Book Review: The Fifth Risk by Michael Lewis

Michael Lewis’ newest nonfiction book gets its title about 70 pages in.  A Department of Energy risk officer is discussing the various different avenues for disaster at the department.  Given that the DOE oversees the nation’s entire stock of nuclear weapons, and the materials used to make them, risk is at the forefront of the Department’s mind at all time.  The officer, John MacWilliams, outlines how he considers risks.  By his estimate, there are essentially four types of risk.  These four types are actually organized on an X and Y axis where one axis represents likelihood of occurrence and the other is based on the cost.  So something like a nuclear weapon exploding in transit would be very unlikely but it would have extreme consequences.  MacWilliams elaborates on his system while giving Lewis a tour of a facility in what used to be Hanford, Washington.  The Hanford site used to produce the vast bulk of plutonium in the United States Arsenal, right up until the late 80’s.  Today, the Hanford Site is in decline and largely unkempt despite the fact that it still holds vast, almost incalculable amounts of nuclear waste and is near the Columbia River.  MacWilliams uses the site to illustrate his “Fifth Risk:” Project Management.

It makes some amount of sense to follow up a review of a book by Bob Woodward with a review of one by Michael Lewis.  While Lewis may not have the same clout as Woodward, he comes pretty damn close.  If Woodward could be described as the nation’s preeminent Presidential reporter, then Lewis would be our finest Big Data Reporter.  That said, the men enjoy different types of celebrity.  Woodward’s nonfiction is praised for the depth of its reporting and the eloquence of his writing but Lewis’ books are made into award-winning films with big name stars and directors.  While Woodward writes from a largely detached Gods’ eye view, Lewis routine inserts himself into his own stories and injects a winningly wry sense of humor.  This can be traced back to his first book, Liar’s Poker which is both an autobiographical look into the bond trading world of the late 1980s and a history of the creation of that market by luminaries like Lewis Ranieri.  His sequel to Liar’s Poker, The Big Short helped to explain how Ranieri’s brainchild directly led to the 2008 Financial Crisis.  Both the book and its film adaptation by Adam McKay were praised for making the complexities of Wall Street finances simple to digest and easy to understand.

In many ways, Lewis’ favorite subject could be described as action and consequence.  He takes a broad, data-driven view of a subject like sabermetrics (Moneyball) or online trading (Flash Boys) and unravels the consequences of their implementation.  Lewis pairs this study with a more personal story about a person or group of people who were/are at the center of the events being discussed.  Lewis has a knack for finding interesting characters to take center stage in his books.  In Boomerang: Adventures in the New 3rd World, for instance, he found a group of surprisingly high profile Greek Orthodox monks who are at the center of the Grecian financial collapse.  The Fifth Risk is no different.  This time his subject is the Federal Government and the election of Donald Trump.  But instead of focusing on Trump’s administration like so many other authors, Lewis has turned his eye towards the machinery of operating our nation.  His subjects are the Departments of Energy, Agriculture and Commerce.  These three departments of the government oversee extremely important functions that keep the United States running but none of them are ever really examined in close detail.  What’s more all three of them are facing similar challenges: the implementation of leadership that completely misunderstands their purpose.

This is why “the fifth risk,” of the title is project management.  What happens when you hand the vastly complex bureaucracy of the Federal Government to people who have no inclination or interest in operating it?  Well, as Lewis and his subjects discuss, mostly bad things are the result.  At this point, I’m more or less convinced that it’s impossible to write about the current Administration without revealing some kind of sordid details but in this case, I’m actually inclined to have at least a modicum of sympathy for most of the parties appointed to oversee these programs.  A key theme in The Fifth Risk is the difference between perception and factual reality.  It’s somewhat understandable, for instance, why the Trump Administration would appoint a businessman like Wilbur Ross to be Secretary of Commerce.  But there’s a catch.  US law actually prevents the Department of Commerce from engaging in any business of its own.  The actual purpose of the Department is to serve as the federal government’s repository of data.  Commerce oversees everything from the United States Census to the National Oceanography and Atmospheric Administration.  The Department employs hundreds of highly trained and well-educated scientists who collect this data and process it in various forms.  In just one example, the National Weather Service runs thousands of weather forecasts every day using a process called Ensemble Forecasting.  But here’s a question (and answer honestly) did you actually know any of that, average reader?  I know I didn’t.  So it’s somewhat believable at first that an Administration might jump to conclusions concerning who should oversee the Department.  But that’s the thing.  I’m a 26 year old blogger living in the Pacific Northwest.  I’m not exactly expected to know this stuff without reading about it.  If you’re expected to takeover and run the vast mechanism of our country, that’s another matter entirely.

Each chapter of The Fifth Risk follows a similar narrative: the department prepares to welcome the new Administration and give them a detailed rundown of their responsibilities and capabilities.  The Administration is slow to respond before eventually (and seemingly without fail) appointing leadership that is actively hostile to the mission of the department in question.  This is where any sense of sympathy for the new leadership goes out the window.  There’s a difference between being uninformed and being willfully ignorant.  Lewis and his subjects go out of their way to illustrate this difference multiple times.  For instance, it’s one thing to not understand that the Department of Agriculture oversees billions in small business loans to rural communities.  But it’s another thing entirely to disregard the work the USDA does in those rural communities.  In this regard, the true fifth risk might not be mismanagement as a whole but destructive ideology.  Both the Departments of Agriculture and Energy are faced with new management that is actively hostile to the idea of Climate Change.  Climate Change only plays a relatively minor role in the operation of both of these Departments and this causes the professionals who work there no amount of grief.  The Department Energy oversees the entire US nuclear arsenal, why on Earth would it matter who has been involved with research involving global warming?  One interviewee directly compares the feeling to that of McCarthyism in the 1960’s.

If I had to find one complaint about The Fifth Risk, I might be inclined to say that Lewis’ structure could use some work.  At first, the book is set up like one long narrative, complete with a prologue following former governor of New Jersey, Chris Christie.  Governor Christie appoints himself as the leader of Trump’s transition team, only to learn how woefully unprepared the Trump Team is for the task.  From there, Lewis essentially focus on three separate stories with similar themes.  But there’s no real conclusion.  The book ends on a very resounding metaphor that genuinely resonates with the rest of the story but there’s no real denouement.  But to be fair to Lewis, there’s no real denouement because the story isn’t over yet.  We’re not even two full years into the Trump Administration and this slowly unraveling disaster continues to surprise and terrify the American public seemingly every day.  In the week I’m writing this, the United States Ambassador to the United Nations, Nikki Haley has abruptly resigned her post.  Up to this point, Haley has been considered to be a rising star both within the Administration and the Republican Party as a whole.  But I digress.  That might be the biggest issue with people writing books about this period in history.  At the risk of sounding morbid, we haven’t actually managed to weather the storm yet.  In time, we will hopefully be able to look back on this era of chaos with some hindsight.  That’s why so many of the books about our modern situation feel like boots on the ground reporting.  There’s more than enough material out there to write a smart, engaging piece of literary journalism but I fear that a lot of these pieces end up going to print without a really solid conclusion.

That said, I genuinely enjoyed The Fifth Risk, it’s one of my favorite books of the year so far.  Michael Lewis is the rare author can make understanding complex, statistics-driven narratives engaging.  I don’t know if The Fifth Risk has the same inherently enthralling qualities that made The Big Short and Moneyball into award-winning films, but it’s a worthy addition to his bibliography.  It’s a smart, and often times funny look into the hard work that is required to maintain the complex systems of government in the United States.  If anything, the real impact of this book should be a greater appreciation for the men and women who go to work every day, using their incredible amounts of skill and dedication to make this nation what it is.  With any luck, The Fifth Risk‘s existence will solve the problem that it’s positing, and by changing our perceptions for the better, we can work to safeguard these institutions against further corruption or dismantling.

The Fifth Risk is available now through W.W Norton and Company


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