The Fifth Risk: Undoing Democracy

by Michael Lewis

Bannon stepped off the elevator to find the governor of New Jersey seated on a sofa, being hollered at. Trump was apoplectic, actually yelling, You’re stealing my money! You’re stealing my fucking money! What the fuck is this?? Seeing Bannon, Trump turned on him and screamed, Why are you letting him steal my fucking money?

Months before the election, the law said, the nominees of the two major parties were expected to prepare to take control of the government. The government supplied them with office space in downtown Washington, DC, along with computers and trash cans and so on, but the campaigns paid their people. To which Trump replied, Fuck the law. I don’t give a fuck about the law. I want my fucking money. Bannon and Christie tried to explain that Trump couldn’t have both his money and a transition.

He thought the planning and forethought pointless. At one point he turned to Christie and said, “Chris, you and I are so smart that we can leave the victory party two hours early and do the transition ourselves.”

People who had lived without government were more likely to find meaning in it. On the other hand, people who had never experienced a collapsed state were slow to appreciate a state that had not yet collapsed.

“The new people come in and think that the previous administration and the civil service are lazy or stupid. Then they actually get to know the place they are managing. And when they leave they say, ‘This was a really hard job, and those are the best people I’ve ever worked with.’ This happens over and over and over.”

President Obama had been slow to engage with the federal workforce. He’d appointed some poor managers to run some agencies. The fiasco of the rollout of HealthCare.gov was not an accident but a by-product of bad management. But Obama’s preparations to hand over the government had been superb: the Obama administration had created what amounted to the best course ever on the inner workings of the most powerful institution on earth.

Christie met with Pence the day after the election, to discuss the previous lists of people who had been vetted for jobs. The meeting began with a prayer, followed by Pence’s first, ominous question: Why isn’t Puzder on the list for Labor?

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.

The United States government might be the most complicated organization on the face of the earth. Its two million federal employees take orders from four thousand political appointees. Dysfunction is baked into the structure of the thing: the subordinates know that their bosses will be replaced every four or eight years, and that the direction of their enterprises might change overnight—with an election or a war or some other political event.

The people appointed by a newly elected president to solve these problems have roughly seventy-five days to learn from their predecessors. After the inauguration, a lot of deeply knowledgeable people will scatter to the four winds and be forbidden, by federal law, from initiating any contact with their replacements. The period between the election and the inauguration has the feel of an AP chemistry class to which half the students have turned up late and are forced to scramble to grab the notes taken by the other half, before the final.

Trump had created a small “Landing Team.” 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.

According to a former Obama official, he was replaced by a handful of young ideologues who called themselves “the Beachhead Team.” “They mainly ran around the building insulting people,” says a former Obama official. “There was a mentality that everything that government does is stupid and bad and the people in it are stupid and bad,” says another. They demanded to know the names and salaries of the twenty highest-paid people in the national science labs overseen by the DOE. They’d eventually delete the contact list with the email addresses of all DOE-funded scientists—apparently to make it more difficult for them to communicate with one another. “These people were insane,” says the former DOE staffer. “They weren’t prepared. They didn’t know what they were doing.”

Roughly half of the DOE’s annual $30 billion budget is spent on maintaining and guarding our nuclear arsenal. 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.

He hadn’t nominated anyone to serve as head of the Patent Office, for instance, or to run the Federal Emergency Management Agency (FEMA). There was no Trump candidate to head the Transportation Security Administration, and no one to run the Centers for Disease Control and Prevention.

Perry had spent minutes, not hours. “He has no personal interest in understanding what we do and effecting change,”

About half its budget in 2016 went to maintaining the nuclear arsenal and protecting Americans from nuclear threats. It sent teams with equipment to big public events—the Super Bowl, for instance—to measure the radiation levels, in hopes of detecting a dirty bomb before it exploded.

The waste would go into barrels and the barrels would go into the caverns, where the salt would eventually entomb them. The contents of the barrels were volatile and so needed to be seasoned with, believe it or not, kitty litter.

The list of things that might go wrong inside the DOE was endless. The driver of a heavily armed unit assigned to move plutonium around the country was pulled over, on the job, for drunk driving. An eighty-two-year-old nun cut through the perimeter fence of a facility in Tennessee that housed weapons-grade nuclear material. A medical facility ordered a speck of plutonium for research, and a weapons-lab clerk misplaced a decimal point and FedExed the researchers a chunk of the stuff so big it should have been under armed guard—whereupon horrified medical researchers tried to FedEx it back. “At DOE even the regular scheduled meetings started with ‘You’re not going to believe this,’” says former chief of staff Kevin Knobloch.

“Broken Arrow” is a military term of art for a nuclear accident that doesn’t lead to a nuclear war.

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.†

managing risks was an act of the imagination. And the human imagination is a poor tool for judging risk. People are really good at responding to the crisis that just happened, as they naturally imagine that whatever just happened is most likely to happen again. They are less good at imagining a crisis before it happens—and taking action to prevent it.

The worst thing that could happen is that the federal government loses interest in it and slashes the DOE’s budget.‡ And yet Trump won the county in which Hanford resides by 25 points.

(“Resistance to understanding a threat grows with proximity,” writes Kate Brown.)

There is another way to think of John MacWilliams’s fifth risk: the risk a society runs when it falls into the habit of responding to long-term risks with short-term solutions.

It is the innovation that never occurs, and the knowledge that is never created, because you have ceased to lay the groundwork for it. It is what you never learned that might have saved you.

Ignorance allows people to disregard the consequences of their actions. And sometimes it leads to consequences even they did not intend.

The big show Trump has made of removing regulations by executive order has done far less than he suggests, as there is a formal rule-changing process: you must solicit outside opinion, wait a certain amount of time for those opinions to arrive, and then deal with the inevitable legal challenges to your rule change.

“It’s preserving an emotional infrastructure,” said Ali. “We have decided this is the type of community we want to preserve. But the entire time I was in the White House, we grappled with the question: Where do we find the political capital for rural development? Because it can’t just come from the people rural development helps.”

In the red southern states the mayor sometimes would say, ‘Can you not mention that the government gave this?’” Even when it was saving lives, or preserving communities, the government remained oddly invisible. “It’s just a misunderstanding of the system,” said Salerno. “We don’t teach people what government actually does.”

Salerno concluded that increased corporate power was one of the forces that had reduced the opportunity available in rural America. The rapacity of companies with monopolistic power, and their ability to have their way with the government, got her thinking about the big American systems. “The entire health industry lies about what things cost to make,” she said. “I know what things cost because I made them.”

But the more rural the American, the more dependent he is for his way of life on the U.S. government. And the more rural the American, the more likely he was to have voted for Donald Trump.

Oddly, at that very moment, Trump was removing the United States from the Trans-Pacific Partnership and costing American farmers an estimated $4.4 billion a year in foreign sales, according to the American Farm Bureau Federation. As there’s a rule against having more than seven little boxes on the USDA’s org chart, they had to eliminate one of the little boxes. The little box they got rid of was Rural Development.

She thinks that was why they eliminated her little box and moved the $220 billion bank into the office of the secretary: so they could do new things with the money without people noticing. “At the end of the day, what do I think they are going to do?” she said. “Take all the money and give it to their banker friends. Do things like privatize water—so people in rural Florida will be paying seventy-five dollars a month for it instead of twenty dollars.”

DJ had come to Maryland from California to study with James Yorke, a professor who had coined the term “chaos theory.” The idea was simple: some small, barely noticed event can cascade into huge consequences down the road. (The

Inside LinkedIn, DJ presided over an explosion of job titles that described similar tasks: analyst, business analyst, data analyst, research sci. The people in human resources complained to him that the company had too many data-related job titles. The company was about to go public, and they wanted to clean up the organization chart. To that end DJ sat down with his counterpart at Facebook, who was dealing with the same problem. What could they call all these data people? “Data scientist,” his Facebook friend suggested. “We weren’t trying to create a new field or anything, just trying to get HR off our backs,” said DJ. He replaced the job titles for some openings with “data scientist.” To his surprise, the number of applicants for the jobs skyrocketed. “Data scientists” were what people wanted to be.

Nobody understood what it did but, then, like so many United States government agencies, the Department of Commerce is seriously misnamed. It has almost nothing to do with commerce directly and is actually forbidden by law from engaging in business. But it runs the United States Census, the only real picture of who Americans are as a nation. It collects and makes sense of all the country’s economic statistics—without which the nation would have very little idea of how it was doing.

Through the Patent and Trademark Office it tracks all the country’s inventions. It contains an obscure but wildly influential agency called the National Institute of Standards and Technology, stuffed with Nobel laureates, which does everything from setting the standards for construction materials to determining the definition of a “second” and of an “inch.” (It

But trade is maybe ten percent of what Commerce does—if that.” The Department of Commerce should really be called the Department of Information. Or maybe the Department of Data.

But at the end of November Trump nominated Wilbur Ross, a seventy-nine-year-old Wall Street billionaire, to be the next secretary of commerce. A few weeks later Ross came in for a single meeting with Penny Pritzker. “He came by himself,” recalled one of the people who greeted him. “I was shocked. Just this very old guy, all by himself. And it was pretty clear he had no idea what he was getting into. And he had no help.”

“We [at Forbes] had [initially] counted the money that belonged to his investors in one of his funds as his own money. I was stunned that anyone had let that slide. He lucked into a way to be on the list, without deserving to be on the list.

“They came into the Department of Commerce,” said the former Bush official, “and they discovered that it has got this thing in it called NOAA. And it’s sixty percent of the Commerce Department budget. And they said, ‘What the fuck is NOAA?’”

“NOAA is a beast,” he said. “It’s twelve thousand employees and they are decentralized—out in these little tiny offices all over the country. But it does more to protect Americans than any other agency except for Homeland Security and the Department of Defense.”

At first glance, the nomination made sense: a person deeply involved in weather forecasting was going to take over an agency that devoted most of its resources to understanding the weather. At second glance, both Barry Myers and AccuWeather were deeply inappropriate. For a start, Barry Myers wasn’t a meteorologist or a scientist of any sort. He was a lawyer.

All AccuWeather’s press releases shared a couple of problems: 1) there was no easy way to confirm them, as the forecasts were private, and the clients unnamed; and 2) even if true they didn’t mean very much. A company selling private tornado warnings can choose the predictions on which it is judged. When it outperforms the National Weather Service, it issues a press release bragging about its prowess. When it is outperformed by the National Weather Service it can lay low. But it is bound to be better at least every now and again: the dumb blackjack player is sometimes going to beat the card counter.

That was the sad truth—the public servants couldn’t or wouldn’t defend themselves, and few outside the U.S. government had a deep interest in sticking up for them.

DJ Patil had gone to Washington in 2014 to help people find that gold. He was the human expression of an executive order Obama had signed the year before, insisting that all unclassified government data be made publicly available and that it be machine-readable.

A team of researchers at Stanford University, led by an economist named Raj Chetty, used newly accessible data from the Internal Revenue Service to write a series of papers that addressed questions of opportunity in American life. One, titled “The Fading American Dream,” asked a simple question: How likely is it that an American child will be better off than his parents? 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.

But Friedberg also learned that it was harder to sell weather insurance than he had supposed. “He had this quaint supposition that there were all of these people looking for this online,” says one of his former business partners. “And they weren’t.”

Once again, the U.S. government had it. NOAA had forty years’ worth of infrared satellite images of all the land in the United States—again on tape drives in some basement. Plants absorb visible light and emit infrared light: you could calculate the biomass in a field by how much infrared light it emitted. Friedberg brokered a deal with Google, which had digitized the information and gave him access to it for free. “That’s when we discovered that farmers were lying about the dates they were planting,” said Friedberg. The federal crop insurance program, seeking to minimize the risk of freeze, stipulated the earliest date that a farmer was allowed to plant. But the earlier the seeds went into the ground, the richer the crop. To qualify for the insurance, farmers had been claiming to have planted their seeds later than they had. The lie had been captured for decades by satellite, but no one had been able to see the data.

Farming had always involved judgment calls that turned on the instincts of the farmer. The Climate Corporation had turned farming into decision science, and a matter of probabilities.