Sawdust and eucalyptus scent the air. Old men and young women in spandex cycle, jog and walk along a dirt track that cuts through the dried-out hills above Berkeley, California.
As the afternoon sun drops, its rays turn everything the colour of turmeric. Michael Lewis, traipsing up a hill, panting slightly, is expounding on the state of the world.
“Being pessimistic is stupid,” says the bestselling author of The Big Short and Moneyball. “I don’t feel hopeless, and part of it is because I still wouldn’t really swap places with any other time in history. You gotta remember that. If you’re pessimistic, you live the bad thing twice: once when you’re worried about it and once when it happens.”
As he says that, we come upon a sudden clearing. What were once towering eucalyptus trees have been reduced to freshly cut tree stumps, scattered strips of bark and leaves. It’s the detritus, Lewis conjectures, of a hastily engineered firebreak.
Ring of Fire
“This used to be all woods. Wow,” Lewis says. “Have you been poised to evacuate? We have.” A couple of weeks before we meet, wildfires raged through the nearby hills, plunging the richest region of the richest state of America into a bizarre, developing-world-style dystopia. Utility companies, seeking to prevent fires from power lines knocked down by heavy winds, pre-emptively cut electricity to more than 3m people. Blackouts lasted three days, some longer. The tinder-dry hillsides ignited anyway.
If the wind had shifted direction, Lewis’s home, a Spanish-style affair with sweeping views of San Francisco Bay, may well have been incinerated. “There was just no way to stop it,” he says. “The mayor told me that it was gonna take 20 minutes to get from there to our house.”
Ash rained down on the region. People ate by candlelight in multimillion-dollar homes. It won’t be the last time. Five of California’s 10 worst wildfires have occurred in the past decade as extreme weather becomes the norm. Heavy rain leaves behind brush that turns to kindling in the bone-dry months that follow. The Golden State has turned into a tinderbox, where climate change is rearing its head.
“Have you been poised to evacuate? We have.”
Surely, I ask Lewis, climate change is on your radar? The 59-year-old has become one of the world’s most successful authors — and a favourite of Hollywood studios — because he has a knack for demystifying big, complex issues. He has written 18 books, three of which have been turned into films — The Big Short (about how the 2008 financial crisis was triggered by the US housing bubble), Moneyball (which quests after secrets to baseball success), and The Blind Side (about race, privilege and American football). Together, they have grossed over half a billion dollars.
His approach is simple. Pluck out a few quirky, colourful characters and tell their stories; in so doing, illuminate a bigger story. In The Big Short it was Michael Burry, an eccentric hedge-fund manager (played by Christian Bale) who profited enormously by betting on a bubble years before others; in Moneyball it was Billy Beane (played by Brad Pitt), the general manager of the mediocre Oakland Athletics, who won success by using statistical analysis to scout undervalued players. Where others see the chaos of markets, sport, life, Lewis peers through it. He sees the matrix, reaches in and pulls out its most interesting stories. Climate change, you would think, has all the ingredients of the next blockbuster. Natural disasters. Political intrigue. The potential extinction of the human race!
There’s only one problem: Lewis hasn’t found the Billy Beane of climate change. Yet. “Think about this as a literary exercise. Why is it so hard to figure out a way to get people interested in climate change? There’s been no shortage of people writing terrifying books about it.” Lewis has three kids. The oldest, who is at college, is also on his case about it. “She accuses me of not doing my duty. She badgers me about it, like, ‘Why aren’t you writing about this?’ The answer is that the importance of the subject is only one criterion. You have to find a way to do it. It’s going to require someone to electrify the material.” He goes on: “The obvious, won’t-ever-happen version would be if I found some character in the financial world who figured out how to make huge sums of money off the world falling apart this way. Then, yeah, all of a sudden you have something.”
In other words, Greta Thunberg does not fit the bill. Besides, there are plenty of other pastures for Lewis to roam: the rise of immigration, the fall of capitalism, the trembling of democracy. We leave the tree stumps behind, arriving at a peak fittingly named Inspiration Point. Into the matrix we go.
Capitalists Unite
In August, America called time on capitalism as we know it. The chief executives of nearly 200 of the largest companies, from Amazon to Apple, Pepsi to Walmart, held up their hands and, in an open letter, admitted that the old way of doing things, which puts the pursuit of profit above all else, was broken. They pledged that, from now on, protecting the climate, fostering diversity and compensating employees fairly would be as important as making money. It was a remarkable reversal of a capitalist orthodoxy expressed most famously by the system’s high priest, Milton Friedman, when he declared: “The social responsibility of business is to increase its profits.”
The letter was met with, depending on who you asked, a jaundiced eye, a yawn, perhaps a polite golf clap. What it made clear, though, is that the 1% is worried. In a world where populism is on the rise, the middle class is being squeezed, and executive pay has scaled new heights, it felt very “of the moment”, even if one doubts the gesture will be followed through with action. Lewis, for one, thinks it marks a genuine shift. “I’m not going to be cynical about it. It’s an act of self-preservation,” he says. “I actually do think there are a whole bunch of people who run big corporations who are mortified by Donald Trump and with the direction that society is going. The risk of inequality getting so extreme that we have a revolution is a risk that has to be managed.”
There may also be more basic motives. “I come from a place where I could be the CEO of a corporation. I went to a fancy school. I came from a wealthy family. But I would still have these kids,” Lewis explains. “And if I had to come home every day from running Procter & Gamble, my child would still say, ‘What the f*** are you doing?’ ”
“The risk of inequality getting so extreme that we have a revolution is a risk that has to be managed.”
Lewis grew up in a well-to-do family in New Orleans. He studied art history at Princeton University before earning a master’s degree in economics at the London School of Economics. It was the yuppie era; he was convinced Wall Street was his destiny.
He got his break thanks to a cousin, Baroness Linda Monroe von Stauffenberg, who invited him to a banquet hosted by the Queen Mother. She ensured he sat next to the wife of the London head of Salomon Brothers, hoping he might charm his way into an interview at the New York investment bank. He did. A job offer soon followed.
Salomon Brothers, however, simply provided him with too much literary material. It became the tableau for his first book, Liar’s Poker, a fly-on-the-wall account of life inside a bank full of swashbuckling, foul-mouthed traders, or, as he termed them, “big swinging dicks”. It was an instant success, and became a defining portrait of the “greed is good” world of 1980s high finance.
London made Lewis a writer. He stayed in the capital for seven years. He wrote for The Spectator and the Daily Mail’s You magazine. He and a handful of other students played basketball for LSE, travelling the country and mostly dispatching inferior teams whose players weren’t almost all American. “It was such a great way to see the country. Our games got written up in The Times!” he says. He likens Britain to a porcupine, explaining: “In the beginning it’s resistant, it’s very sticky. But the minute you’re in, you can’t get out. My British friends are relentless and I’m really glad they are. They require that we stay friends, which is not true of all but a couple of my American friends.”
A defining portrait of the “greed is good” world of 1980s high finance.
Although he loves the country, he is vexed by Brexit. He questions whether it will happen — “It feels almost not real because people keep refusing to do it” — and why the vote was held in the first place. Giving people a say on such a monumental question, he says, is “just crazy”. This is clearly something he has been ruminating on. “One of the ways democracy is broken,” he says, “is there’s too much of it. This tendency towards plebiscites, towards the people’s instantaneous expression of whatever the popular opinion is at the moment …” He trails off, but picks up the thread again. “Not having any understanding of the issue never stopped anybody from voicing an opinion. You give people a ballot, you never know what’s going to happen.”
Quite. This impulse to hand decisions to the people is particularly ill-timed, Lewis argues, given that it coincides with the rise of tribalism. “Everyone is being forced to declare their political views, their allegiances and their tribal identities, and it makes people less attracted to each other. It bothers me a lot that what’s important is not what you say, but who’s saying it. It’s not healthy.”
Dunces of the Confederacy
He tells a story to illustrate the point. A couple of years ago, the mayor of New Orleans removed statues honouring Confederate leaders. Lewis was opposed to this, arguing it was erasure of a history that bears remembering. When he said so in a social situation, a “well-known actress” was appalled, he recalls. “She treated me like I was in the Ku Klux Klan.”
A black sculptor made the same argument at another event, three years later. The actress was there. “Afterwards I ask her, ‘What did you think?’ And she goes, ‘That was great! He was so right.’ She had no recollection of what she told me.”
He shakes his head. “You’re getting to a world where people have no incentive to try to imagine themselves into the skin of another person, and what you want is just the opposite.”
“She treated me like I was in the Ku Klux Klan.”
Walk into Lewis’s writing studio, and you encounter what a Hollywood set designer might dream up if tasked with creating the lair of a “serious” author. It is in a cottage sitting at the bottom of his drive, shaded by towering redwood trees. The walls, a moody dark wood, are lined with books and family pictures. The wire wastebasket next to his desk is full of screwed-up, yellow legal paper.
On the far end of the room, five enormous dictionaries sit open, like in a museum display. “Three of them are the OED [Oxford English Dictionary],” he says. “When I’m eating lunch, sometimes I’ll mess around and go through them.” Who hasn’t leafed through a few pages of the letter Q while wolfing down a sandwich? Next to his desk, a writing platform straddles his treadmill, so he can type and pace. The hike we’ve taken together was his idea. “Totally up to you,” he’d said when I arrived, “but there’s something about walking” — so we’d piled into his SUV and headed for the hills.
It is easy to understand why Lewis is so good at what he does. He is a natural storyteller and an earnest interlocutor. He asks lots of questions, and comes off as genuinely curious. This approach allows him to extract stories from people, to gain their trust. “The best characters for me,” he says, “are people who don’t know they are characters.”
Gambling on The Fifth Risk
Two subjects are at the forefront of his mind these days: bureaucracy and his old love, baseball. In both, Lewis has his pick of people unaware that they make a great story. His latest book, The Fifth Risk, centres on the faceless legions working for the US government. It is more interesting than it sounds.
Government, in his framing, is the underappreciated bastion of society, the ultimate manager of risks both obvious (nuclear weapons, hurricanes) and less so (cyber-attacks, societal breakdown). And, in Trump’s America, bureaucrats are under attack. Lewis sets about explaining why we should care by describing what happened when the president took over in 2017. It makes for unsettling reading.
He opens with the keeper of the keys to the world’s largest arsenal of nuclear weapons: the department of energy. When Trump won the presidency, his team’s first order of business was not, say, getting up to speed on how to keep the nukes on lockdown, but finding out who in the department had attended climate-change conferences. They wanted a list.
Soon, the offenders were being shifted to far-off outposts, or given jobs well outside their bailiwick. Many got the message and left. The president went on to eliminate all climate research, halve the cash for securing the electric grid against attack, and gutted the nation’s nuclear research labs. Lewis writes: “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.”
This is the so-called “fifth risk”. It is the death of expertise, the exaltation of ignorance to the point that the brightest, most capable people will gradually fall from, or be cut from, their positions. Standards slip and controls slacken, triggering a continental drift towards calamity.
“Trump’s budget, like the social forces behind it, is powered by a perverse desire to remain ignorant.”
Where will it all lead? It’s hard to say. One of the bureaucrats Lewis interviewed summed it up best: “It’s what you fail to imagine that kills you.” Lewis plans to write a sequel if Trump is voted out. “I don’t know what I’m going to find, I just know I’m going to find stuff,” he says.
The Fifth Risk doesn’t stand much chance of being optioned by Brad Pitt. Bureaucratic travails just don’t translate to the silver screen. But if America goes to hell in a handcart in some spectacular way, it may well provide the clues to how it all went wrong.
A Television Series
The other project Lewis is developing revolves around baseball, but he uses the sport as a vehicle to tell a more serious story about immigration. “The mark of a civilised society is the way it treats strangers. A barbaric society treats them badly, a civilised society treats them well.” It is a television series about Cuban baseballers, who risk their lives escaping the communist regime to play in America’s professional leagues. Those who safely cross the Florida Strait — often in flimsy inflatable rafts — are guaranteed fame and fortune. Capitalist America is another planet compared with the society they leave behind.
Lewis admits it is a “sneaky way” to address a hot-button issue. He almost never does so head-on. He doesn’t crusade. Instead, he searches for the side door. Climate change? Tribalism? “I don’t have the balls to deal with that as a writer,” he concedes. “I don’t want to go get in a fight with everybody. I wouldn’t win it, and it would be pointless.” He much prefers to illuminate a subject and let people draw their own conclusions. “It’s more fun to leave people with the right to think whatever they think.”
Cuban baseballers, who risk their lives escaping the communist regime to play in America’s professional leagues.
Towards the end of our walk, and past Inspiration Point, we dip to the bottom of the valley, skirt a creek, and the air is suddenly crisp. What, I ask, is the thing that has him most worried? What is the risk that, as his bureaucrat friend put it, we are failing to imagine? Another financial crisis, he says. It is not a terribly original prediction. There is a veritable chorus of economists prophesying recession. His forecast, though, is different.
Lewis rewinds to the financial crash of 2008. “Why were we able to bounce back in a way that was so much easier and less painful than in 1929? Why didn’t we have a great depression?” he asks, before answering his own question. The US Treasury pumped an unprecedented amount of cash into the market, bailing out banks and businesses to keep the fire from spreading. The reason it worked was because no matter how much debt America was racking up, the world believed that Washington was good for it. Uncle Sam wasn’t going to default on its loans like everyone else was. It was the safest bet in the world.
Lewis’s bet is that if Trump is re-elected, America’s record $22tn debt, which is somehow climbing despite a booming economy, is “going to become an issue”. He paints an unsettling picture of what might happen next. “I can see Trump getting up in front of one of his crowds, and saying, ‘All these experts talk about the deficit. They don’t know what they’re talking about. I know how to manage debt, I’ve done it my whole career. And let’s first ask: who do we owe this money to? The Chinese. And how did they get that money? They stole it in unfair trade deals. Why are we going to pay them back?’”
Sow a seed of doubt, and the markets do the rest. The value of the dollar falls. Interest rates rise. Faith in America falters. The trade war with China ratchets up. Economic armageddon ensues. Lewis says: “So there’s the beginning of the next financial crisis, which I don’t think anybody has really thought through.”
Lewis, however, is chipper. Perhaps because he knows that, regardless of how it all plays out, there will be a good story in there somewhere. All he needs is a character.
