Real life isn’t stranger than fiction, but when told by Michael Lewis, it’s more exciting. Lewis is arguably the best in the world at finding underdogs and eccentrics, and turning their triumphs into clever entertainment. Billy Beane, data-driven baseball coach, in silver ballwacky contrarian investors The big court – Lewis made them superstars, and their stories made him even richer than his brief stint as a bond trader at Salomon Brothers. Most of his 18 books are bestsellers.
But are people really listening? When I meet Lewis in London’s Covent Garden for breakfast, he eats scrambled eggs – and some doubts. His most recent book, the premonition, released last year, unchecked what was seriously wrong with the United States’ response to the coronavirus. It wasn’t Donald Trump (it was just a “comorbidity”). It was the dysfunctional federal agency, the Centers for Disease Control and Prevention (CDC), that demanded a monopoly on testing and then couldn’t produce a working test. It was also a failure to learn from history, namely the 1918 flu epidemic, which showed that places that embraced social distancing fared better. Today, these nettles remain firmly elusive.
“I’m really surprised,” says Lewis, who is brilliant even when he’s desperate. “You look at the map of death rates across the United States, there are such dramatic differences from place to place. . . Why isn’t the mayor of Miami or the governor of Florida asked about this? They are not punished at all. It’s like people think it’s in the hands of the gods.
The Biden administration, meanwhile, appears to have “no interest in reforming the CDC”; Congress increased its funding by billions of dollars, “which is not what my book suggests you should do.” Lewis suggested the takeaways were that the United States should have fewer political appointees and more civil servants, so there would be more experience and less “pleasures”. “No one seems to have taken this seriously.” In fact, he says, Energy Secretary Jennifer Granholm “read the premonition and [Lewis’s previous book] The fifth riskand wanted a key role in cybersecurity to become apolitical. But the senate disagreed, deciding that would make the role irrelevant.
So as the pandemic subsides, Lewis fears the experience will be wasted. “There is no learning. And there is certainly no social consensus. . . If we want to lead the life we lead, we just have to become much more sophisticated about how we manage risk. He wants more monitoring of illnesses, better communication of statistics. He thinks we should err on the side of caution when pathogens emerge: The United States should have locked down schools while studying swine flu in 2009. In other cases, the correct answer may be “shut down.” gay bars,” he says, nodding at monkeypox, which has spread largely among gay and bisexual men. “Give yourself a few weeks to figure out what it is, or if it is something.” The “false alarms” were worth the cost.
Lewis now lives in Berkeley, but was born in hurricane-hit New Orleans. “When I was growing up, nobody was doing anything. Really. They boarded up their homes. Now hurricane season in New Orleans is a much more sophisticated risk management business. They evacuate the city more often, but in response to much better data. This seems like progress.
Making political arguments isn’t really Lewis’ game. Yes, The fifth risk (2018) took aim at the Trump administration for being so hostile to the federal government that it didn’t even bother to find out what it was doing. But he insists that he is not an expert and that he prides himself “on not forcing the reader”. Above all, he wants his characters to be heard, from the Big Swinging Dicks of his first book Liar’s Poker From.
Why do the characters open up to him? “First, it’s time.” Lewis spent “hundreds of hours” with Charity Dean, a California health official who is the heroine of the premonition. Second, Lewis’s books are a two-way street. “I can usually figure out how to make myself useful for [sources]”. In silver ball, Lewis ran into Billy Beane, manager of the Oakland A baseball team, who discovered that some players were systematically undervalued. In return, “I was able to give him a lot of information from the locker room because the players were talking to me and they weren’t talking to him.”
Whether the premonition has not yet driven the change, silver ball certainly did. High performance sport is steeped in data analysts. Did it improve the sport? “It’s been really bad for baseball.” The smart way to play baseball is to “minimize movement” so that “it becomes a slower, more labored game.” But in basketball and [American] football, he says, “the smart way to play it is much more fluid and active. The three-point shot wasn’t fully appreciated until 20 years after the three-point line existed, and it was appreciated by analysts.
Lewis’ criticism is that he is biased towards his characters. Do the bad guys even have the right to answer? “Oh yeah. I just don’t show the work. He says he’s checking what he said: he’s spent so much time with other baseball teams ‘that Billy Beane didn’t even know I was writing a book about the Oakland A’s.
But what if the story is wrong and Lewis is such a good storyteller that readers swallow him anyway? In Flash Boys (2014), he targeted high-frequency trading to rig the market, although this arguably reduced costs for many investors. Did he choose the wrong target? “It depends on what you think my target was. I thought the exchanges were the target. Exchanges make money by selling privileged access to traders. “Stock exchanges should not be so profitable. I’m not even sure they should be for-profit corporations; they should be mutual enterprises.
As for the traders, they are a mixture: smart traders who take risks and “dumb and fast traders who add nothing [and] just take advantage of latency issues,” he says. “It bothers me that they become billionaires and people think they are making a great contribution to society. But they are not the problem. The problem is the system.”
If so, why did regulators look into high-frequency trading and decide not to act? “That’s wrong. Because I talked to the people who ran the SEC [Securities and Exchange Commission]. They come in saying we’ll fix it, it’s outrageous. But fixing it is incredibly difficult due to system rooting. . . I had people who were very high up at the SEC looking for my autograph because Flash Boys inspired them. (Some high-frequency traders “liked” the book, he says.)
On the spot
Chances of another Trump presidency? 18.3%
Will Biden run again? Will he be alive? If he’s alive, I guess he’ll show up again.
What do you say to young people who want to get into finance? There are good ways to do it and there are bad ways to do it. Pay attention to how you are doing it, rather than whether you are doing it.
Uber or on foot? Walking.
Twitter or Instagram? Twitter, as a news feed.
The metaverse in a nutshell? Shallow and false.
Lewis cites a “multi-million dollar” lobbying campaign against Flash Boys. “I have emails between supposedly independent financial experts – the kind of people who show up on CNBC and heads of high-frequency trading companies – where this person says that for $50,000 a month, I will discredit Flash Boys. So this is my next book. I don’t let that pass.
Poor regulation helps explain politics, he argues. “What really works for Trump is that the system is rigged. He’s wrong about how rude he is about it, and he doesn’t want to fix anything, and he’s friends with everyone who receives money. But it is not wrong that there is an incredible injustice.
Liar’s Poker, his crazy tale of learning to sell bonds shaped our image on Wall Street. Did flashboys, by alleging the system is rigged, does it contribute to the meme stocks craze? “I don’t think anyone needed me.” It was, he said, fueled by the response to the financial crisis. He said he finds the meme stocks craze funny. “I really don’t see why I should be too upset about this. I don’t think the SEC should get involved. But I hope none of my friends buy GameStop.
Should the SEC also leave out Elon Musk, who misreported his stake on Twitter during the company’s takeover? “If he is actually violating security law, which he appears to be doing, no . . value of the law. Sounds crazy.
Lewis studied art history at Princeton. Can he see any value in NFTs, which some consider fine art? “I don’t trust myself on this. I can see myself saying something stupid that five years later I regret. But the answer is no.
His eldest wants him to write about climate change, but Lewis is looking for the right character: “Someone who has already made billions of dollars, operating largely in secret, making bets that have paid off because of this disaster. . . I did a casting search and I don’t think that person exists. Does this frustrate him? “That I can’t write about the most important thing that’s going on? Not too. A little.”
He is now 61 years old. Doesn’t he worry that his best days are behind him? “No, no, I think they’re way ahead of me, actually. I think I’m better. In this confidence, I see the 25-year-old quack bond salesman that Lewis once was. Yet I leave breakfast feeling that if I were a renegade investor cynically making billions from climate catastrophe, I would tell him everything.
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