Brief Review: “The Fifth Risk” by Michael Lewis

Lewis is such a remarkable writer that I sometimes find myself envious of his ability to forge a compelling story where there doesn’t seem to be anything. It’s useful to contrast The Fifth Risk with Bob Woodward’s Fear, which I inhaled last month. Woodward’s book ferrets out things that happened — crescendos of malevolence and arias of incompetence — unbelievable though they sometimes seem.

In contrast, Lewis’ amazing little book — it arrived Tuesday night and I finished it early Thursday morning — takes as it’s starting point a series of startling non-events all involving the Trump administration. Since Trump didn’t expect to win, he didn’t take building a transition team seriously (and even thought that the money Chris Christie raised to fund a transition team was tantamount to stealing from Trump). Then Trump won, and stilldidn’t see the need for a transition team.

The Fifth Risk is the story of three critically important and misunderstood Federal departments — Energy, Agriculture and Commerce — that the Trump administration first ignored and then politicized upon taking power. Literally nobody showed up for weeks before and after the inauguration to learn what these departments do (short version: your eyes will widen and your jaw will drop at how much). No Trump administration officials arrived to take the meticulously prepared briefings, and when they did the meetings were short and political.

Lewis decided to take the briefings himself.

This book is the result of a months-long crash course in what the Federal Government does, how it does it, and why it matters. That might sound boring, but behavioral economics is boring to most people and in Lewis’ last book, The Undoing Project, he made the story of behavioral economics so compelling it was like reading a thriller. He does the same thing with The Fifth Risk, and he does it by focusing on the people behind the government: from hackers to former astronauts, from tornado chasers to septuagenarian billionaires lying about their assets (no, it’s not who you think), this is character-driven writing at its best.

Here’s one of my favorite passages from a profile in the book of John MacWilliams, who under Obama had become the first Chief Risk Officer in the history of the Department of Energy. MacWilliams is immensely wealthy and a lifelong conservative, but he champions government investment in R&D:

John MacWilliams had enjoyed success in the free market that the employees of the Heritage Foundation might only fantasize about, but he had a far less Panglossian view of its inner workings. “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. Other countries are outspending us in R&D, and we are going to pay a price.” (64)

This is an important corrective to the narrative — largely promulgated by Silicon Valley — that innovation led by VCs and startup entrepreneurs will save the world from its problems. What Lewis’ book points out time and again is that most of the startups we celebrate were built on top of technology platforms (the internet, GPS, weather satellites, self-driving cars) that were first created or encouraged by the U.S. Federal Government.

Anybody who is reading this list or has read the previous lists knows that I read a lot of books about the 2016 and its aftermath. I characterize most of those books as guilty pleasures, and I sometimes worry that by reading them I’m contributing to the problem of giving the president the attention he so craves. The Fifth Risk may be the most important of these books, because it explores in alarming detail the long-term impacts of the Trump administration’s failure to engage with the work of running the government and its politicizing of the decisions that it does make.


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