complaints against financial institutions.

“The NOAA webpage used to have a link to weather forecasts,” he said. “It was highly, highly popular. I saw it had been buried. And I asked: Now, why would they bury that?” Then he realized: the man Trump nominated to run NOAA thought that people who wanted a weather forecast should have to pay him for it.

“Barry Myers [AccuWeather’s CEO] turned up at a meeting and said that I shouldn’t be doing what I was doing,” she said. “Because it’s marketing. But it’s not marketing. It’s saving lives. The question became: What can we do in this space without interfering with the profits of AccuWeather?”