The Fifth Risk: Undoing Democracy

by Michael Lewis

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. Still, many of the problems our government grapples with aren’t particularly ideological, and the Obama people tried to keep their political ideology out of the briefings. “You don’t have to agree with our politics,” as the former senior White House official put it. “You just have to understand how we got here. Zika, for instance. You might disagree with how we approached it. You don’t have to agree. You just have to understand why we approached it that way.” How to stop a virus, how to take a census, how to determine if some foreign country is seeking to obtain a nuclear weapon or if North Korean missiles can reach Kansas City: these are enduring technical problems.

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.

Panglossian

“Government has always played a major role in innovation,” he said. “All the way back to the founding of the country. Early-stage innovation in most industries would not have been possible without government support in a variety of ways, and it’s especially true in energy. So the notion that we are just going to privatize early-stage innovation is ridiculous.

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.

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 ceding of technical and scientific leadership to China. 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.

If your ambition is to maximize short-term gain without regard to the long-term cost, you are better off not knowing the cost. If you want to preserve your personal immunity to the hard problems, it’s better never to really understand those problems. There is an upside to ignorance, and a downside to knowledge. Knowledge makes life messier. It makes it a bit more difficult for a person who wishes to shrink the world to a worldview.

Trump’s budget, like the social forces behind it, is powered by a perverse desire—to remain ignorant. Donald Trump didn’t invent this desire. He was just its ultimate expression.

There were two other important little boxes inside the USDA. One was marked “Farm,” and the other was “Rural Development.” Ali Zaidi had watched many billions flow through the first and a few billion flow through the second. He thought it highly unlikely the Trump administration’s budget cuts would have much effect on the farm dollars. A lot of that money went to big grain producers. The same Republican senators from farm states who said they abhorred government spending of almost any sort became radical socialists when the conversation turned to handouts to big grain producers. “The money follows the political power of the constituencies,” said Ali, “instead of the evidence of need in America. If you really boil down the difference between the farm side of the budget and the rural-development side of the budget, the farm subsidies can wind up in the pockets of large corporations. It’s the rural-development money that tends to stay in these communities.”

She also now had a view of the inner workings of the health care industry. The company that had made the old syringes, Becton, Dickinson & Co., controlled more than 80 percent of the market and felt threatened. It

wasn’t long before Becton started to require hospital systems to buy its clumsy new version of a safe syringe, by bundling it with other products. Salerno assumed Becton was counting on her inability to pay for the lawsuits required to fight them. But she did and wound up with a settlement of $100 million in 2004.

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.”

The farmers usually weren’t so bad off, but their situation was inherently precarious and threatened by modernity. Farmers didn’t work on desktop computers, and so they’d largely skipped the initial internet revolution. But they had mobile phones, and in 2008, when the 3G networks went up in rural America, farmers finally got online. “The problem with the internet is that it shows everyone on earth what they’re missing,” said Friedberg. “And if you can’t get to it, you feel you are getting fucked. That there is this very visceral and obvious shift that is happening

There was a rift in American life that was now coursing through American government. It wasn’t between Democrats and Republicans. It was between the people who were in it for the mission, and the people who were in it for the money.

The government was the mission of an entire society: why was the society undermining it? “I’m routinely appalled by how profoundly ignorant even highly educated people are when it comes to the structure and function of our government,” she said. “The sense of identity as Citizen has been replaced by Consumer. The idea that government should serve the citizens like a waiter or concierge, rather than in a ‘collective good’ sense.”

The only thing any of us can do completely on our own is to have the start of a good idea.

Art stood off to one side respectfully and watched as the television cameras turned their attention from the man to the brave young Coast Guard search patrol that had saved him. “Against all odds, the crew detected yelling and a faint whistle in the darkness,” someone said, as the patrol stepped forward in turn to receive their medals. Just then an older Coast Guard guy who had worked with Art Allen for many years leaned over and whispered to him, but to him alone: “Nice job.”