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Episode Transcript

My guest today, Michael Lewis, is without a doubt one of the great storytellers of our time. His books are bestsellers, but some are even bigger than that. Moneyball, The Blind Side, The Big Short they’ve all become cultural phenomena turned into blockbuster films.

LEWIS: You find the people who know what’s going on and however frustrating it is, the world doesn’t see what they see. They give you a kind of tour of what’s wrong with the system.

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Welcome to People I (Mostly) Admire, with Steve Levitt.

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I read Liar’s Poker, Michael Lewis’s first book, just after I graduated college. It’s about the Wall Street firm Salomon Brothers told from the perspective of a young Michael Lewis, who worked as a bond salesman during the firm’s heyday in the 1980s when it was the most profitable firm in the finance industry. I was doing a job I hated, management consulting, and when I read Liar’s Poker my overriding reaction was that I would give anything to be at Salomon Brothers. With 30 years of hindsight wow am I glad that wish didn’t come true.

LEVITT: I recently went back and I re-read your book, Liar’s Poker, and 30 years must have passed since I first read it. And I have to say it’s aged amazingly well. I think I enjoyed it even more the second time around. Have you looked back at Liar’s Poker lately?

LEWIS: About six months ago, the audio rights reverted to me, and I had not read it since I wrote it. I mean, I read little bits and pieces of when I was on book tour back in 1990, but we reacquired the audio rights. So, I read it aloud — and I had the pleasure of a team of producers watching me react to my younger self. And my reaction was different than yours.

LEVITT: What was your reaction?

LEWIS: My reaction was: it doesn’t hold up as well as one would have hoped. The material was really good, I mean, I was just in the middle of magical material, but I just had far less taste for my own (SL^ laughs) company or the company of my younger self, than I imagined I was going to have. I winced like every other page. It wasn’t usually the prose — it was actually my character. I sat down to write a book when I was 27 years old. And I’d never done anything like that. And it shows. It shows in the course of the book. You can see this person getting better at what he’s doing, but not without ever getting to the point where you would call him like an accomplished writer. The only thing that saved it was, there’s a charm to the situation. I was a very naive person dropped into this very strange culture that happens to be an important place in an important time in American history. And I documented it as best I could. That’s what saved it. It was like, “Oh, that stuff is there,” but, oh, I didn’t really know what I was doing.

LEVITT: As I went back and re-read that book, there were two things that jumped out at me and the first is how tiny the finance industry was back then. At one point of the book you write, “Salomon’s $3 billion in capital made it the most powerful force in the financial markets,” but $3 billion today would be nothing. The profits, which were a lot — $760 million in their peak. But even adjusting for inflation, that’s one-tenth of what Goldman Sachs is making today.

LEWIS: You’re right. It’s like a small hedge fund. Or a medium-sized hedge fund. It seemed huge that Salomon Brothers had 8,000 employees because it had grown from a few hundred not that many years before, but what is Goldman, 40,000? 30,000?  There was a false premise to the book. I thought, I was walking out of something that was about to go, “Poof.” Salomon Brothers was teetering. There’d just been that big stock market crash. You feel like the end was near and it felt as if this was an unsustainable thing. And I took myself as evidence of the unsustainability that if anybody was paying me that kind of money to dole out financial advice, it was a sure sign that there were just serious problems. And so, the premise of the thing was like, “This can’t get any bigger or more absurd. The sums can’t get any bigger.” And when you look back on it, it is all so charmingly quaint and small, what the people are paying themselves. Goldman Sachs just the other day released a glimpse of what its pay is going to be this year. And there are, like, traders being paid $30 million. Instead of everything going away, instead of it being this Brigadoon-ish moment that popped up and then went away, it was at the beginning of something that was just going to accelerate.

LEVITT: So, the other thing that shocked me rereading Liar’s Poker is exactly what you just said. So, the people at Salomon Brothers, they knew capital markets inside and out. They understood them and they derived profits from that understanding. And yet, somehow, they seemed completely ignorant of how labor markets function. So, you brought them many, many millions of dollars in profits in your second year there, and they paid you, I think, $80,000, $90,000. And they didn’t seem to understand why you were upset that you only got to keep a few percent of the value generated when there was Goldman and there was Michael Milken’s group, Drexel, and there were all these other firms competing for labor. And essentially everybody just decided to leave because they weren’t paying, but somehow that was confusing to them?

LEWIS: There was a reason it was confusing to them because the labor market had really just become a labor market. If you go back, a decade before I got there, these firms were all partnerships. And in the partnership, there was a lot of incentive to stick around and be long-term greedy, rather than short-term greedy. You acquired a piece of the business and the short-term compensation was not that great. What was happening while I was there is that these firms started to grow. They became corporations. It was easier for people to leave and move from place to place, but Salomon Brothers continued to behave as if people had some sort of necessary attachment to the firm and assume the employees would behave as they would in a partnership. And it was actually offensive to the senior leadership of Salomon Brothers, when the traders who made a lot of money started to leave for Merrill Lynch and Goldman Sachs. They thought it was a betrayal. That too’s quaint, right? The idea that anybody would feel any kind of loyalty or emotional attachment to his firm on Wall Street that superseded the dollars he was being paid — that’s died.

I would love to ask you a question. You’re the economist, if someone had told you “All right, here’s Wall Street in the 1980s, they’re making these outrageous sums of money, but this technology is coming along that essentially eliminates the need for a lot of intermediation. You don’t really need the middleman in the same way.” How would you have explained the explosion in financial rents that followed? you would’ve thought the opposite would have happened. these jobs, like the bond salesman job — it’s become almost irrelevant. There are hardly any of them left. Wall Street itself, the financial industry seems to be able to capture greater and greater rents. The pay is going up and up and up. How do you explain that?

LEVITT: Well, I’m not surprised when you have huge markets that people who are savvy and who have informational advantages and who have speed advantages will take advantage of others. And also, I think when you’ve got some people who are afraid of risk and some people don’t mind risk, then the people who are willing to take risks will get paid. In terms of being intermediated, though, what’s funny to me is that the mergers and acquisition business has boomed, where investment banks still are able to charge enormous fees to clients to bring them public. And now there’s been pushback against that, but to me, that’s maybe the most surprising element of how Wall Street has thrived because they charge really big fees. And anyone you talk to says that all the investment banks are really clones of one another. And so, if that’s true, why don’t the fees get bid down to zero?

LEWIS: Here are a couple of thoughts. One is the sums that the banks take out are trivial in relation to the deals they’re doing. They aren’t thought of in absolute terms. People aren’t just really paying attention to the money in the way you might think they would, that if a firm gets paid $50 million to do an M and A deal — it’s a $50 billion deal — nobody really thinks much about it. But also, the people who are making the decisions about what you pay investment bankers, or if you even use an investment banker, are themselves, often, extremely highly paid C.E.O.s, who have bought into the idea that people are worth this kind of money. I watched Wall Street influence corporate pay. If my guy at Morgan Stanley is making $5 million a year, I certainly should be making $5 million a year running a company.

LEVITT: Let’s go back to Liar’s Poker, because another thing that struck me looking back was just how awfully the people in the book behave. They abuse their subordinates. They rip off the clients. They steal credit for ideas. They couch it in terms of, “Well, markets are free-for-alls,” but of course, that’s only true when behavior’s anonymous. I had Robert Axelrod as a guest on the show, and he studied the repeater’s prisoner’s dilemma, and he’s shown how incredibly powerful cooperation, being nice can be in that setting. I wonder, do you feel like that kind of inherent meanness helped Salomon Brothers?

LEWIS: It wasn’t true that everyone behaved badly. It was true that the firm didn’t much care whether you behaved badly. It was also true that the structure of life there wasn’t like a repeated prisoner’s dilemma. It was more like a one-off prisoner’s dilemma. If you burned some bridges, you could move from Salomon Brothers to Merrill Lynch. You could move within Salomon Brothers. So, there wasn’t huge incentive to behave well, and very often, the customer never knew that you behaved badly. There wasn’t the transparency that enabled the customer to see that you had essentially ripped them off. But there was also a whole other strain of bad behavior that had nothing to do, really, with profits and losses that it was just normal to bring a stripper onto the trading floor and have her take off all her clothes on top of the desk. It was just normal to, like, slap women on the rear ends as they passed your desk. That kind of stuff — that was woven into the fabric of the place. And it didn’t really much occur to anybody that that was bad behavior.

LEVITT: I perhaps misread the book as having a subtext, which is Michael Lewis was a nice guy who considered the interest of his customers. And even though sometimes you missed out on chances to make a quick buck, your success there was, in part, due to the fact that you were more or less doing the right thing. Am I misreading that?

LEWIS: Ha. You’re misreading that. You were misreading that for a couple of reasons. One is, I did do a lot of damage to clients by selling stuff that I kind of knew I shouldn’t sell, but the firm really leaned on me to sell it. And it was really uncomfortable for me. I didn’t get used to that. My success is a whole ‘nother subject. And that was what was great — the reason I was a success — because I was. I got paid a lot of money. I was paid more than anybody in my training class my two years I was there, and I was told that I was, like, destined for great things. What happened was, I got assigned to a kind of odd sales job in the London office when I came out of the training program and my job was to talk to the early versions of hedge funds — very sophisticated people who were dealing in a lot of different markets. I’d been quickly brought up to speed on what were the new financial instruments of the day: options and futures, soon to be called derivatives. And I was the house derivatives expert. My job was explain this stuff and look for sort of opportunities to make wagers in the derivatives markets on behalf of my clients and persuade them to do it and charge them for it. But I knew I didn’t really know anything.

And I got there and I was given a list of people to call. And on the list was a man who was an absolute legend in the financial markets, and I didn’t know it. His name was Nils Taube, and he was a buddy of George Soros’s who ran Jacob Rothschild’s money. And I called him up and I said, “I’m Michael Lewis from Salomon Brothers” — just cold call. And he said, “Oh, you’re the new guy, just arrived.” “What do you got for me?” And I said, “The truth is, I don’t really know anything. I just landed here, but I’m happy to be eyes and ears for you on my trading floor on the markets. And he said, “Let’s go to breakfast.” So, we went to breakfast and he said, “I’m so used to people calling and selling me things and you didn’t try to sell me anything.” And he says, “You’re not going to tell me anything I don’t know.” He was 55, 60 years old. He had an incredible career as a speculator and an investor. He was a genius. He says, “If you just do when I tell you to do, I would love to do business with you.” And in short-order, I became basically the conduit to most of his transactions in the financial market. He would just tell me what to do. And some of them quite sophisticated, like arbitraging in the oil markets or seeing an inefficiency in the Japanese bond future and putting a billion dollars on that. He was ahead of our own traders, but it looked to the firm like I, Michael Lewis, was dreaming up this stuff for this guy to do. And he was, six months into it, the second largest client that Salomon Brothers had in the world. Now, he was also a completely quixotic person, unusual person, and he would refuse to meet with anybody at Salomon Brothers, not me. So, he orchestrated — for his own amusement — my success.

LEVITT: That’s awesome.

LEWIS: That’s what happened.

LEVITT: That’s a great story.

LEWIS: And so, of course, once you become, like, a success, and everyone’s talking about you every day, it breeds success. All of a sudden, the woman who covered Stavros Niarchos, the Greek shipping tycoon, said, “Stavros wants to talk to you because you’re clearly like the guy of Jacob Rothschild.” And all I would do was parrot what this guy was telling me, and it made me look like a genius. Now, eventually I learned stuff, but it was really kind of fraudulent. People misperceived how suited I was to the job. All I had done was not offend this guy, after a long line of people tried to show him how smart they were. And that led to this very odd two and a half years on a trading floor.

LEVITT: So, that puts a whole other light on what I wanted to talk to you about: quitting, because nobody at the top ever quits, certainly not investment banking. It’s like you were the N.B.A. rookie of the year and you decided to retire. One of the themes or a recurring theme on this podcast has been the celebration of quitting. My deep belief that people don’t quit nearly enough. What made you think that quitting was the right thing to do?

LEWIS: I knew this was not sustainable. It just wasn’t fun to go to work. The big thing was that when I joined the firm, I knew I wanted to be a writer. I had this belief that people who want to be writers, shouldn’t just be writers. They should go have experiences in the world, so they know about things other than writing and have something to write about. I got this job. It landed in my lap. I thought: I’m going to go learn about this. And I didn’t exactly know I was going to write about this, but I had a hunch. While I was at Salomon Brothers, at night, I would go home and I would write stuff and it started to get published. I published an op-ed in the Wall Street Journal. And it said, “Michael Lewis is an associate of Salomon Brothers in London.” And it was an argument that investment bankers were overpaid. And I didn’t ask anybody’s permission. I just did it. And the next day I came into work and the guy who ran all of Salomon Brothers International was waiting at my desk and he was ashen-faced. And he said, “You have no idea what you’ve just done.” And I said, “What do you mean?” I said, “Wasn’t the article great?” I was, like, pleased that I had this article in the Wall Street Journal. He said, “It’s all over the United States. It’s being reprinted in local papers. We had a board of directors meeting in the middle of the night to discuss what to do about it. And I’m here to tell you that we can’t do this.”

He wasn’t there to fire me because I had Jacob Rothschild and they couldn’t fire me because They didn’t want to lose a customer. But he said, “Could you just stop writing?” And I said, “Nope, not going to do that. Not going to stop writing. It’s what I want to do.” And he said, “Could you do it more discreetly? Could you do it under a different name?” And I said, “That’s no problem. I’ll do that.” And it popped into my head that I should use my mother’s maiden name. My mother’s maiden name is Diana Bleeker Monroe. And I said, “I’ll write it under Diana Bleeker.” He said, “That’s great.” No one around here will ever guess a woman’s a man.” So, I started to publish articles under the name Diana Bleeker, and one of them was in The New Republic and I was taking apart the whole leveraged buyout craze, like why investment bankers were paid what they were paid, why Avis had gone private and public 16 different times. And it was by Diana Bleeker, but Michael Kinsley, who then edited The New Republic insisted, to my chagrin, on putting at the bottom: “Diana Bleeker is a pseudonym.”

Now no one at Salomon Brothers knew what a pseudonym was, so I was safe there, but word got out. And I came home one night after work thinking I was going to write, and my phone in my London house was ringing, and I pick it up, and it was a man named Ned Chase. And he was this big-time editor at Simon and Schuster. And he said, “You’re Diana Bleeker. I found out. We’d love to publish a book by you.” And that was fall of 1987, right before the crash. And I thought, “Wow. If someone would publish a book by me, I’d much rather do that than be a Wall Street person.” So, at that moment, I started to lay plans to leave Salomon Brothers, and the plans were mainly: don’t get fired before my bonus hits my bank account in January of 1988, then I’m going to go out and write the book. So, over Christmas, I came back to the United States. I toured U.S. publishing houses. I didn’t end up doing it with Simon and Schuster. I did it with W.W. Norton, who’s my publisher to this day, with my editor, who is my editor to this day, Star Lawrence.

But after the bonus hit the bank account. And I went in and told them I was leaving. The senior management of the firm brought me into a meeting to ask me why on earth I was quitting, and I said, “I’m going to go write a book about Wall Street,” to which you might think they would say, “No, you’re not. You signed nondisclosure agreements.” Thought maybe that they would have panicked. They didn’t care about that at all. It was like, “Nobody’s going to read your book.” They were actually, very sweetly, concerned with my mental health. They that I was making such a mistake with my life. This is bragging, but it’s true. One of them said, “We think you might run the firm one day,” and I almost burst out laughing. I said, “I’m such a fraud. You have no idea how not good at this I am. I’m not going to run the firm one day.” I said, “I’m sorry, I just got this thing that I love to do, and I’m going to go do it.” They were like, “Bless you. You’re crazy. And we’re really sorry you’re leaving behind millions of dollars, but we can’t stop you.” And then I go on my merry way with my $40,000 book contract and write Liar’s Poker.

LEVITT: So, that is a great story. I’m disappointed, though, because I wanted it to be much harder because for most people, making changes is hard. Your change was easy. You just made an incredible case for why you should change but I wanted another piece of evidence I could put in front of people that even when change is really hard, it turns out well in the end.

LEWIS: Well, let me argue with you there for a minute. I was 27, right? And change when you’re 27 is different from change when you’re 47. I had no obligations. I knew I could feed myself. I didn’t have any student debt or anything like that. So, I was in a privileged position to make such a move and I was infected by the idea that I wanted my life to be great. And working on Wall Street, my life was not going to be great. I was embarrassed by how I was going through the day. When you have that perspective and you’re at that age, it really isn’t that hard to do crazy things.

LEVITT: Another guy I had on the show is Sendhil Mullainathan. He said, “The thing is, before you go to investment banking, you say to yourself, ‘Oh, I’ll never turn into one of them. I’m Michael Lewis. I’m an art history major.’” But the thing is, once you go into an environment, everybody tends to turn into the kind of people who are in that environment.” It’s interesting that you didn’t. Are you someone who just doesn’t care that much about money?

LEWIS: No. I like money but I’m not weird about it one way or the other. I’m not neurotic about money. What did happen, though — you put your finger on it. I really liked a lot of the people I worked with. I’m friends with them to this day. But I looked at the people who were 10 years older than me in the firm, and I would ask myself, “What’s the likelihood that person, if they had a great book inside them, would have the energy to leave this place — the ability to leave this place — and write that great book?” They were so trapped by their circumstances at that point. They had children, they had bills to pay. They’d gotten so used to making millions of dollars a year they couldn’t imagine not making millions of dollars a year. It terrified me. So, that was working in my favor. I’m all for people forcing change in their lives, but I do think that if your central nervous system is telling you don’t change, maybe you should listen to it.

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You’re listening to People I (Mostly) Admire with Steve Levitt and his conversation with Michael Lewis. After this short break, they’ll return to talk about Michael’s book, The Premonition, about the Covid-19 pandemic.

LEVEY: Hey Levitt.

LEVITT: Hey Morgan.

LEVEY: So, we haven’t recorded a listener Q and A in a number of months. And I first want to say congratulations on the birth of your new son.

LEVITT: Thank you. I have a new son named Lucas and he and everyone else — we’re all doing great.

LEVEY: Are you getting much rest these days?

LEVITT: Not so much. He’s not the best sleeper and there’s been a lot of regression in my toddlers too. So, it’s a mess, but a predictable mess at home.

LEVEY: So, we have a listener named Jen who wrote in, and you have been a fairly loud critic of the academic curriculum that gets taught in schools these days. And Jen wants to know if you ever considered homeschooling your kids.

LEVITT: For about two seconds until I really thought through the implications.  Homeschooling is just so time-intensive and, of all the things I’m short on, time is by far the one that I have the least to give. I never really seriously thought about it, but on top of that, I’m not even sure I would be very good at homeschooling. It takes patience and creativity and a particular kind of relationship with your child that I’m not really sure I ever developed. The closest I ever came to home schooling was when my high school kids were struggling with math, and I became a math tutor to them, and every single session ended in tears.

LEVEY: That is exactly what happened with me and my own father when he tried to teach me calculus.

LEVITT: And the other thing I will say is, some of my kids have been a little bit weird and the socialization aspects of school has been so powerful. It is crazy how badly behaved my kids are at home. And then I go to the parent-teachers conference and either the teachers are lying to me, or the kids are completely different kids at school. And that is a huge benefit of school, just teaching kids how to be normal. As weird as I am, I really wonder if my kids take after me, what would happen if only they and me sat at home all day long together? It might be a really bad combination.

LEVEY: Do you know if there’s any advantages to homeschooling your kids or disadvantages?

LEVITT: So, I’ve never looked at the data. I suspect it depends very much on the child and very much on the person doing the homeschooling. I certainly can imagine that homeschooling is a better option for many people. So, all that being said about my own reluctance to home school, I do think that there’s a strong case to be made for educating kids in a totally different way than the current system — I stand by that. And I actually have something up my sleeve and it’s not quite ready for prime time yet, but in a few weeks or a month, I hope to drop a huge bomb on this show about something really neat that we’re trying to do to radically alter the way we do education in the U.S.

LEVEY: Ooh, exciting. Is it an idea that came about on the show by chance?

LEVITT: That may be true, Morgan, but you’re going to have to wait like everybody else to hear the secret.

LEVEY: Okay. Great. Well, Jen, hope that answers your question. If you have a question for us, we can be reached at pima@freakonomics.com. That’s P-I-M-A@freakonomics.com. It’s an acronym for a show. Steve and I read every email that’s sent, and we look forward to reading yours.

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I want to move this conversation from the past to the present, because Michael’s most recent book, it’s called The Premonition, it came out last year, and it’s the only book I’ve been able to find on the Covid pandemic that’s worth reading. I’ve had so many questions burning in my head since I read it. And also on a more personal level, Michael and I have both had to suffer through the loss of a child. His daughter Dixie died just last year, and my son Andrew died many years ago. It’s a hard thing to talk about, but I think we should.

LEVITT: So, I’d love to talk about your latest book, which is called The Premonition. It came out last year and it’s essentially the story of how the U.S. botched our response to Covid and about the heroic efforts of a few amazing public servants who knew what had to be done but were powerless against a system that had all the wrong incentives. Would you say that’s a fair characterization of the book?

LEWIS: Yes. There was a question that puzzled me. It’s probably a question that puzzled you: the United States had a bit fewer than five percent of the people on the planet and we had a bit more than 20 percent of the deaths.  And we were meant to be the best equipped to deal with a pandemic. Clearly, we had underperformed. Clearly, we were failing, and the question was why? And I kept coming back to broken systems and these characters who sat in the middle of the system trying to make it work and finding how hard it was to make it work. As a storytelling problem, it reminded me a lot of the financial crisis in The Big Short, that you find the people who know what’s going on and however frustrating it is the world doesn’t see what they see, they give you a kind of tour of what’s wrong with the system. So, that’s what I did. I picked these three characters who took me in different aspects of the system that should have been responding in different ways to a new pathogen and wasn’t.

LEVITT: I want you to talk about the villains in the book, because you have a lot of villains — people and organizations whose actions or failures to act led to hundreds of thousands of unnecessary deaths in the U.S. and for sure, the Centers for Disease Control, the C.D.C., is probably the worst culprit. Could you just talk about a few of the ways that the C.D.C. failed us and also why you think they failed us so badly?

LEWIS: One of my characters says the C.D.C. needs to change its name because it isn’t actually the Centers for Disease Control. It’s more of the Centers for Disease Observation and Reporting, and that’s what it should be called. It observes the problem. It writes academic papers about the problem, but it actually has ceased to be an effective battlefield commander. You saw that in the beginning that either they were paralyzed by the nature of what the institution had become, or they were hamstrung by the White House that didn’t want them to find Covid in the United States, but probably a combination of the two. They just dramatically failed to detect and track the virus in the early days.

LEVITT: It was totally obvious to me in the beginning of the pandemic that that was true. And yet everybody’s mantra was, “Well, the C.D.C. says this, so we’re going to do this.” Even though the C.D.C. was not making sense. The C.D.C. would say, “Do not wear a mask because masks don’t work, and we need all the masks to be kept for the people who are working on the frontline in hospitals.” Well, it can’t both be true that masks don’t work and that we need them all for the people on the front lines of hospitals. But that was the kind of nonsense that was coming out of there. And everybody was going along with it.

LEWIS: Yes. And there were outrageous situations like, people being repatriated from Wuhan — being sent to spend a couple of weeks at Air Force bases in California, and in Omaha, Nebraska. It wasn’t just the American government. The Australians and the Germans and the Italians all did the same thing. Every other country, when they repatriated their citizens, tested them for Covid when they came back into the country, and they tested them and tested them because they could have been infected when they got on the plane, but the test wouldn’t pick it up until a few days later. And there was a doctor, who’s in the book, his name is James Lawler who was in Omaha near the 80-something Americans who were quarantining for two weeks in an Air Force base. He got in touch with the C.D.C., said, “We need to test these people.” And the C.D.C. responded quite violently with him. They said, “You’re absolutely under no circumstances to test those people.” And he was just perplexed. Like, why wouldn’t you test them? Some of those people almost surely have Covid, and we’re going to let them off the Air Force base, and we don’t know how long they might be infectious for. And he got back from the C.D.C. word that if he tested those people, he would be charged with performing medical experiments on prisoners.

LEVITT: Oh, my God.

LEWIS: So, it was that kind of stuff. It was like a willful desire not to see the problem. The C.D.C., in my mind, had a sterling reputation going into this. I thought it was like one of those parts of the government that seems to work pretty well, but it had not faced this kind of challenge in a long time, or ever really. But when you went and spoke to local public health officers, the county public health officer, the city public health officer, the person who had made a career of actually dealing with disease outbreak — now, it wasn’t Covid, it was tuberculosis or H.I.V., or in some cases, Ebola, or whatever it was, they were the actual battlefield commanders in dealing with these little — local outbreaks. And you found that their experience was the C.D.C. often got in the way of their investigations. They were incapable or scared of making decisions without perfect information. And the problem with disease outbreaks, you’re always dealing with imperfect information, uncertainty, the possibility you’re going to be wrong. The institutional fear in the C.D.C. of being wrong was high.

The question to me was: how did this place ever get its reputation? It was the world’s leading health organization. It was emulated by all sorts of other countries. We exported what we knew about public health through that institution and people listened to it for generations. And none of my characters actually had an answer to that. I had to go find the beginning of an answer for myself. I didn’t set out to write a book attacking the C.D.C. I had these characters who were in the middle of the mess, in the middle of the war, and all of them had — even though they were coming at it from very different angles — had these stories that were very alarming about the C.D.C., and all of them kind of sense that this place is not up to this challenge.

LEVITT: So, two of the heroes of your book are these doctors who are working in public health. And for me, they were incredible role models because they weren’t classic experts. They were scrappy. I don’t know if you know, Michael, that I’ve been on a mission to make data science a central part of what we teach in school. Now, they weren’t trained in data science, but instinctively they did what the best data scientists do. They were taking every scrap of data they could find, and they were combining those with sensible models of the world and a basic understanding of incentives to come up with answers that were completely evading the experts. Could you give a couple examples along those lines?

LEWIS: Yeah. In 2005 or 2006, George Bush, is in the White House and he reads The Great Influenza, John Berry’s book about the 1918 Pandemic. And it’s a terrifying book if you’re a president. Bush turns to someone in the White House and says, “What’s our plan if this happens again?” And of course, this is a Bush who’s been traumatized by 9/11 and Katrina. He’s aware that bad things can happen. And he’s told, “We don’t have a plan,” and he’s actually furious and leaps into action, and gets a bunch of money from Congress, to — among other things — create a pandemic plan. And they call around to the agencies that are going to be involved in any pandemic response and ask them to send their most out-of-the-box thinker. I hate that phrase, but that’s the phrase they actually used. And Carter Mecher is sent to the White House. Carter Mecher is by career, by training, an I.C.U. doctor. He worked in the Veterans Administration. And he ends up being assigned this problem, together with another doctor named Richard Hatchet. And the problem is: what do you do between the moment the pathogen starts infecting people and the moment you have a vaccine?

They’re thinking about the flu, but it’s true of anything. What can you do? How does a society defend itself? And what they find is that in the public health community, the idea of social distancing and non-pharmaceutical interventions has been discredited. The takeaway from 1918 was that those things didn’t work — that people closed churches and closed schools and shut down saloons and so on and so forth, and the disease went everywhere and there was no correlation between what people did and what the outcomes were. And the received wisdom was, you wait for the vaccine, which is not a very satisfying answer. So, these two doctors start to study this problem. Mecher starts reading about the history of 1918, and he realizes that no, actually people did things that did work — social distancing and non-pharmaceutical interventions — they just stopped noticing how they worked. And he ends up writing several now-famous academic papers comparing the outcomes in various cities and shows, for example, the death rate in St. Louis was half what it was in Philadelphia. And you can see that this is tied to the fact that St. Louis introduced these social interventions earlier in relation to when the virus arrived in the city than Philadelphia did.

These doctors start to change the mind — not just the U.S. public health establishment, but the global public health establishment — about social distancing, about school closure in particular, with flu, especially, they did a lot of work showing just how powerful that particular intervention was and Mecher himself is, like, going into schools with a tape measure to show just how jammed these places are. That there’s no social space in America that’s as cramped as a big public school. And then Mecher writes the plan as the C.D.C. plan with some help from C.D.C. people. Never puts his name on it. And it becomes the official American pandemic plan, which is then explained to the rest of the world. And if you go to Australia and you ask the public health people like, “How’d you do so well in this pandemic? How have you avoided so much death?” They’d say, “We just use that plan from the C.D.C.” Carter Mecher is at the bottom of it all, together with Richard Hatchet. (SL^ laughs) And then you flash forward and Carter Mecher and Richard Hatchet have so impressed various people in this space that Tom Bossert, who is in the Trump White House in the very beginning. He was Director of Homeland Security, and actually had them badged in the beginning of the administration in case there was a pandemic.

And then when John Bolton comes into the Trump White House, he fires Bossert, and they forget all about Carter Mecher and Richard Hatchet. So, they aren’t there to run the Trump administration’s pandemic response. And instead, Carter Mecher is spending the beginning of the pandemic in his bedroom, writing emails in like January of 2020, basically predicting what’s going to happen based on data analysis he’s doing in China. He calls it “redneck epidemiology.” It’s really rough and messy, but he’s working with the information he has to draw the best conclusion he can that’s actionable and he’s being driven crazy by the fact that the C.D.C. isn’t responding. It takes them months after he has felt he’s got definitive evidence that this thing is dangerous and if you let it loose in this country, it’s going to kill 1,000,000 to 2,000,000 people, and you’ve got to do things, and nobody listens.

LEVITT: So, I love your book, The Premonition, but I have one major criticism and that is: as many villains as you identified, I think there are so many more experts and disciplines who deserve to be pilloried, but you largely let them off the hook. I think medical ethics has completely lost its way because it’s clear in a pandemic where a million people will die, that you might be willing to sacrifice a few people along the way. Is it so obviously unethical to, say, pay volunteers a lot of money to be part of trials to speed up vaccines that will save hundreds of thousands of lives? And it’s incredibly frustrating to me that medical ethicists have carved out such a crazy polarized position that there’s no room for weighing costs and benefits anymore.

LEWIS: I’m with you on this. There’s another medical ethical question that I’m surprised does not get more attention. It amazes me that, for example, a teacher in Marin County can come into class unvaccinated and decline to wear his or her mask, infect students, and remain anonymous. These privacy issues around disease, I think need to be rethought in a pandemic that you need to know who has the virus. I assume that the legal system will test this at some point — someone’s going to sue someone for infecting them. But the whole attitude in the disease space is that if you have the disease, you have the right to privacy about that. And I don’t get that.

LEVITT: Yeah. This is a war. We’re involved in a war with Covid, and it seems like we should take some of the tactics you would use in a war. Your example of privacy would be a great example. The other thing I think we wouldn’t tolerate in a war is the field of epidemiology not delivering the most basic answers to the most basic questions, even a couple years in. Which masks work and don’t work, are children transmitting the disease or not, how long are people infectious? If we were fighting a war against China, we wouldn’t tolerate a military that couldn’t figure out the answers to these questions. And yet in a public health setting, we just go along accepting that we know nothing about how this disease is spread in a very pragmatic fashion.

LEWIS: At a time when we have new weapons to actually find out a lot. Like genomic tracking, you can pretty much show how the disease transmitted in a community. You could have gone into the Rose Garden after the super-spreader event in the Trump administration, and you could have identified probably who introduced it and how it moved around the Rose Garden. Nobody even thought to do that. Who knows, maybe school children haven’t had symptoms so far, but maybe they’re actually almost like a reservoir species, they’re a place where it transmits a lot. Those questions have not been answered, and it is amazing.

LEVITT: Michael, as you know, we’re both members of one of the most awful clubs that ever existed: the club of parents who’ve had a child die. My son, Andrew died nine days after his first birthday. That was more than 20 years ago but the pain is still right there under the surface. Your daughter, Dixie, passed away just last year at the age of 19. So, I’m just so, so sorry you’ve had to experience this. It’s far and away — I mean, not even close — the worst thing that’s ever happened to me. I feel enormous empathy for people who have to walk that path, but are less far along than I am.

LEWIS: Well, thank you. And I’m sorry you had to go through it, and I agree with you. There’s nothing close to the sadness that I’ve experienced. And it’s a peculiar experience in that yes, we’re both members of a club, but the members of this particular club don’t have that much in common with one another, I don’t think, in that each experience is so peculiar to the circumstances. It adds to the pain, the feeling that basically I’m alone with the sadness, that basically there’s no playbook. There’s no answer to my grief. And the nature of the grief is so specific that sitting down with other parents who have lost children doesn’t help. I had to sort through my feelings on my own. The image that was always popping in my mind every day is like, I’ve been given a machete and there’s the jungle, and I’ve got to figure out how to get from one end of the jungle to the other end of the jungle and there was no map. But, up until Dixie was killed in an automobile accident last May, I thought of myself as the luckiest person who ever walked the planet. And now I’ve had to rethink that. It’s just a piece of bad luck and it’s so sad.

And I have to remind myself that the real loss is hers. She was this spectacular person. She was living her life in such an admirable way, and she was full of energy. She was a warrior. And she had a great life ahead of her. It isn’t just my loss. A lot of people lost a lot when she died. Obviously, I’m struggling with it. I don’t know what your coping mechanisms are, but it was so painful that I found in the first couple of weeks, just to get through the day, I started to make a list of things that made me feel better. Going for walks in the woods helps. Being outside in the day, social interaction. And insist on doing them otherwise I just couldn’t get through the day. And I found that since then, I’ve been able to get more absorbed with work and feel more or less myself, but I think there’ll always be this pocket of sadness in my heart and I’m just going to have to learn to live with it.

LEVITT: Yeah. I think that’s true. For me, one of the hardest things was getting over the guilt. Obviously, you have to keep on going with your life. I really struggled with not grieving, if that makes any sense.

LEWIS: Makes total sense.

LEVITT: For months, I thought about nothing other than my son’s death. And as I emerged from it, I had to keep on reminding myself — giving myself permission — that it was okay to go back to work. It was okay to smile and to laugh. You just have to give yourself permission to live even though it’s hard to do.

LEWIS: I agree with that. I would say though, as to the guilt, it’s interesting. A lot of parents who’ve lost children — that was the first thing they said was, “You’re going to be wrestling with a lot of guilt.” And the fact is I’ve had none. I have no remorse about the kind of dad I was. No regrets about the nature of our love. It was a really lovely relationship. There was nothing I could have done to protect her from what happened. We loved her boyfriend who was driving the car in which she was killed. So, the fact that there was not only no guilt, no anger. There was none of these toxic emotions. It was just pure sadness. I think that affects how I’m dealing with it.

LEVITT: There are two stories about Dixie that I’ve heard you tell. I was hoping you could tell them again, just to give listeners a sense of how special she was. One was when she was three years old in a swimming pool at a resort in Bermuda.

LEWIS: Yeah, there are many Dixie stories. Yes. I wrote a book called Home Game. and it was about my experience with parenthood. the book opens by me saying that it took me a while to feel what I was supposed to feel about my children. And the first time I felt anything that I noticed as pride in my child was when Dixie was three and Quinn, her older sister, was six, and it happened in a fancy resort in Bermuda. There was a kids’ swimming pool, baby pool, that was vast. And there was like an isthmus that went out of that into the real pool. And I was swimming laps, coming back and forth and checking on them. And I come back and then, like, four 12-year-old boys are invading the pool and they have pool noodles, and they go attack my girls and they don’t really hit them with the noodles, but they’re hitting the water around them and Quinn starts to cry. And I start to think maybe I should intervene here. And then Dixie — and this was really revealing of her character going forward — she really was like this warrior princess. She stands up in the pool and she screams, “Teasing boys!” Odd thing to scream, but she screams it so loud that everybody around the pool, all these women who are reading mainly Jackie Collins novels look, like, “What’s that?” And Dixie goes, “Teasing boys! You just shut up, you stupid, motherfucking assholes.”

LEVITT: And she’s three years old, right? She’s three years old.

LEWIS: She’s three years old. And I thought, “Oh my God, everybody heard that.” I’m sitting there floating with my eyes above the water, staring in. And right behind me, a woman in one of the lounge chairs screams at one of the boys and says, “Jack, come on over here! Did you teach that little girl those words?” And he goes, “Mom, I didn’t teach those words.” And I knew who taught this little girl that — it wasn’t me, but it happened in a carpool. But Dixie had identified that phrase as something that generated an extreme reaction from grownups. So, the mother lays into the boy, the effect is to make the boy even angrier at my daughters because they’re to blame for him getting in trouble. So, they go right back at them with the noodles and they’re slapping the water and Quinn starts crying again. And Dixie stands up again and screams, “Teasing boys!” And now like the whole resort’s listening. And she says, “You just shut up because I peed in this pool twice, once in the cold pool and once in the hot pool.” They fled. And I remember thinking, “I’m so proud of her.” It was so brave to stand up to these huge boys who were trying to wreak havoc and threaten her older sister. I said, “That’s my daughter.”

LEVITT: That’s awesome. So, the other story that I love is what happened when you and Dixie visited the United Nations many years later.

LEWIS: When Dixie was maybe 14 or 15, I took her on a trip to New York and we visited the U.N. It was a fancy tour. The U.N. Ambassador was a friend and set us up. There are a lot of pictures in the U.N. and this theme emerges, this pattern emerges in the tour — the Rwandan genocide. And there’d be all these, U.N. soldiers in blue helmets distributing aid. It was one thing after another, these horrific things that have happened around the world. And there were pictures of the U.N. soldiers and each time he’d say, “And we came in after and we distributed aid,” and so on. And Dixie finally raised her hand — we’re in this little group — and she says, “How come the U.N. never comes in before?” She says, “Do you ever stop it from happening? Or you just come in after when all the bad stuff’s happened and hand out, like, care packages?” And he didn’t know what to say. And it was true about Dixie, sometimes she could be a little blunt, but that she was an incredibly affective person. She was an athlete. She was college softball player. On the softball field, if the game was on the line, she is who you wanted at the plate. She was just a clutch performer and was always all about what you did. She didn’t get it from me. She got it more from her mother, but I just loved it in her. And the quality of the loss is the quality of the person and the quality of the love, and the quality of the person and the quality of the love was very, very high.

People tend to be afraid to talk about death, both because they worry about reminding the bereaved of their loss and because they don’t know what to say. I know from my own experience, though, that I never stop thinking about the death of my son. So, no one needed to worry about reminding me by bringing up the subject. It was always with me. And when it was out in the open, it was like a breath of fresh air. And on the question of not knowing what to say. I’ve taken to heart something wise that B.J. Miller, a past podcast guest, shared with me. His advice was that as long as you’re authentic, exactly what you say doesn’t matter. I didn’t know what to say to Michael about Dixie, but it felt authentic to ask him to tell stories. And I’m so glad he did. I really wish I could have met her.

If you’re interested in more on Liar’s Poker, check out the new audiobook read by Michael and the accompanying audio series called “Other People’s Money,” available on Michael’s podcast Against the Rules with Michael Lewis. Thanks for listening, and we’ll see you next week.

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People I (Mostly) Admire is part of the Freakonomics Radio Network, which also includes Freakonomics Radio, No Stupid Questions, and Freakonomics M.D. This show is produced by Stitcher and Renbud Radio. Morgan Levey is our producer and Jasmin Klinger is our engineer. We had help on this episode from Alina Kulman. Our staff also includes Alison Craiglow, Greg Rippin, Rebecca Lee Douglas, Zack Lapinski, Mary Diduch, Ryan Kelley, Eleanor Osborne, Emma Tyrrell, Lyric Bowditch, Jacob Clemente, and Stephen Dubner. Theme music composed by Luis Guerra. To listen ad-free, subscribe to Stitcher Premium. We can be reached at pima@freakonomics.com, that’s P-I-M-A@freakonomics.com. Thanks for listening.

LEVITT: It sounds like I have a convert — a convert to the mission.

LEWIS: You had me at, “Hello.”

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