• Show Notes
  • Transcript

Michael Lewis is the author of fifteen books, including Moneyball and The Big Short. His new book, The Fifth Risk, takes on the Trump administration. He speaks with Preet about the dedication of the civil service, Trump’s attack on trust, and the dangers of willful ignorance.

Plus, Preet’s take on Cohen’s three-year prison sentence.

Do you have a question for Preet? Tweet them to @PreetBharara with the hashtag #askpreet, email staytuned@cafe.com, or call 669-247-7338 and leave a voicemail.

What is the Fifth Risk? (with Michael Lewis)

Air date: 12/13/18

Preet Bharara: [00:00:00] Michael Lewis welcome to the show.

Michael Lewis: [00:00:02] Thanks for having me.

Preet Bharara: [00:00:03] Longtime fan first time caller as they say. So you’ve written a lot of books. I think this is your up to 15 is that right.

Michael Lewis: [00:00:10] You know I never really count them. I’ll trust you on that.

Preet Bharara: [00:00:13] My folks counted. It’s 15. And we’re going to get to the book in a minute – it’s called the Fifth Risk. But I thought I’d ask you a broader question about sort of the body of your work and I’m a huge fan of it and I’ve read a lot of your books. And so thank you for your service to the public through your writing. But you’ve sort of written about corruption and malfeasance in multiple areas in sports in business, Wall Street, and in government. Is there – have you found through all the work you’ve done an investigation you’ve done that that there’s a difference in how things go wrong in the different areas and some things that are the same? How do you think about that? Are those distinct areas or not?

Michael Lewis: [00:00:51] So I’m spitball in here because this isn’t something I’ve spent a lot of time thinking about.

Preet Bharara: [00:00:55] That’s perfect for the podcast.

Michael Lewis: [00:00:56] But the, what I’d say is, in each case – I haven’t really written about corruption in sports much. I mean, I’ve written about it like inefficiencies and stupidity in sports. It’s a little different. But, but I would say that as a rule it is amazing how even the most corrupt people don’t think of themselves as corrupt. So when I write about people who seem to me obviously villainous.

Preet Bharara: [00:01:25] Right.

Michael Lewis: [00:01:25] And it seems obvious to any neutral reader that they’re villainous, they themselves don’t agree. And so it’s not like there are a bunch of people in each sphere who are wandering around saying oh I’m going to make a lot of money being corrupt. What happens instead is people just follow incentives. I mean I think if there’s like a pattern to what leads people to either both stupid behavior or corrupt behavior is this that there’s some little carrot out there that they’re following. And they just don’t stop themselves. And you know the run up to the financial crisis whatever laws were broken…probably not enough laws were broken. I mean it was really a case where an awful lot of stuff had happened that was awful was perfectly legal. But there are people inside these big Wall Street banks who are doing unbelievably self destructive and socially destructive things while themselves being very efficient in maximizing their self-interest.

Preet Bharara: [00:02:22] But why is it that in all those places the same incentives exist whether you’re talking about sports or you’re talking about business you’re talking about government. So people can you know do the wrong thing but not everyone takes advantage of those incentives or follows those incentives. You know…

Michael Lewis: [00:02:35] This is a really great question. Like why some people do and why some people don’t?

Preet Bharara: [00:02:39] Yes. So solve that for us.

Michael Lewis: [00:02:42] If you could solve that problem we would have no problems. You know. So what’s the answer to that. Why is it that when a mob moves in one direction some people are able to step outside it and say this is wrong let’s not do that. I mean because in most cases what’s happening. I mean the financial crisis is again a very good example. Everybody pretty much is following these bad incentives and it’s really only a handful of people who are in the inside who say now let’s not do this and if they do it, they tend to get trampled. But the quality in the person who behaves well even when the world is paying him to behave badly I’d say you know this is going to sound trite but if there’s one kind of unifying trait in the characters I’ve written about who sort of stand apart. It’s – they still hear their mama’s voice in their heads. They were sort of they haven’t become so detached from who they were when they were little kids when their mom was trying to raise them and their dad was trying to raise them. They hear that voice and they kind of like and say no. That’s the closest thing I can find to an answer to the problem. It’s like raise them well and stay in their heads.

Preet Bharara: [00:03:54] So it’s basic stuff, right?

Michael Lewis: [00:03:56] Very basic stuff. And you know the other…the other interesting thing is especially you know…let’s take another case like the Flash Boys story where you’ve got essentially the stock market getting rigged. Thank you, stock exchanges, who figure out that they can make more money selling advantages to a handful of privileged people the high speed traders than they can just matching buyers and sellers in a neutral way. And this whole elaborate eco system gets generated really to basically fleece ordinary investors to skim off the trades of ordinary investors and then you have a couple of people inside of Royal Bank of Canada who find out what’s going on and instead of joining in the party they decide to set up an honest exchange. You know why do they do that. And it’s – the funny thing is it’s such a stark classic case of sort of like private sector heroism. You would think that the people who do it are self consciously heroic or self consciously more or less are righteous but getting those guys to say anything nice about themselves is extremely difficult. They’re very uncomfortable if you start talking about them. Well that’s very funny. It’s just sort of like how they naturally were they don’t like that they don’t like to think of themselves as the good people.

Preet Bharara: [00:05:14] What was funny about that is you first said that the corrupt people don’t think of themselves as corrupt. The good people don’t think…

Michael Lewis: [00:05:19] Now I’m saying that good people don’t think of themselves as the good people. You know it’s…

Preet Bharara: [00:05:24] So people just do.

Michael Lewis: [00:05:25] Because because anybody who’s really good isn’t spending a lot of time dwelling on his own goodness.

Preet Bharara: [00:05:30] So it’s about habit and good parenting.

Michael Lewis: [00:05:32] I think you know I think that has a lot to do with it. I think some people – you must have run across this in your previous life. A lot of people get into bad situations or do bad things because they’ve got some hole to fill. There’s a neediness about them. And a lot of the characters who I’ve admired who stood against corrupt or inefficient or broken systems are people who don’t actually have a great neediness. Like, they didn’t need me to write a book about them. When I smell someone like really wants me to write a book about him is when I lose interest. So all my characters have been kind of like wary, indifferent. They don’t care all that much what I’m writing. They’re not asking me to see the manuscript. None of that because they really sort of like they have some detachment from themselves and, and they are who they are. They know who they are and they aren’t they aren’t looking for the world to tell them who they are.

Preet Bharara: [00:06:23] It is that confidence, or is that just being comfortable in your own skin or is that the same thing?

Michael Lewis: [00:06:28] It’s kinda of a, you know, it’s a combination of things. I think it’s related to confidence but it’s a sort of self possession. You know some people seem sort of self possessed. I can remember when I was in, must be like in middle school when I heard a teacher refer to one of my classmates as self-possessed. I thought what the hell is that? And then I kind of looked it up and I thought well I want to be that. I don’t think I’ve ever quite gotten there. But you need people who just sort of like…that just…there’s a kind of armor around them and Billy Beane is this way. Brad Katsuyama is this way. A lot of the guys in the Big Short are are this way. And it enables them to sort of stand back from the world a little bit rather than do the things the world is encouraging them to do that might not be so good.

Preet Bharara: [00:07:12] I’m going to play this portion of the podcast for my daughter who is 17 because I have called her self-possessed and so I want her to appreciate how much of a compliment that that this.

Michael Lewis: [00:07:19] It’s a huge compliment. I mean it’s like one of those qualities that…I mean it sort of might be my favorite quality in a person because it leads to all these other things. It leads to not getting swept up in the moods of the moment. And it leads to kindness towards people who were sort of ostracized and on the outside. It leads to, it leads to generosity because you just kind of an awareness because you’re not when you’re not self-possessed when you’re sort of looking for the world to tell you who you are and looking at the world for constant affirmation looking in the world of fill you up because you’ve got this hole inside you, you just cease to notice much I think.

Preet Bharara: [00:07:56] And you just do right. And just one more point on this. Don’t move on to your book so self-possession is different from courage because some people have said famously that courage is the most important quality because other good qualities spring from that and good behavior spring from that. But it’s not courage. Courage is something…it sounds like you’re saying is too self-referential and too self-conscious. Self possession is just you don’t need other folks. And so you have to clear a path and you go and do the right thing you know as opposed to having to put on sort of a brave air of fearlessness which is what we think of courage being.

Michael Lewis: [00:08:32] You know I think people, right for a start, they sort of misunderstand courage in the first place is an absence of fear. Courage really is sort overcoming a fear. And courage is a…it can be there sometimes and not there other times in the strangest ways. I mean, like in the Red Badge of Courage, the protagonist is a hero one time and a coward the next. And it’s the same character. And I think that’s probably – I bet, I bet people who spent a lot of time in battle have seen this. That you know you don’t never know what’s going to provoke courage in a person. But so the answer is correct but I think you know you’re probably more likely to be brave in situations if you’re also self-possessed.

Preet Bharara: [00:09:10] I mean that’s a good analysis. So your book The Fifth Risk. Explain to everyone what the fifth risk is.

Michael Lewis: [00:09:15] Let me explain it this way – how I came up with the title. Twice when I was working on the book which is about essentially the the risks posed by the Trump mismanagement of the federal government. I asked people to list for me the top five risks they were worried about. Once it was in the White House and once it was in the Energy Department and the first time a woman in the National Security Council said you know it was like a terrorist attack with a nuclear weapon a pandemic to natural disasters at once that overwhelmed the country and she got to five and she couldn’t think of the Fifth. And I thought that was kind of cool that she had had four in her mind but she couldn’t think of what the fifth was. And I got the energy department I was talking to the chief risk officer of the Department of Energy of named John MacWilliams who’d come out of the private sector with a Goldman Sachs banker and he’d he’d catalogued all the risks in the Energy Department. I said, give me your top five. And he said you know Korean nuclear capabilities. The Iran deal falling apart the electric grid going down are being attacked. And the other one was I think a loose nuke or something having to do with a nuclear arsenal which the Energy Department oversees. And I said What’s the fifth he said. Took him a long time to think of it and then he finally says program management. But what I actually thought of the fifth risk is it’s not as program manager how this. The thing that’s hard to think about because the federal government that when you step back from it is managing this vast portfolio of risks many of them existential and at any given time we may be focused on one or two of them but this bureaucracy is managing many of them and it’s the ones that were not paying enough attention to the ones who are going to get us in trouble. So that’s what I thought of it as I thought of as the risks. We are not paying sufficient attention to. Well if you can’t think of them then how do you pay attention to it when you can think of them just you know you don’t you just don’t spend a lot of time thinking about what happens if the whole the three billion dollar research and development budget inside the Department of Agriculture is so mismanaged that we don’t have a food supply 30 years from now. You don’t think of what happens if the people who test our nuclear arsenal don’t do their jobs well or if some loose nuke is floating around Eastern Europe and the person the Energy Department who’s supposed to run down loose nukes is taken off the job because Trump thinks it’s not important. I mean they just you know it’s one thing after another. It’s not that you’re not thinking about it it’s that the system as a whole isn’t thinking about it properly. And I think this is the problem we face is that we’ve got unique in my lifetime and probably in the history of the country. You’ve got someone in the White House who is absolutely ignorant of the government. He’s meant to be managing.

Preet Bharara: [00:11:58] Is it true that the fifth risk you know given your nomenclature tends to be the long term risk? It’s the easier one to ignore. Not because it’s less dangerous.

Michael Lewis: [00:12:06] I think that’s a really good point. And I think that this is it’s these. The reason the guy at the Energy Department said program management, was he was, what he was thinking was we had these very long term problems that we’re managing. I mean most obvious one is climate change. But but he was thinking more narrowly than that but very long term programs were managing that require constant attention and they aren’t sexy or dramatic but if they go wrong they can go very wrong. And you know as an example he offered the Hanford waste cleanup in eastern Washington. The United States government during World War II created a plutonium manufacturing business the plutonium for the bombs that were dropped in Japan and they were working so fast that they pay no attention to the waste product and millions and millions of gallons of incredibly toxic stuff was poured into into the soil on a site that’s kind of 600 square miles and there are plumes of just lethal radioactive waste moving towards the Columbia River. And the Department of Energy spends three billion dollars a year trying to both clean it up and prevent the stuff from getting into the river. And if you ask. You know these people who are doing it honestly how long this is going to take and what it’s going to cost. They say 100 billion dollars in 100 years and that’s it’s an awesome awesome task and the costs of not doing it well is is very very high. But it’s like nothing much happens day to day. So no one pays it much attention.

Preet Bharara: [00:13:43] And the incentive structure you spoke about earlier means that you don’t get a lot of credit for it if you deal with it now because nobody’s really thinking about the problem anyway. And so if things go fine nobody’s being incentivized to take care of those things to the extent you are not self-possessed and you care about doing things because people will pat you on the back. There’s no pats on the back for that kind of thing.

Michael Lewis: [00:14:02] Well this is a really good point that generally our attitude towards our federal workforce is so screwed up because all we do is abuse them. There’s lots of downside, no upside. And this creates several problems for the country. But apropos of your, this example, there’s a fellow in Colorado who has handled a similar problem in Rocky Flaks Colorado. It wasn’t as big a waste cleanup but I think he brings it in at like 15 billion dollars under budget and 30 years ahead of schedule. It’s something that he’d done it in the private sector he’d be a billionaire. He should but he should build hotels. No one knows his name. I mean I mean no one’s ever heard of him. There are people in the civil service who perform extraordinary feats and no one hears their names because there’s no real upside. They don’t get paid a lot of money. Nobody pats them on the back. And of course what this does is on the level of the individual is it creates huge risk aversion. If all you’re going to do is be punished for the bad things and not rewarded for the good things you’re not going to take risks you should take. And you see problems that caused by this I mean the Department of Energy. Well actually across the government there are interesting investment funds funds that are not big piles of money but funds that are designed to channel money into very long term research that industry will do. So the Department of Energy this would be in the energy space. And these funds have helped create the solar power industry and the wind industry. But these funds the people who manage them dispose to take the kind of risks that will fail half a time or more and they don’t they manage to responsibly kind of thing. Because if something fails they end up in the newspaper. You know one of the reasons I wrote the book maybe the biggest reason I wrote the book is I came away from my travels inside of the Trump administration awed by the caliber of the person who was in the civil service. I didn’t have any sense of who these people would be and it was incredible to me over and over to find these people who were very mission driven who could be making a lot more money in the private sector but who saw the crying need for a person of quality to be in these job very important jobs in the federal government. And I thought you know these are the best among us and they need to be celebrated and the country needs to change its narrative about who these people are and why they’re there and what we think of them because otherwise we’re all doomed. Otherwise essentially we’re going to get the government we think we have. And we’re going to get a government that’s horrible.

Preet Bharara: [00:16:43] I love the fact that this book is quote unquote “a love letter to federal workers” many of whom I know. But who’s the guy who should have said let’s rake the forest floors to prevent wildfires.

Michael Lewis: [00:16:53] Well that’s funny. So Robert Bonnie who makes a very brief appearance in the book – I mean this shows you how….this is an example of the fifth risk. I’m wandering through the Department of Agriculture asking people basically what do we need to know about this place. What are the risks. We need to worry about. And I get to Robert Bonnie who ran the Forest Service the Forest Services inside the Department of Agriculture and he says to me wildfires. And he says this is a really really big deal and nobody’s paying attention to it. This is two years ago. And I went out to the wildfire the center of for fighting wildfires is out in Boise Idaho. I wouldn’t spend a day there. I thought I was going to write about that now. This will never happen. It’s just kind of I kind of dropped it. So all you have is this kind of one line he says wildfires and then I move on from him. You know that was something that we obviously were not paying sufficient attention to and we’re paying a price. So he did have things that he thought we should do. But he also had a sense that the Trump administration was so inept that there was no way to know when or even to tell these things to.

Preet Bharara: [00:18:02] So you start turn out the book talking about the transition from the Obama administration to the Trump administration and how all this effort had been made and binders were being filled with memos and people were documenting things so that there was a transfer of expertise and giving of information about ongoing projects so there would be continuity. And Chris Christie sort of appointed himself the head of the transition and then it all went to crap. How’d that happen?

Michael Lewis: [00:18:26] Yes well this is I think a story that can’t be told too often or in too much detail because by law both the outgoing president and the incoming administration are required to spend many, many, many, many months before the election preparing for this transfer of power because you know our government is not like other democracies. It’s run by it’s run by political appointees. There isn’t a permanent civil service at the top at the top or 4000 people the president appoints. And these people have to manage these places and very often they’re not suited they’re appointed for political reasons and they’re not terribly suited to the jobs in the Trump case. That’s the extreme. That’s very true. But they can learn. Right. And that’s why the outgoing administration spends takes a thousand people smart people and has them spent six months preparing to teach the people coming in what they’re dealing with. Because most of these things are not ideological matters. Right. You know the Center for Disease Control is going to tell you how they dealt with the Zika virus so that if it happens again you at least know how they dealt with it. And it’s that sort of thing it’s their technical matters and the Trump administration. I mean it was really extraordinary. There was a transition team hundreds of people waiting to go in the day after the election and the day after the election. Trump fired the whole operation. So there was absolutely not a soul there. So you had this strange picture of people wading across the administration on the Obama side in the Department of Energy Agriculture Treasury Defense everywhere for people to show up so they could say this is what the government’s doing. And nobody shows up. And it’s so bad that so I finished the fifth risk. I finished writing the book in August so I probably got my last. I went and got the briefings right. So in July I probably had my last briefing. It was a serious thing. It was in the National Weather Service and nobody had been given the briefing before I found myself over and over getting these briefings that no one had been given.

Preet Bharara: [00:20:23] You should go into the government. Probably could solve a lot of stuff.

Michael Lewis: [00:20:27] Well, you know, what I do know is that if you have a willingness to learn and listen you’re already better qualified than most of the people he’s put in there because they didn’t need not only did they not know anything. They were dismissive and contemptuous. They don’t care to know anything. So there’s no way you can go in and run the operation like this. I would be no good at it. I have no administrative abilities. I’m just that I don’t know. But I know 100 people who would do a great. And it’s it’s sort of like the knowledge is there you just have to want it.

Preet Bharara: [00:20:56] I mean you say an interesting thing. You say look there are all these people who are prepared to teach and they had a curriculum you know in terms of those binders and memos and everything else. But that’s not enough. The people who you’re trying to teach have to be educational.

Michael Lewis: [00:21:06] That’s exactly right. And you know they tell themselves and I’m sure their supporters tell themselves oh what can we learn from the Obama administration or what can we learn from the deep state these permanent civil servants as if they’ve got some whole other plan about how to run the society. When the truth is they’ve basically got no other plan for how to run this society and they really do need to know all this stuff.

Preet Bharara: [00:21:30] You wouldn’t have this issue in city government. Right? So you have one outgoing administration in a big city in the north let’s say in an incoming administration you would think the incoming administration would want to know how it is you clean snow effectively because that’s the down you know as the old adage goes in New York if you can’t create a street to the snow you’re not going get reelected. Why is it different in the federal system where people think of this as the deep state and I think they know better and they don’t have to learn from other folks when as you say so many things that happen the government whether it’s forest fires or preventing disease or anything else is not at all partisan or ideological.

Michael Lewis: [00:22:03] I think it’s as simple as it’s really complicated and it’s a long way away. Everybody’s got the city right under their nose if the trash doesn’t get picked up. You notice that day. Right. But if underbrush isn’t being cleared in national parks or if the nuclear weapons aren’t being properly assembled you might not find out for years. So I think it’s a matter of the public’s attention and I think there’s also this this other problem of the whole country needs a civics lesson that we’ve civics is just the idea that you’re supposed to understand how your federal government works has vanished from the educational system. And you know I found – I mean I live in Berkeley California and I’m surrounded by people who are obsessed with national politics. I mean I was so obsessed with national politics they might not notice that their garbage didn’t get picked up and that was good I have a file. I have a file of a piece. I’ve never written. It’s called Why Does My City Council have a foreign policy. And so here of all places people you would think would really know about how the government works. But I would be at lunches or dinners or wandering around the streets of Berkeley and people would ask what I’m working on I’d say oh you know I’m writing something about the energy department and basically I get a blank stare back like what does that do. And you know Oh yeah they’re in charge of the oil reserves or something. But in fact it’s the Department of Nuclear Weapons and I don’t you know one of the reasons I was so engaged with the subject is I didn’t know I had no idea what went on in the Department of Agriculture or the Department of Commerce. So I think we’ve had such a long period of relative peace and prosperity that there has not been the urgency to know.

Preet Bharara: [00:23:44] You make a very important distinction that I want to make sure we crystallize even a little bit more in the time remaining and that is it’s not just that people come in and do a bad job. Being in charge of certain things with government agencies or companies or anything else because they lack expertise. It’s also because they lack the will to learn. And they have a disdain for it. And so one of the department you talk about is the Department of Energy which is run by Rick Perry and I want to read you my favorite description of the heads of that department from the New York Times maybe a couple of years ago and then ask you a question and they’re describing Rick Perry’s predecessors in an article in The Times by Karl Davenport and David Sanger. Give them credit because it’s one of the best juxtapositions that I’ve seen before Mr. Monise the job belongs to Steven Chu a physicist who won a Nobel Prize. For Mr. Monise, the future of nuclear science has been a lifelong obsession. He spent his early years working at the Stanford Linear Accelerator. Perry studied animal husbandry and led cheers of Texas and M University so making clear that he was not as qualified was a Nobel Prize winner but couldn’t Rick Perry or someone like him still be good at the helm of an agency about which he or she does not have a lot of expertise if they had some different quality.

Michael Lewis: [00:24:59] Absolutely. You know I don’t think you have to be a nuclear physicist to run the Department of Energy and in some ways it might be a little bit of a handicap because you might get too much in the weeds and stuff when you should delegate. But what you do have to have is a basic respect for the institution and respect for the for the knowledge. And Rick Perry I mean my God this man as a presidential candidate got on stage as governor of Texas and called for the elimination of the Department of Energy and they couldn’t remember its name in a public forum. He said we needed to get rid of this agency. And he clearly didn’t know what it did and then when he gets to Washington and gets offered to run it he goes and he’s told what it does and he goes oh I was wrong. Sorry about that. I mean that should be disqualifying right there. And you know one of the things that has surprised me about many of the Trump appointees and Perry is an example of this is that if you are genuinely patriotic if you genuinely love the country and someone offers you a job that you know you’re not qualified to do. You don’t just take it you should say no right. You should say actually I don’t know anything about this and I embarrass myself on a public stage calling for the elimination of this place really someone who has a who can start with a cleaner slate should come in and do this. But I do think having said that it’s absolutely true that someone who’s got great managerial ability and ability to get their minds around things very quickly and get to the nub of complicated matters very quickly and find good people around him. I mean, that person could do a great job.

Preet Bharara: [00:26:35] What about Wilbur Ross of the head of commerce?

Michael Lewis: [00:26:37] He’s 83 years old and falling asleep in meetings. I mean…

Preet Bharara: [00:26:41] That’s okay, sometimes.

Michael Lewis: [00:26:45] Well…alright…let’s go…we’ll take it one step further. He’s not only falling asleep in meetings but when people come to him and say you know Wilbur this isn’t actually a, a Department of Commerce that you know it does not. It’s not allowed to do business. And it actually isn’t even all that important in the trade negotiations which I think he thinks that’s what he’s going to do what it actually is is it’s a department of data. It’s the Census collects the economic statistics in the whole weather services inside of it all the weather data is in it all the climate data is in it and and he says “yeah I’m not all that interested in that stuff.” 90 percent, 95 percent of the department’s budget is basically the collection and analysis of data. So he’s not interested in it that. That’s not…it’s not a promising start.

Preet Bharara: [00:27:33] Let me hit a couple other things quickly before you to go. You have said – lots of different people try to analyze what it is that Trump does to institutions and you’ve called him a “trust-devouring machine.” You know he takes things that people still have trust in and undermines them. Institutions. We talk about the press, we talk about the government. We talk about, you know, folks who are in the civil service. He’s done that with the media as you’ve written. What does that mean for him and risk to financial markets? And as we tape this, it’s not going so well on Wall Street.

Michael Lewis: [00:28:04] He was very lucky to inherit a healthy economy in a kind of a good spot. To answer your question, I’ll tell you what I’m most worried about. And it’s that he really does have a nose for…he doesn’t just devour the trust. He sort of feeds on it in some odd sick way. And if you look around and you say “well, where is there still quite a bit of trust left in this society that he might undermine?” The natural place is the dollar and treasury securities. And it’s very easy to imagine him when things get bad, when the stock market’s doing poorly when the economy starts to not look so good when interest rates are going up and the deficit again we start talking about – it’s amazing we haven’t, we’re not talking about the deficit…But in any case, I can easily imagine him freelancing in some arena in Alabama. And he says you know they talk about the deficit but who do we owe that money to? We owe it to the Chinese and they stole it and he said we don’t have to pay that back. It would be so in character and it would also be in character of his audience of his fans to stand up and cheer. We’re not going to pay the Chinese back. We owe them two or three trillion dollars. They’re sitting on all these treasury securities. And that…it’s a, it’s a hard technical matter just to selectively default like that. And probably you couldn’t do it but you wouldn’t even have to…that… The minute he found a political market for that view he could create a catastrophe. A financial catastrophe. I worry when people ask me where’s the next financial crisis come from, I think it comes from Trump. And the question is how. And this is one path.

Preet Bharara: [00:29:41] So is that, is that a fifth risk or is that a fourth risk?

Michael Lewis: [00:29:43] It’s totally a fifth risk because nobody – as far as I know, I’m the only one talking about it.

Preet Bharara: [00:29:48] Well I’ll start talking about it, too.

Michael Lewis: [00:29:49] Play it out in your head, Preet. Because you know what happens is that the minute that you have questions about the creditworthiness of the United States and about the soundness of the dollar I mean you’ve got people wanting to haul the dollar as a reserve currency. This is the natural thing that follows from the U.S. ceasing to be the leader of the free world. I mean, why, there’s no good reason why we should be the financial leader of the free world. And I think we’re not that far away from that kind of scenario. And it’s a different sort of financial crisis that provokes because you know, in the 2008 financial crisis you had an entity that could step in and calm everything down. And it was the United States government. When you no longer have that as a backstop, what happens?

Preet Bharara: [00:30:33] All you have is kindling.

Michael Lewis: [00:30:36] Yeah.

Preet Bharara: [00:30:37] Michael Lewis, congratulations on your success. Congratulations on your book and thank you for spending some time with us.

Michael Lewis: [00:30:42] Thanks Preet. Bye bye.