Transcripts For CSPAN2 In Depth Michael Lewis 20171105

As a Public Service by americas Cable Television companies and is brought to you today by your cable or satellite providers. Now on book tv we are live with bestselling author Michael Lewis. Mister lewis has written many books including liars poker, moneyball, the big short and most recently the undoing project, a friendship that changed our minds. Michael lewis, you are the author of more than a dozen bestselling books, what makes a good story in your mind, what do you look for . There is no formula. The question you just asked me, ive never really asked myself exactly. What lead me to want to write a book, you have to have a level of passion about it. Itsfinding usually, what it is , its finding an interesting person in an interesting situation that will allow me to work in an interesting idea. B. I feel like i just had to do this if i dont do it wont get done and it should be done because the story should be dealt with. In terms of like you asked me to go to lack a class of Journalism School students and give them a formula for how to write a good story, i would know how to begin. Host when did you decide you want to become an author . Guest my career path, they should be something in the bottom of the tv screen that says do not try this at your own home. It really didnt come i dont think you can grab the model onto a literary career. I was at art history major in college and so what i first one to do was an art historian. I kind of stumbled out of College Without any particular direction and landed with that and accept on wall street. I got that job on wall street and became the first book liars poker, very excellent that great deal of intention. What happened was while i i was working on my princeton thesis which was effectively a book, may be a 50,000 word book i became engrossed with the writing of it. I had never written for newspapers. I never conceived of myself as of right. I was a reader. I like to read that i didnt have anybody telling me you are a born writer. Just the reverse. When i finished my princeton thesis and i had to did in to my professor and he came back with a great and we had a defensive thesis, i had been vain. In the course of this exchange i said, what did you think of the writing . He said, put it this way, never try to make a living at it. But i tried. When i got out of college i thought i would want to write. I want to write books. I started willynilly submitting things to magazines and it was haphazard process and thing started to get published and one thing led to another. The advice i would give someone, the practical thing that happened to me that was really very useful for my career was doing something other than right. Right. It was hugely useful, given my subsequent career that he spent two and half years at a wall street firm. I had something to write it. It gave me material that you wouldnt get in a normal journalistic life, to be on the inside of Something Like that. That put kind of attached engines to my ambition, to have that as an experience to write about. Host with a lot to talk about but it want to ask you which are currently working on, what are your upcoming projects . Guest at any given time i have come if you were to come to my office you would see a row on a bench of folders of like might want to do this. There are dozens of things there which inquiries states of neglect. The thing thats got me kind of jazzed right now, its going to sound boring, but im writing the federal government. When trump was elected i watched the transition with appalled assassination. There were bits and pieces in the newspaper about how essentially the obama administration, administration are my law required to prepare for the transition. Too many employees, but a political boss level of 4000 who wrote an offer not knowing very much and have to quickly cram and figure out whats going on in these places like the Treasury Department and the department of energy or department of agriculture and sometimes they know a lot about it and sometimes they know nothing. In any case the, from the point of the outgoing administration, preparing for this is to educate the people who come in about how one of these enterprises work. The obama administration, because were so grateful to the Bush Administration for how they are prepared for the transition in 2008 during a time of crisis, obama had directed his government to Pay Attention to this in a big way. They had prepared a cost the government, may be the best course ever created and how the federal government works, an agency to Agency Briefing books and people smart, people waiting to teach. The Trump Administration largely just didnt show up for. In some departments really didnt show up for it. I thought that was a missed opportunity. Its crazy. Even if they disapprove of everything obama stood for you can store an awful lot from outgoing people about how this enterprise works. The truth is the amount of overlap between the two administrations is much greater than the typical noise would have you believe. A lot of what our government has is not ideological. I went to go get the briefing. Calling up career Civil Servants and former obama people and say look at, can you give me the talk with the briefing book that you were going to give whoever was supposed to show from the Trump Administration so i could figure out how it works, because i dont know, and what they might not know. It might kill us. I picked almost arbitrarily i started with the Energy Department because its always been mysterious to me. I wonder what the hell they did in there. Like a lot of departments it is misnamed. Its really a department of nuclear weapons. The neglect of that was very frightening and i wrote about in vanity fair couple of months ago. The second one which i picked as a kind of test case. I said to myself, the Energy Department, everybody wants to read about that because nuclear weapons, it seems alarming that a new administration would come in and be so haphazard about the nuclear stockpile. Lets pick a department of the seam sleepy nothing could go wrong. Topic the department of agriculture. I dont know what goes on there, and spent several months going into news briefings. It was riveting to me the kinds of people who were there, the things they had to say, a range of activities this place did. So i wrote about that. Im going to move around the government and keep doing it. Where exactly late i dont know but as i suggested, your first question, i group, i feel an excitement about the material, i feel excited about this material. Host take your book moneyball, a book about algorithm, it became an interesting story about people and personalities and americas pastime. How do you weve all that together . Guest well, first how does it start . I dont look at and say theres a book here. It starts like with this thing im doing now, very small. With an observation i was sitting there watching my local Baseball Team, the oakland as, when money was starting to happen in baseball. Free agent showers were starting to go through the roof. I looked at it and i thought thats odd. You see all these people, they were not paid the same but they were close to each other. Now we have all that field is getting paid 150 grams and right field is deemed paid 6 million and a water just got ticked off the left fielder was when the right fielder dropped a fly ball. I thought maybe there was class resentment going on so watching them the money on the field for a while, and then realized the story is not that. Or its not only that. Its how much money the team has. The team has, my team is a 14. It has onefourth the payroll of the new york yankees and yet its winning as many games as the new york yankees. How does that happen . In an efficient market the team with the most money would buy the best players and when all the games. How come thats not happening . So it starts with a question. I go see the management to ask them about it. Their answer is a riveting, it takes about a month to figure out that this isnt a magazine piece or little article, that this is a book. Into this stew is tossed the really interesting character billy dean, played by brad pitt in the movie, but who i realize at some point can be the engine for the narrative. It is a question of like how you put it together in a way the reader will keep turning the pages. The bottom of it, that an odd way is the easy part. Once i start writing. Taking out what the story is about and in that case what i i thought the story was about is not baseball. They spot was going to be what were going to be reading about and think were going to be. But underneath it, the fact the market of any people at any labor market could be so inefficient and much less the market for Baseball Players i thought thats incredible. Forget their Baseball Players. These corporate employees who are doing what they do on the job with millions of people watching them do their job. Statistics attach, it wasnt people were telling what youre doing. Statistics attach what youre doing on the field. If those people can be so miss valued that you can build a juggernaut of a Baseball Team out of a miss value, undervalued, who cant . It was not the way markets misdiagnose people. Once i have that energy, like thats an important story, that transcends the immediate subject matter, its just a matter of like a length out that interest me and figure out how to line up. Host when did you get to the point . Was there and aha moment that this is going to be the story . Guest yes. I can always answer that question with every book but in the case of moneyball it was funny. I groped. I was trying to get how this operation renter i started with the front office at of course they were explained to me strategies and players i miss valued, people are using intuition as opposed to better Statistical Analysis which we are doing, and i one point said to the front office, billy beane, what do the players think about . Its kind of odd, your team wn you look at it, they dont look like most teams. You have a leadoff hitter who is slow, you have a first baseman has never played first base, that kind of thing picky set the players, we dont tell if theres anything. All the stuff you been asking about we dont tell them because it confuses them. So dont you go tell them. But i thought this is a start of the conversation with a player. They are in the middle of a science experiment, the lab rats. You can talk to the lab rats. I was thinking at the point thinking i had a long magazine. I, the pain he had not dropped for me. I went to go, i went to go to systematically get to know the players and i really just moved down the clubhouse, the locker. The first time after a game, it was a night game in the Oakland Coliseum and i was waiting for my player to come back from the showers. Looking around and all the players are coming back from the showers so they are all naked. The first ahmed releasing the oakland as naked and it was really an unpleasant site. It was just like the baseball uniform like these suits cover up a lot. Theres a lot of body fat what should nothing. The worm is shaped parts and i have thought, even among those naked bodies of the against the wall and has anybody what you do for living nobody would guess they are professional athletes. Booktv interviewers may be, but not professional athletes. And when i realize just how they didnt look right, really didnt look right, i mentioned this the next day to billy beane secondincommand and he said thats a funny thing to say that because we talk about that picky said when a player looks wrong, is when, what are the reasons a market miss value to we see a player and it looks like a famous baseball, tortuously before or he looks like an idea of an athlete, the market legate he is a quickly because they seem and they said thats a player. But if you short or fat or has to club feet, one of players had to collect feed, they just Say Something is off about them in the market is put off. He said were essentially in the business of finding people who have defects, and the more obviously glaring defect, the better it is in a way because the defect will distract the baseball expert from seeing the real value of what the person is doing on a baseball field. Thats when i thought all my god, how they look and baseball is having an effect on how they are valued . How could that be . Thats when i started thinking this is a story about markets, how screwed they did when they value people. Not just Baseball Players. Women in the workplace, look like when your thought to be less valuable. It applies to a lot of things. Its about the way we stereotype when you look at people and how that affects the right of the people who are being stereotyped and how that becomes self reinforcing perk that had come this is universal subject and that it was really just a question of how i lay it out. But at that point i had a book. Billy beane would say if you had him sitting here, i tricked into writing a book and hes right. Because at that point kind of six weeks into relationship and im saying a little magazine for the New York Times magazine, he was fine with that. When i rolled in after six weeks and said you know, this might be a book, you could see his expression changed. He did not want a book written about him. But it was too late. I spent so much time, i cant quite get out of this now. And so, but thats how it happened. Host 202 7488201, three hours of first sunday of the month indepth and our guest Michael Lewis. Well get to calls in a moment. He mentioned billy beane. This is from 2011. Lets watch. The journey for me started when i stopped playing and worked under sandy and he threw a pamphlet at me by jehovah named eric walker. I read that and that was my eureka moment. Then i sort of went back and found all the builtin stuff i could read, the abstracts and read all those and it just made more sense for me. Once i access to that, once id sort of scene that, there was really no turning back for myself. But as far as the last ten tens i really start to mistake when Michael Lewis walked into her office and were just trying to survive as a business trying to find a way to compete in a very challenging situation. I dont think we ever sort of envisioned that the organization itself would be put out front, Something Like this with sports analytics. Its a bit surreal. Host your reaction . Guest i told you, he didnt, ill tell you think its even funnier because he kind of got tricked into the book get written about them. Not that it was a bad thing. Even when the book was done, to understand what they were doing was different, i could just spend my time with them. I had to go see other baseball organizations. I had a point of comparison even though much of that material, virtually all of my tour would end up on the cutting room floor. The Toronto Blue Jays and the boston red sox, i was down with the texas rangers. I i went up and saw the Seattle Mariners and talk to various people at philly with the organizations and realize yes, the certificate billy beane saw me doing all this picky thought maybe its not just about us. Hes writing about baseball. I tend not to clue in my subjects too much about what im doing. I dont want him to become too selfconscious. He gets the book, and read it, basically, is too late for him to change anything. He calls me and he just is horribly upset. Shouting at me, not shouting at me exact of the kind of shouting at me. And i said, i was thinking, if i felt sneaky about it i thought its not totally in his interest for me to write this book because they are doing things that of people under doing and again in market advantage. If i expose it to the world the other teams will start doing it and he will lose his edge. And i thought that was what he was upset about. So i said what are you upset about . He says, you had me think i can say the word on tv, and expletive, cursing all the time, and i said what . I said you do curse all the time. He said you dont understand, my mother is going to be really upset. My mother is going to read this book and shes going to be upset. I said, your mother . I said, you know, i thought, i was released. I thought if thats all you worried about, i thought you were bored, i said to them, i expose your secret to the other major league Baseball Teams and your stupid and you no longer be able to win baseball games with less money. There was a long pause on the other end of life and he said you really dont think anybody in baseball is going to read your book . He said nobody is going to read your book. So then people do read the book. It kind of goes, the thing goes crazy. His life just blew up. To his credit he could so easily have said Michael Lewis does not know what hes talking about. We gave them a few interviews but he got it all wrong. He could so easily have just throw me under the bus. He fought back on my behalf. So then flash forward, a few months, a movie studio once to buy the book ordered into a movie. To that point, 2443, ive had a lot of movie studios buy things ive written nothing a been made into movies. What did you send us the money for an option and its great, free money. They never make the move. They say they will make it but they never make it. So billy calls and he says youre not condoleezza called me. Some movie studio the ones to buy my life raise because theyre going to make a movie. Hes laughing like this is preposterous. Thats just not going to happen. And i said what you say . He said though, i didnt want a buck. I dont want a movie. I said no, you are thinking about all the wrong way. They just give you money. They never make anything. They just buy all the stuff, give you money and you can just take them and put it in a drawer and it will never make it. I listed all the things from liars poker on, does a magazine pieces that they bought and the amounts they pay for the sphinx and is listening and goes wow, thats good deal. If i just signed they would give me the money . So he signed it and sends it back in. And every 18 months for six years you would get another check. He called me and said this is fantastic. They just send you money and they never make the movie. Then one day he calls me and he says, you bastard. He said, brad pitt just called. Hes on the way to my house, and my wife is putting on makeup and the babysitter babysitters wea. He said you said this wasnt going to happen. I was as shocked as anybody. Whos going to make a movie of baseball statistics . This thing, in the relationship i have with my subjects like billy beane, i really am the chicken at the ham and eggs breakfast and hes the pig. The subject is im interested, they are committed, and i could cut i move on with my life but a book and a movie exploding in a persons life the way that it did with billy beane, its amazing the grace with which is handled it because it is not all pleasant. Even if it is pleasant in being stroked which way, this way, its odd and distorting. Hes handled it very, very well. Host another book that became a movie blindside. Its a true your wife said you would be an idiot if he didnt write the book . Guest yes. I mean, so that, you know, you may have already gathered in order to write a story i needed to thomas of a straight about what im writing a story. That i have an obligation to it. Im the only one who can tell the story because i have some privileged position in the relationship. And the blind side, it helps if it connects up to things you done before. You never want to do the same thing but if at least write something than before, i can see why i would be going to write a book like that. It wasnt totally preposterous arbeit i might even though it was not baseball if its about how markets work. Liars poker was about the new new thing was about markets. The blind side, the accident involved with their, says with her as i can to these stories at this length, but you shut me up if uncle gone too long. Host we can go longer. Guest but its been a long time since anyone has listen to at this length. But anyway, host we have two hours and 45 minutes so continue. [laughing] guest so i decided i wanted wanted to write a piece, a quick thought of exercise about the teacher who most influenced me in my life who happen to have been my High School Baseball coach, a great man named Billy Fitzgerald. And i wanted to persuade the New York Times magazine to put Billy Fitzgerald on its cover, and just get at how someone gets into the head of the kid. So powerfully in with such permanence that the things he said to me then i hear now when i come especially when im in trouble, when im in a pinch and i need strength. Host that led to the book coach . Guest thats right. I was thinking about that as the story, and i thought i should just go with my experience. I ought i have to go see other , how of the people as adults who play for Billy Fitzgerald feel about it. And i was in memphis anyway and i thought john to relate to. I had not seen since high school. Weve been in the same class from kindergarten through 12th grade when both that i said the only award academic words you and i got, the only wards we got with the ward they gave you for being there for 13 years. So i call him and he fixed me up at the airport and its company. The first base as what i can and carty says, he goes so who writes your book . I said i write my books. You dont write books. I know your name is on them and you have to promote them but who actually likes them . And i said no, i sit down and write my books. And he goes you are a dumb ass like me in the back of english class. Theres no way you write books. It took me forever to persuade them that i was actually the pain in the and not just a front man for bookselling operation. So he takes me to his house and he was a poor boy growing up and is made a huge success of himself and this measure on the outskirts of memphis tennessee and introduces me to his family. And his living room is a a sixfoot fiveinch, 350pound black kid who basically isnt introduced to me or explained in any way. On the way back to the airport i said, so whos the kid . He said, leanne, thats michael oher, he came to our school. Leanne sahn in shorts and a tshirt going home from the bus stop in the snow. And pulled over and basically one thing led to another she realized he was basically homeless. He was not functioning in school. Anyway, she took him in and we are now back in touch and i started this thread was going on in their house took and its clearly my fair lady, except with a modern twist. They are, shawn and his wife, rich, white, evangelical christian republican. And theyre trying to turn michael oher into one, too. And i watch with some success all of a sudden he starts to become under her regime, he starts to succeed in school. He starts to kind of like come out of his shell a bit. Sean had been a really gifted athlete. He was drafted by the new jersey nets, maybe the new york mets at the time, to play in the ba. I think he might have been drafted by the cincinnati reds. He was that good of an athlete. Maybe he could to play professional baseball. And sean is a fixer come like he knows how to fix things. He looked at michael and he said i can train him up. Michael types of as a basketball player. He shape is not a basketball player she. Shots that i can train them up that some Junior College wanted. Some Junior College coach the one you and i will be as ticketed college. The cultural getting into school. So pause for a second. Because of moneyball, sports franchises get in touch with me and want to talk about analytics and how you intellectualize their sport. I became friends with a guy and a front office at the San Francisco 49ers football team. He and i started talking about what are the interesting questions about money and the sport . He said the interesting question is its not how much money a because ability basically has the same payroll, its more how the money is distributed across the field. And i said do you have any data on whats happened to that since free agency back when the time and everybody got paid whatever they get paid by the organization, but a free agent market occurred, what does a market say. A product this date date and it was riveting because what we all would expect the quarterback is highestpaid player on a few but used to be in the olden days like a running back, a more highprofile player was the secondhighest paid. What it happened because of free agency is this guy called and left tackle the cards the quarterbacks blind side became the second highest paid player in the nfl. No one knew the names but they were thought to be a very peculiar fiscal tie. They are basically elephants are ballerinas. It was huge, had especially big hands because they could grab the defenders come in, especially long arms. They were incredibly agile and quick. I had that, i was learning about that. One day sean tuohy calls me up and he said we inevitably what happened. Nick sabin was, as now the coach of the alabama crimson taken he was in the coach of the lsu tigers and was kind of an acquaintance of shock, came through the school and at seen michael oher on a Basketball Court and said to sean, thats a future nfl left tackle without evincing him on a football field. At that time michael oher, they had him on the bench because when use software because they thought he was a defensively and he didnt want anybody and it seems like disoriented on the field. Well, at this point i started to turn to my wife and say, she had heard, my wife, tabitha had heard some of the stricter much of the story is quite moving. Leigh anne shows michael oher his bed and he stares at it and says, ive never had a bed. In my life. This is a new thing for me. Host thats in the movie . Guest these sorts of things were happening. But i thought thats not my kind of story. Sean came out to visit because he was a color, did of the Memphis Grizzlies of the time just for fun, and theyre playing the golden state warriors. He was staying with the spirit we went to dinner. He started telling tabitha the stories turkey was in tears. And i said, there is a a book u but its in my book. Its about some of the kind of person would write. We got in the car and she said youre an idiot if you dont make this the next book, the inherent drama in the story will carry it. And i realized at some point that there was a way of organizing it, that i could harmonize with my own writing half. And it was that the, if you ask the questions, how does michael oher go from being a homeless illiterate, foraging street kid whos likely to be dead or in jail in years, hes in a very bad neighborhood in memphis, and his projected future when hes 15 is not pretty. How does he go from one of the least valued and visible people in his age to one of the most valued where all of a sudden hes a future nfl left tackle which in fact, he became . , all in two years . Guest hes not a left tackle nfl anymore. Host how does that happen . Guest well, one of the things is the forces in nfl football that led to particular thinks he could do to become very, very, very valuable. And in another other thing is a mother. So im going to write a story around this kid. This kid kind of at the center of it but not about these forces. And what, jazzed about it was i thought it was related to the moneyball story i thought. We think when we think of innercity, for america, we think oh, well, the athletes get out. Because they do get out some. Their talent are so great they get spotted as best players or football players. The truth is that even something as conspicuous as a future nfl left tackle would of have been missed but for the accident of the tuohy family, and some other people, but nevertheless, it took some accidents. If that kid can be missed, who cant be . What talents are in there . What future concert pianist is not being trained . Its such a waste. Thats what finally motivate me to write the story. But if my wife had not said to me you can do this, i dont think i wouldve tried. I have gone on in my writing career. I have gotten less concerned wonder if i should be the one to write this. But back then, im just anxious about whether i was the one who could do this. Host and your wife tabitha, audience may know who she is. Turkey most people know who she is. More quickly than they know who i am. So she was the face of mtv for a stretch when i met her. She was on air mtv. She was an art photographer. You can go to her website and see photographic shes really, really, really good. I watched her have a second act which is hard to do. When she was on tv, its funny, i dont know if youre this way, but she didnt ever really have the ambition to get tv. She started her life behind the camera as a kind of producer. She is interested in being behind the camera. The talent one day didnt show up, and really that guy who ran the places that you go do it, you be on camera. The person who didnt show up on, and she just took the job. Thats how she ended up on tv but i think her heart is on the other side. Host how did you meet . Guest thats a funny story. I was covering for the new republic in a very peculiar way a 1996 president ial campaign. And it was dole versus clinton and it was basically dole, the main candidates were not think anything interesting. But i noticed that there was a really interesting story that was kind of on the side of the campaign that was all the people who are running for president are never going to win. Most of them, names you never know. Its amazing how many people in the country take the running for president. Theres probably some in your neighborhood who thinks her sickly running for president. All these minor characters, candidates, pat buchanan is a pretty wellknown, alan keyes, who had this passion following, far more passion than the following of the major candidates who were never going to win. I thought i could use them to tell a travel story, a political travel story about america. So i was on the road just constantly. The primary ends and little bit of an intermission and am looking for material at a think im going to start, i picking up some of these trends i spotted while ive been on the road. One of them was adrift in youth politics, in mtv had something called choose or lose us that they owned the owned by directly with it in some way. Registering young people, go around this country, registerg young people to vote. So i called and they said can i get on the bus to see what youre doing . And the publicist unbeknownst to me at mtv went to tabitha who was going to be on the other end of the bus where the buses going that i was on. Seattle. Were going from portland to seattle. She went to tabitha and she said, Michael Lewis called and he made an interview with you. Which i not done. I kind of knew she was but not really. Then they came to me and said would you like to interview tabitha . Why not ask so we met and her attitude, she was mad when she showed up for the interview because it was dinner. She was set out for dinner with them. Hes not allowed to tag along at the event. I seem to what he does to people on the pages of the new republic and i dont want it done to me. And so i will have dinner with him and then tell him he cant, to any more events. So she flew in and we had dinner, and i was allowed to come along the next day. And the next. That was 1996. We were married in the fall of 97, and we have now three kids, going around the world trend with a lot more to talk about with our guest Michael Lewis on cspan2s booktv in depth. Lets get to your phone calls. George from new york city. Go ahead, please. Caller yes, hi. In your book you write about richard and you said but he wasnt at peace when he came upon [inaudible] anybodys idea of a future nobel prize. How did you get the youth were actually got the nobel prize that he would get it . Guest sure to get some background . Its about the most recent book which i published, last decembe december, why the title, the undoing project . Guest so the book is about this collaboration between who himself when the nobel prize in economics which was quite a treat because he wasnt in the country and did all that much of economics. The work they did in psychology has so infected economics that economics, the price couldnt ignore him. There is a general answer to question and that was when i thought about what these two guys have done, what they had done was attacked the idea of rational man in various ways they showed the way the human mind even in a coma state was susceptible to making cognitive error, to making a certain kinds of mistake. That these mistakes are meaningful and will lead to things like medical diagnoses, that investments in the market and that decision about which baseball player to employ if youre a baseball general manager. They run doing, especially a false and conceited view of man, but the phrase itself came off of amos, but i access to his papers. In his file drawer he had a folder that was labeled the undoing project. This was particularly poignant because these two guys had a collaboration that was more than just an intellectual collaboration it was a love affair. There was no sex but sex is almost beside the point. It was almost like a passionate love affair. The undoing project , what as called a project that he and then working on when they busted up, and they busted up because danny thought amos wasnt interested in the ideas that the project was a wet that moment trying to untangle the rules of the human imagination. The mere idea the imagination of rules and not just a freefloating undefined undefinable thing is a breathtakingly interesting idea and they were attacking get any breathtakingly interesting way. Danny had come with the original idea. He thought amos wasnt interested in his ideas but in this was scribbling away in this folder that he called the undoing project. Its tragic that there was a bit risky medication between these two people. He asked me a question. So is the bridge from amos and danny and economics is richer tuna, the main bridge. They the bridges but hes an economist who sees a psychological insights, these people had about how people, how the mind works belong economics. He won the nobel prize month ago. Hes going to get it in december i guess for his work. It wasnt that hard when i wrote that line in the book. Wasnt that hard to guess that richard was like one date when the nobel prize. There are a dozen people every year the names are bandied about and he was one of them. The thing that was interesting about him personally, why he makes this, hes important in intellectual history, but he was a guy who wasnt good at school. I mean, you think of people who are professional economist or you think theyre all straight a School Students in high school and map turkey was in turkey had a very interesting, he came in his own profession in an odd way. There was a point in his career where he was completely willing to give up economics. He thought he didnt belong in the profession. In part because the profession have an idea of human beings he felt was absurd. He was in a funny when he was predisposed to exploiting the psychological insights. Host in the book page 206 amos says its amazing how dull history books are given how much of whats in them must be invented. Guest yes. So one of the insights that drop out of kahneman and amos tversky works were pattern seeking creatures that we will see patterns even when they dont really, theres no real pattern. And amos gave a talk to a group of historians early in the 70s or while they were early in their collaboration. He was showing the way people will come after an event read a narrative that makes it seem like it was inevitable, this event. Like trump being elected president of historians will come along and show why that was bound to happen. When they could have never predicted it happening. In fact, what theyre doing after the fact is imposing a false sense of certainty on how the world moves, after making, theyre making light seem, events see much more inevitable than actually are. This is almost woven into the profession of historians. And that, in fact, the truth of life is the reality, as amos put it, is its not a fixed point. Its a cloud of possibility. There are many alternative realities that mightve happened. And there was nothing, the light is not as deterministic as all that. He put it much better, but better put in a book because i use his words rather than mine, but the person who watched him give this talk to historians in 1975 said that historians, they were ashen face when he walked out because they were where he was showing them to work and they were aware that they were susceptible to the same sorts of mental errors, imposing a fale sense of like a kind of cleaning up the past in order to make it a neat story that we all do as we move through life. Host if someone were to write a book about Michael Lewis, which author would you want to write this story . Guest is it, doesnt have, is a living author . Host no. Guest it would be a very dull book. This is the truth about, just generally about writers lives. Its probably like an inverse relationship between a interesting for life is a no interest in the work is that when you see a rightist ottava really colorful interesting life, the work is probably not going to be that good. If he becomes a character and im not really, so theres not much material. So on the one hand, im tempted to pick some writer i hate because its punishment. But someone it was kind of get me or be thundering about, george plimpton. He would be fun to have, someone, someone like that who approaches the act of writing as entertainment, for himself. Theres an aspect of fun to what hes doing. It certainly would not be some ponderous intellectual. That would be a a big mistake. It would be some really high level confident journalist, as a tie. Thats what i would pick. This isnt going to happen, i promise you. Host we will go to next in newark, new jersey. Thank you for waiting, mike. Caller no problem. Im a huge fan. I just want to know if you ever considered writing about, like Public Education or i think if you spent a year in a Public School in an innercity i i thk it would be a lot of stories there. Thanks. Guest i think about writing about the department of education right now. That might lead me there. But, so the short answer is no. I mean, its partly because i dont pick my subjects that way. I dont think heres a steer, an area i must enter. Healthcare or Public Education. I mean, it really is more accidental. Something curious can ever be something in the newspaper something curious that happen inside some school and it might lead me to a person in the school and that might lead to book, but that hasnt happened. Not that im not interested. My middle child is in a giant Public School. I worked, when im home, i have been derelict of duty right now. This fall i was meant to be a front desk knowledge of the Public School and it is most entertaining job and high stress job in the world. Ive been asked for 1000 questions i dont know the answer to any of them when people come in. Because its just this chaotic place. Its clearly like material in that world. Its such a like vital place, but i just, i havent stumbled upon the way in. Host chris from humble texas your next. Good afternoon. Caller good afternoon. I live right outside houston. Im a longsuffering astros fan and im a very happy camper today and probably for the next month or so. And i love moneyball. I did want to tell you that it was an awesome book and it changed not only thinking about baseball but business in general. So very well done. Heres my question. Im not an indepth huge baseball fan but i understand that the Houston Astros management has taken an approach that has been described as tanking the team in order to improve its prospects for a future run at a championship. To me that sounds a little odd and kind of not right. Id like to get your comments on that. Thank you very much try to thank you and congratulations on the astros. So theres a moral dimension and a strategic dimension to the question. Strategically, the philadelphia 76ers did this and ended up losing his job because a management couldnt stomach what he told them he is going to do in the first place, is like accumulate high draft picks by not intentionally losing but not really trying to win. Because the worst you do, the higher up you are, roughly, in the Draft Community access to view the talent year after year if you lose year after year. And you can build, i mean, i think the 76ers are showing it, that you can take your way to a really good team. Baseball, its a little trickier. I have thought about this. Im just talking, im not like the World Authority on this. I saw a headline about this the other day astros take their way to the world series. I was aware back when theyre losing all those games year after year and has a really Good Management that that was probably thinking look at the first pick of the draft for selby is running and is going to make a big difference. Im sure that strategically that but its hard with baseball because its harder to identify the best talent, the best amateur talent, that the best amateur talent and vascular is a little obvious. Just because you get the first pick in the draft doesnt mean youre going to draft the right person with it, and theres many, many, many examples of first picks in the draft who themselves have tanked it becaue it got hurt or because they just were not as good as if one thought they were. So as a strategy, its little trickier in baseball. I dont think thats just what they did. It was a combination of stuff they did. It is a sophisticated that the Houston Astros front office is a sophisticated intellectual operation. I mean, a couple years ago, without that much commentary, not as much as i thought, jeff who runs the astros had come from the cardinals and after a bit of the astros, some at the cardinals hacked into the astros computers if the fbi got involved endless talk about someone was going to go to jail. I lost track of the story but i thought isnt this an amazing thing that we actually have management, information, intellectual property in a baseball front office thats worth hacking . That if you go back 20 years you could, theres nothing you could have had that wouldve been worth having. They are doing things there that clearly the other team, people in baseball find interesting, and if they just lost that wouldnt have been a strategy. Morally, how do i feel about teams like the 70 sixers . Maybe not trying so hard. Not the players on the court but the management that assumes the telecom assembles talent with a view to the fourth year from now rather than . A little distasteful but it doesnt bother me that much and its kind of a deal with the fan base, like with the fan base put up with a . With the Customers Put up with it for long enough to build the team . If its really the main strategic option for becoming an nba champion, kind of hard to blame them. I think if i own the philadelphia 76ers and sam had walked in and said were going to take for three years and to have a shot at winning the check digit, but if we dont do that i promise you you will never win, i think i wouldve said just like they said, go try. I would hope i would have cats not to fire him at the end of it. Host liars poker came out in 1989. You talk about your own dad buying stocks and try to figure out, you know the story, who was making the money, selling the stocks to you and your family . Guest thats not in liars poker. I may have mentioned this at some point. Theres a funny moment my father still brings up from time to time when he tried to teach me about the stock market. I was, i dont know, 12, 13 and he came home from my father was her interest in the stock market, with a little black book, let the book we listed your investments and kept track of them. He explained to me what a stock was and he had bought me 20 shares in a Company Called charterhouse, the restaurant company. I think you picked it because it was good company but he also thought it something i could relate to like the own some restaurant in new orleans and i could follow it. In the legend says its ten dollars a share, 20 shares, 10n dollars a share and assess down below paid 230. Ten times 20, thats 200, why do we pay to enter 30 . He says the other 30 is the commission to the broker. And i said whats the broker . Hes the one who you call when you tell him you want to buy. Hes the one who placed the order. And i said Something Like all you do go all he does is take your phone call and call someone and say by that, effort that hes charging that . My father suggested i said what is he lived . I want to go aggies house. I i was so outraged egg his house. My first brush with wall street i had some of the same instincts i preserve to this day, which is their charging too much for the services. Host you say in the book that is my new his resolution i stop selling people things that i i didnt think they should by, for lent ive given my new years resolution. Guest you take me back to my youth. But it was one of, one of the threads that runs to the financial book, liars poker, the big short, flash boys is how screwed up the incentives are in the financial world. So a stockbroker back and today, still still to this day to some extent, has the incident do you straight. Thats how he makes money. Fact youre much better off not trading that much. An incentive to get bad advice. Now, doctors had incentive, they do sometimes have the dissent the incentive to prescribe medicine were given operation you dont need, doctors have a code of ethics they try to stop themselves from that. Even doctors are susceptible when theres a financial incentive to do things that they probably shouldnt do. And when youre dealing with someone elses heart, with her while its even easier to get into that incentives. The bad incentives i had, and i felt them immediately when i sat down and i guess my job was bond salesman at Salomon Brothers but the fact my job was to sell whatever they had, it wasnt just bonds, and it was to sell the stuff that we made the most money on and you got the most kudos and phone calls in the guise of the top of the firm and promise as a bonus it. If the stuff that no one else could sell. That stuff is good stuff, you know. The more money the firm made all of what you sold, probably the worst that was for the person you are selling it to. So you do all kinds of deals with yourself. You fool yourself about this isnt that bad and ugly people dont see the value in it and blah, blah, blah. The First Six Months into the job i could remember that pit in my stomach, i was 24, staring at the ceiling at night, i was living in london not being able to say because i felt like bothered by the situation i was in. I got over it. Everybody, i wasnt talking to widows and orphans. I was talking to my customers are professional money managers, people running hundreds of millions if not billions of dollars and they shouldve known better than to not listen to me. I was aware theres like this very gray, and i think it still is. Host were you making money . Guest wasnt the firm making money . Host you personally . Guest yes. Seems like pennies that to me seem like a fortune. The first year when i was 24 i was all in at about 90,000. The second year it was 250 or so. There were caps of what you would pay you. They had a a device for making sure we didnt get too uppity and after too much money. The second year that the most you can get paid. I was told if i state it would be double connection and double the next year, that i could me that kind of money. 250,000 went i am 25 or 26 seemed six seemed like, it was a fortune. So yeah, i was making money. The firm, however, this is how your mind gets screwed up when in the world, i had something, i knew how much money the stuff i was doing roughly was making for the firm. It was tens of millions of dollars. And so i can remember feeling kind of cheated when they were paying me what your payment. Thats what i thought i got to get out of here. My mind is going the wrong way. What they were paying me was trivial. It was a fun relationship. In many ways that world, the financial when i was in was just about more fun place to be. It was outrageous in other ways but the fact that i could be there on the Trading Floor, it felt like us in the financial, it was the center of the Financial University of my job was at the center of the center. And be writing magazine articles while im there, that are about what im seeing, albeit under a pseudonym, but known to my superiors that we are highly cynical about diane black her, my mothers name is Diana Bleecker monroe. I wrote under Diana Bleecker. One or two of them appeared in the new republic and they were all over the Salomon Brothers Trading Floor. Those people didnt know it was me but the management knew it was me. They kind of just let it happen. I mean, it was charmed. And when i left, when i left i realized i could make a living as a writer. There was enough attention being paid what i was right at people, there was a book contract. I left the two and 50 grand i was getting paid, i left that for a 40,000dollar book contract. But when exiting to the bosses, my bosses who i was sound of that is going to quit go be a writer, i dont write this book about wall street, you would think the response would be red alert, hit the button. Sign this nondisclosure agreement. Dont write a book about us. Instead it was they sat down with me like they said that with a crazy person and said dont do this. You are going to get rich here. Dont ruin your future by going and trying to be a writer. They were so genuinely concerned about my Mental Health that cannot about some book, there was a charm in that. If you try to do that now, if youre at Goldman Sachs right now and you rolled out the door after two and half years instead of going to go write a book, i mean, you wouldnt get home. Host so what did john think of the book . Guest he didnt like it. The book met with john, good friend, ran Salomon Brothers while i was there. Hes not a life anymore. He died recently, but the book met with an odd reaction in the firm. It was banned from the Trading Floor but everybody brought it in anyway and read under the desk. I was getting calls from friends. I had so many friends, i would just like consulate informed of what was going on. The upper management was vastly irritated with me. I cause and no end of trouble. He would call in later years. I had lunch with him. He would call me from time to time. At the end you he point amusing, bought boxes of the book and would sign copies of them. He told me he was my biggest customer. In the end there was some reconciliation, and i grew very fond of him. But he did not like the book. Host the title might be obvious but how did you come up with liars poker i thought it captures the level of a level of mendai ty as a game and it was a gambling environment. It just gave you the that feel. It didnt it didnt just pop into my held. I still have a folder called my title folder to deal with every book, and whenever im working, title pops in my head and i write it in the folder. So there will be dozen of possible titles, and i go look at that and i can remember that i i remember what did. I took six titles, i thought they were all beside, including liars poker and sent thome them to my editor and circled the liars poker and said, thats the title. Host tim, in california, you are next. Go ahead. Caller hi, mikeat lewis. You are my absolute favorite author. I live in san rafael, across the bay from you, and this shows you the power of cspan, letting me get in touch with you. I have been watching lately the news about all the Climate Change disasters, all of the hurricanes from the southeast and houston and puerto rico, and the devastating fires we have had here in the bay area, and it brought back to me a very vivid story about the Insurance Industry and how they dont pay claims even though you have a solid contract with them, and it brought back memories of a very big story that i know about between the Insurance Industry and the government and so forth, and i wondered how does a person get a story to you . How does a person get a chance to at least tell you the idea of a story or something that actually happened over a period of 20 years, and get you to think about it or get you to suggest someone that might be able to bring those issues out into the open for the public. Host tim, thank you for the call. Guest thanks for the call. Its funny. Lots of people know my next book what my next book is. It may be the most common thing that people do is come up and say you need to write a book about x. The problem is they should be they feel very strongly about whatever the x is but i dont have any particular feeling about it at all if wonder, why dont you write a book about x since you care so much about about it . Only once in my career had someone tell me you should write a store about x and it was true, and i did write astare about x. We can come back to that. Mostly i, for whatever reason, niece to discover my own stories, so i dont like i dont have a web site. I stay off of social media entirely. I try to hide my phone number. But i do read letters people write when they say, you really should write a store about x. This is the best way to get it is send a letter to my publisher and my publisher forwards and itll read it. Couldnt encourage i. The likelihood ill particularly change my life for two years because of the story you want me to tell is kind of its low. Im not that good the next question is, you need the story told . I can understand that feeling. Where do you go . Im not the obvious best person because im in the middle of a media enterprise. The obvious answer would be the San Francisco chronicle or some journalistic enterprise might be a good place to go to. Every now and then, someone will dom me and say, you need to write a story about x and i this will think i dont knee to write that story but i know a writer who writes that kind of story. Dont know thats ever led anywhere good. So this is a long way of saying, im a frustrating person to deal with if what you hope to get another of me is a book about a subject you want me to write about. Host but that story about xow you wrote about . Guest flash boys the most meaningful, genuine attempt in my lifetime to reform wall street from within, by a group of people, namely immigrants, who are now americans, who saw just how distorted and unfair the stock market has become and the big stock markets had abdicated their responsibilities to provide a to be an umpire to provide a fair place for little guys and big guys to come together and trade. Instead creating an exchange to president High Frequency traders from. Taking advantage of everybody else. When i first heard the stir was working on the big short and danny moses, a character in the big short, said to me a canadian guy from the royal bank of canada rolled into our office, and we had been having problem with our stock market orders help explain what was going on. Thats your next book. You wont believe this guy. This guy at that point, brad, spent several years with a team of people engaged in this forensic investigation of how the stock market actually worked, and he presented some of this to these guys, and they said this your story. Went, ya, ya, ya. Lets get back back back to thg short. And i wrote the big short, i a read a newspaper article a couple years on, about a russian guy whod a worked at Goldman Sachs and been arrested when he walked out the door of Goldman Sachs for stealing propriety tear High Frequency stock market trading code he had written or helped to write and somebody decided it was their property and he had taken a flash drive and in the fbi was on him right away. I got interested. I thought, hmm, isnt thatting in, the back end of the financial crisis, the only one who gets arrest from Goldman Sachs who gets arrestedes the person Goldman Sachs wants arrested. Then there was a news cant that the High Frequency trading code, the ron he had to be arrested and held without bail was this code, if it fell into the wrong hands, it was some high door hyperbolic use by the prosecutor and i thought, Goldman Sachs is the right hand . Youre presuming its been in the right hand . Theres code that can do this . I realized i needed to know what High Frequency trading was and danny moses said this guy who could explain it and i said who is this guy . And i went which i should have done in the first place and stat and listened to some electric toward from the these guys investigating the stock market and my jaw was on the floor. Thought, why didnt i listen in the first place . So flash boys comes about because of the conversation but no other one. Host jim from west palm beach, florida, youre next. Caller hi, michael. Big fan. Read liars poker, read the big short, saw he movie blindside. Could you give us your comment on the current state of markets and the way that federal reserve, the new york fed, the bis, the world Central Banks, where some of them are now buying stock, and they also have this low historic Interest Rate environment which is sort of an enabler of the government running huge deficits, and that how this is this low Interest Rates are really hurting saves. Your normal saver, and then also lastly, just right now we have a record amount of margin debt, and its put our stock market into record territory by a lot of different metrics, but it seems like no one cares until the yield curve inverts. I just appreciate you thoughts on this. Guest so, i suspect my thoughts on this are not as interesting as your thoughts on this. Youre probably paying closer attention to this than i am. I would just say, broadly, that you look at the markets now, were still living in the world of the financial crisis. The Central Banks are still trying to back their way out of what the felt they had to go to in response to financial crisis, which was the huge amount of liquidity into the markets. Do things like buy hundreds of billions of dollars or mortgagebacked securities. And theyre finding it hard to once you lower Interest Rates to zero or basically zero, coming back the other way is hard. I wonder, stock market there was a conventional wisdom tom when President Trump was elected pratt that the stock market would collapse. I collapsed for a moment and then was back. The caller is right that one of the unfortunate side effects of the Monetary Policy that was required to numb the pain of the financial crisis is the saves were hurt, and probably one of the unfortunate side effects is that people, if theres not a normal return on savings, people go looking for risk that maybe they shouldnt take. Host let me have you respond. This is from last year, on cnbc about flash boys. You said in the book, thats when i knew the markets were rigged. You having thises youre trying to pears your parse your words now. Quote little that way in the book. Lets walk through who you believe or not because you said it. Let me work. A yes or no question. Do you believe it or not. I believe markets are rig expelled i think youre part of the rigging. If you want to do this, lets do this. The word High Frequency trading should be eliminate from the vocabulary. You use that. Not his book. This computerized youre quoting. Computerized trading is computerized scalping. You cannot scalp trade. You cannot scalp orders on host mikeat michael louis, from august of last year. Guest wasnt from august last year. It well before that. The book cram out the book came out 2014. That was a great moment. That is brad, the main character of flash boys, reluctant to good after the guy who is the who runs the bat exchange, which being create nor benefit of high frequentty host the bat is better alternative trading system . Guest yes. A great acronym. Its bat. Sed up on the other side of the lincoln tunnel, and stock market orders from manhattan go through optical fiber through the lincoln tunnel and they get there first and High Frequency traders brad discovers theres something wrong in the market and finditude High Frequency traders putting small orderle 0 the exchange and able to detect the orders coming through the market and race to other exchanges in new jersey, like the new york stock change thatunder that are further away and front line the order. Host how many seconds. Guest less than that. Microseconds. And were talking about you cant its very hard to conceive othe units of time that are meaningful in the stock market. Units of time were talk about the speed of light from the other side of the lincoln tunnel to mawa new jersey, thats pretty fast, and people were at the time i dont know i dont know if theyre still doing the exchanges were selling the right to position your trading machine next to the server, which was actually the stock market, and the closer theyre in these buildings. They were fighting to get their computer next to the Exchange Computer so they could get a faster view of the market than everybody else. So everybody isnt seeing the market at the same time. Everybody sees it High Frequency trade ellers cobble together a faster picture of the market than the official picture. Anyway, that exchange was on cnbc. Several interesting things about it. The gee who was looking to fa fight with brad lost his job soon thereafter. It was reported, because of lies he had told on air, the new York Attorney general got in touch with bat and said you cant misrepresent your business. Brad asked him questions and they sid he misrepresented what anyway were doing. So hes gone. The exchange it looks ended up being dish was there but no. I was in a remote location but they had me a becomes and supposed to participate neglect conversation and was actually a fight between the two of them. They guy from bat was informed that this was going to happen in advance. We dont neither brad nor i knew he would be there until we showed up itch think what they thought would happen is brad would be humiliated. Instead he humiliate the guy. The great moment i remember from is, though, is that night, went to dinner with two guys who ran at the time Goldman Sachs Equity Department and they had seen how rot then market got and made a tactical decision they were going to support brad in building this new exchange because they didnt want to be associated with what was going to happen if anybody ever found out that what how the stock market worked. They joined the forces of good they said, when that show aired, which the cnbc producer i dont know if its true or not but later told me was the most watched episode on cnbc. Told my wife that and said, congratulations, youre the tallest midget. Nevertheless, these guys said the Trading Floor at goldman stopped. Goldman owns i dont know if they still do but open a stake in the bat exchange, they did not own a stake in brads exchange because brad wanted to keep it clean. Wanted to know didnt want the brokers to own his business. They would have been very happy. To so while its going on, this old goldman partner, guy from the old days, is standing there watching this, and he turns to the head of the Stock Market Department and says, that angry guy the guy from he said got 50 million stake in that company . My friend said, yes, he said the little guy . Meaning brad. Doesnt own any of that market . Yep, were screwed. Everybody was watching it thought that was a watershed moment. I that one day when this story is told, honestly from 50 years from now, people will say that was big moment in the history of wall street. Really think that. Think even though right now it is a world thats been built to combat brad, Political Campaign was essentially organized against the book and against him, rig regular laters are being bought and sold every day. Think theyre going to win. Theyre a Profitable Exchange now but theyre going to win and that wasp an important moment because, because, the regulatory pratt has proven itself enable unable to get its mind around wall street. Cant control wall street because at some level the regulator is being paid 1 50th 1 50th of the person theyre regulating is being paid. The incentives are all screwed up. The regulator just wants to work nor person theyre regulating the form can happen with entrepreneurship. People can blow the whistle and say you investors, dont want to be ripped off . Maybe its not a lot of money but didnt have to be this way, lets organize, come to us. And i think if he shows thats possible, that it will happen in other markets. Host that was from april of 2014. I think these are two of you shortest books, coach lessons in the game of life and home game an accidental guide to fatherhood. Yes. The question. Host why did you write them. What did you learn . Guest different in each okay. Home game is a journal i kept, structured journal, the First Six Months after every each of my three children were born, and what prompted it was i was hey done when our first child wag born, quinn, now 18, i was having wholly inappropriate responses to the situation itch didnt understand why i didnt feel instantly attached to this creature, why i didnt feel what a new father was supposed to feel, and i would talk to my wife and she said, you need to go to therapy or write it down kind of thing. So i started to write it down and i confessed to my friend, the journalist, jacob, the kind of things i was thinking and feeling, and he would say, i dont have anything to say but im thinking and feeling feeline same thing. He just had kid. And so i started to write a little dish just essentially started to publish bits of the journal in the online magazine which jacob edited, and eventually became that. I tell you that when people come up to me, and want to have the warmest conversations about the stuff ive written, those are the two books they want to talk about. Either dads who said, thank god. I thought i was going insane. And i read and it i or moms who say, i thought my husband was the biggest jerk. You gave me great relief to know it was one who was even bigger. Host did you feel differently after your subsequent kids . Guest i am such a involved and in love dad that all that seems like a distant memory, and if i hadnt werent it down id say it was great right from the beginning, but it what nose great. Was horrible. So i really, really glad i preserved it. I feel different with subsequent kids . No. The first six or eight months i found just hellish, every time, and it was it wasnt just that. It was that wasnt just that it was bad. It is how it was bad. The positive thing is wasnt experiencing, as well as the negative thing is was experiencing. And it was just different. Sometimes its where writing comes from, you feel like what youre feeling and thinking is different from what everybody is saying. Theres an opportunity in that. So i smelled literary opportunity. I always thought this is really i confessed this, and i think my wife thought this. If i turn this experience into literary material im more likely to spend more time with the kid, because at least theyre literary material. So then subsequently what happened is, i just got once youre what found as a father is the act of taking care of where love comes from, the love of the child, its not not exactly wired for it. At least i wasnt wired the same way my wife was wired for it, but taking care of something, teaches you creates the feeling of love. So you in the taking care of them you get to a different place but takes a little while. Once you start talking, it was a completely different thing. Once you can star interabilitying interacting them, it changes everything. Im very involved now, coaching and everything if think fatherhood is a joy, but i didnt at first. Host your wife keeps you in check . What way. Probably the answer is generally globally, yes. But specifically with regard to children . Probably kept me in check in the very beginning and then we both just very involved parents. Not exactly a division of labor anymore. Wore both hands on. Except when im on cspan for three hours. Should be parenting right now. Host we have another hour and a half. Bob is next from kansas go ahead, bob. Caller michael, im very impressed with your body of work. I have a series of questions. One thing you first brought up that drew my attention is the the come modification, and the robin hood tax, chase sales tax on zap trading and thats an interesting concept in terms of what would that that what put the change and balance on the zap stock traiting at the speed of light. Guest so, tax High Frequency trading, people have suggested that. As much pleasure at it would give me because they irritated me no end, the highfrequency trading industry. Their public presentation is you never know what the unintended consequences of the tax i worry about and theres better ways to attack the problem. Its at the level of incentive. Every one of these wall street book its ive written, incentives are in there, and do not allow exchanges exchanges pay brokers to send them orders in a certain form. Get rid of that do not allow exchanges to sell privilege access to information. They can say oh, yeah, everybody can buy it but not everybody can spend a Million Dollars a year on technology needed to assemble a faster picture of the stock market. If you just stop those things, which you could get is the benefit of highfrequency trading and there are so. Without so many of the cost, so much pollution. Its not that we want to go back to a time where trading was much slower and run by humans thats not the point. The point is there have been great gains to stock Market Investors like to everybody else from technology, and wall street has managed to claw back gains in the form of rents in athey shouldnt have. Host rupert in rancho cucamonga, card. Caller i wanted to ask michael the question, what motivates him in his writing, and then i kind of he kind of answered the question by saying hes a great storyteller. What wanted to find out from michael, though, he said the fact that some friend of him said he didnt think the would have ban great writer, yet he tells such fantastic stories. Think youre a great storyteller. What motivates you to be such a great storytell juror thank you, rupert. Guest this is an interesting question, why people write. Some people write for money. Some people write for political they have some political position they want to get across. Politically with a little p. Some people right because they like attention. I think that probably all of the motives play part in my life. I cant deny that it would be harder to do if no one paid me to do it or that it would be harder to do it if nobody paid any attention to it, or it would be harder to do if i didnt have an overt political interest in the story i was telling. I think actually, underneath off that is the fact it just gives me pleasure. The doing of it gives me pleasure. When im sitting there, ive been told dish write with head phones on. Listen to a track of music over and over and it drowns out everything. Its silly but thats how i write. Have people teal enemy when theyre in room with me, im laughing all the time. Which is sad but it gives me pleasure. When i was working on my southeastern thesis and writing magazine articles that no one would ever read, the time just went away i just really liked doing it. Host do you have an office, where place where you write . Guest yeah. Have in berkeley, california, and i have a little redwood cabin, 50 yards from our house. Walk down to the cabin and i work there. I have little kids kids and i de my tenyearold walker to school and then i write. Novelists have the story where they have to write 500 words every day, or have a rule that makes themself write a certain amount over day itch belt i write only one out of three days a year on average. Much a lot of my time is figuring out what i want to write about and learning but it. Im a nonfiction writer, and even novelists have to do some research but diane awful lot of work for figure out to find the part of real life i want to carve out into a story and figure out how to carve it. Host shankar in new york with Michael Lewis. Caller ive always found you to be the most sensible about the room when i read you and i want to did your advice what to kell me young son who enjoys his job in a big investment bank, but is dreading the prospect of hearing about his bonus numbers in a couple of weeks time, and its really affecting everything he feels about the job. Guest because he is afraid its not going to be as high as i he wants . Caller yes. That is part of the bonus system, isnt it . Guest yes. If he actually likes the job apart from whatever the bonus is, boy, really is making himself unnecessarily miserable there are whole class of people do mostly for the money and thats a shame. So he is already ahead of the game. Tell him he is already ahead of the game because he actually likes his job. If he want piston put it in perspective, send him a list of what, like, the average pay for the for coalminers give him a list of other jobs very unpleasant where they are paid a lot less than what he will be paid. Think that if i had a child who wound up in a while street firm highly unlikely and that child said to me, it really sucked because im only getting 150,000 instead of four million or whatever it is. I would say, heres a ticket into the woods. Go spend a couple of weeks and walk around the wood asks think about your priorities in life. Youre do so much better than everybody. If you let this if you let this make you miserable, youll let anything make you miserable. I would tell him its not acceptable to be to let a wall street firm have that kind of power over his happiness. Host one more call, troy, from bethel, missouri. In regard to the film adaptation of money ball if you felt the portrayal of art howell was accurate, and it has nothing to do with Phillip Seymour hoffman, he was fine. Then when you were researching michael lore at the university of mississippi, did you come in contact with Patrick Willis, who of course, use know, later went on to the San Francisco 49ers and will probably be in the pro football hall of fame. But Patrick Willis had a really tough upbringing, too. Have a good day. Guest thank you. Host thank you, troy. Guest ill take the second one first actually, our last question before the break . Art howell quickly. One significant difference between the character played by Phillip Seymour hoffman, may he rest in peace, and it was the art howells resentment for having his job taken over and his strategy dictated by the front office. That simmered and was hand of healed in a passive aggressive way in the life. In the movie that ahead him get in the face of billy bean and fight with him. That didnt happen. So that was kind of like willingness to actually fight with his bosses, he didnt have in the flesh. Patrick willis. Patrick willis, was a really interesting character. When michael lore got the university of mississippi, he was maybe a youre or two behind patrick, and michael i can remember i have the answer is, yes, met Patrick Willis and had lunch with him because there was an instant connection. Patrick had been adopted bay white family, and at a pretty young age, and the family saw in him someone who might connect with michael and make and smooth his transition into ole miss. What i really remember about Patrick Willis is that he had been on the bench, i think, his freshman year, and he was this guy was an unbelievably gifted linebacker, and i was up in the press box at the ole miss ole miss stadium in oxford, mississippi, sitting with scouts, nfl scout, and i was sitting with them someone from the giants and the pounds, just there to watch lsu play ole miss. Was there because i was working on this book and i wanted to talk to them about what they thought about michael hims was on the field. Looked like an nfl left tackle i was just kicking tires and an lsu running back comes through on the ole miss three yard line, going score and out of nowhere appears Patrick Willis, gets him, lifts him up on his shoulders, jackknifes him into the ground, and the running back weighed 24pounds and the whole play, what was that little and after such violence you i turned to the guy from the giants and i said, do you know who that guy is . He said we have to talk to him. Hes obviously covering a lot of ground on the field but nobody knows who he is yet. And so i can remember it was kind of the moment he was being discovered and it was entering you. Think the guy is an orb pro linebacker but the year before he was on the bench and then comes off and wreaks havoc on the football field. So i remember Patrick Willis fondly, very, very sweet guy who you would not believe had the passion for violence he displayed on the field. Host your dad was a lawyer, your mom a community organize sneer that makes my mom sound duller than she is. Would say activist. My dad, yes, and call him a lawyer . He was a lawyer, but what he did is he ran a law firm. A really gifted administrator who didnt particularly like being a lawyer but he liked running a law firm. He ran a law firm. Both were people who between them they ran every Civic Organization in new orleans at one point or another, and my mother is still very active. On the board odd various Charter Schools and created Charter Schools after katrina, and she is out the door every morning at 6 00 in the morning and busy all over the city. So, my father is mostly retired. Host your greatgrandfather. Guest my greatgrandfather is the story. Were going to get into family . The short story is, my lewis ancestor, joshua lewis, my greatgreatgreat grandfather, was sent by Thomas Jefferson to new orleans, in 1803, to receive the purchase from the french and he became the the Louisiana Purchase the first chief justice of the Louisiana Supreme Court and wrote the first legal point for lewis. People lawyers know this. And stayed. His son was the mayor of new orleans, john lewis. And the family never left down on that side mitchell mothers side of the father, my fathers side of the family refers to as the carpet baggers. Showed up in the 1830s. My fathers family have been in new orleans since then, and has been woven into the fabric of the city in a lot of different ways. Our guest is author Michael Lewis on cspan2s tent in depth here on book tv. Well be back with more of your phone calls on cspan2. Most kid his background wouldnt come within 200miles of this place. Hes new here. Expect you to make him feel welcome. Hi. Mylan, im shaun. Big mike. What is he wearing . Its below freezing. Do you have anyplace to stay tonight . Dont you dare lie to me. Come on. Is this a bad idea . I thought it was just one night. It u. S. Just for one night, right . Find time to figure out another bedroom for you. This is mine . Yes, sir. Didnt have one before. What, room to yourself . A bed. Not what youre doing but dont be surpriseed one day you wake up and hes gone. Michael was here. Fell asleep with one eye open. You then my son, you threaten me. Michaels grades have improved enough he can go out for spring football in march. One, two, three, four. He is your family, michael. When you look at him, you think of me. Are you going protect the family, michael. Yes, maam. Sj you want to get this. Whose the big guy eating with your little brother. Big brother. What youre doing is so great. Youre changing that boys life. No. Hes changing mine. Your goal shouldnt be to buy players. Your goal should be to buy wins. Who are you. 25 players have been overlooked by every a time for some reason, an island of misfits. In here is a championship team. Who is the kid. The kid is the in gm. Were going to shake thing. Tell him. You want in to when i point at you. Were the card counters, at the black hat table. Were going to children oddses on the casino. You dont put a Team Together with a computer, billy. Billy bean has tried to reinvent the system. They call it money ball. I think he bought a ticket of the titanic. Hey, daddy, do you think youll lose your job. What. I good on the internet. Dont go on the internet. Watch tv, talk to people. Do you believe in this thing or not . 100 . Listen up. You may not look like a winning team, but you are one. So, may like one tonight. Doing something really unexpected and special and the whole city is feeling it. If we win with this team, we changed the game for good. Things have conditioned us to trust them. What have we got . 25 Interest Rate on credit cards, theyve screwed us on Student Loans the can never get out from under. When the banked committed the greatest fraud in u. S. History. No one is paying attention. Unbelievable. Four outsiders risk it all to take them down. Were going to make the big banks hurt. How can the banks let this happen . Fueled by stupidity. That wasnt stupidity. Thats fraud. Tell me the difference between stupid and illegal and ill have my wifes brother arrested. Banks got greedy and we can proved off their stupidity. Do you have any idea what youre up against . We have to act now. So mike barrier, who doesnt wear shoes, knowser more than the federal government. Yes, he does. I worry about you. Fine. No, no, no, no, my cap. Schmuck. I love you honey, tack to you later. Okay. Were right. People losing homes, people lose jobs. Banks have more incentive than greed. Youre wrong. You can do everything straight and still go broke. We need for go all in. The rating agencies, banks, governments, all asleep at the while. You think this is a game . Its a once in a lifetime deal. Im thinking. Sometimes theres nothing you can do. Its scary. The banks happen fraudded the american people. Now its kicking their teeth. Okay. Here we go. The big short. [music] host we continue on cspan2s in depth with Michael Lewis, the longest interview you have done. Guest surpassed by an hour already. Host you better keep me entertained. Host lets talk about two of your older books. The new, new thing in 1999 and next in 2009. Guest yep. This is again related to my wife. She dvr a every met tabitha host are you going to write a book about your wife. Guest maybe at some point i should. She got a fellowship at stanford. So this was 9798 calendar year. Host just married. Guest she got it before we were married and got married during the fellowship, and i just followed her out there, and didnt have any particular reason for being in palo alto, california, and never had been the internet bubble was happening around me, story after story after story, so i start to poke around that. And it was clearly one of this Historic Events that i happened to be sitting in in the middle of, and i thought how do you due it as a story, who is the person who sits in the middle of this thing . At the time the person was the guy named jim clark who has he was part of the Silicon Valley old guard in some ways, started a Company Called Silicon Graphics and made one small fortune that way but was behind the creation of netscape, which was launching the web. Its a funny store. It occurred to me. I was watching the things around me, writing about various internet phenomenonons but at the sentence of it all was this unnatural willingness to just plow anywhere everything you had just done. Silicon valley was a machine for plowing under the old and replacing it with the new, and people dont naturally usually do that. Companies dont naturally do that. You have to create an ethic, create an expectation that thats going to happen for it to happen, and clark, even though he was then probably in his 50s. Not a young Silicon Valley person was legendary for plowing under his own life and business, always kind of moving forward. Can remember, a coffee shop across from the street from the stanford campus and i thought i ought to write a book about clark. This sun sun unsettledness feelu feel out here. Didnt have a cell phone, very throw it get a cell phone. Wish some part some part of me wish is never had one but nevertheless, i went to pay phone in back of the coffee shop and there was a pay phone and there was also a phone book, and i went in the phone book and i found clark in the phone book, i stuck in a quarter and i called jim clark, and i got a housekeep are and she said jim is in the office but you can call him there. This is a billionaire. And i called the next number. He picks up thank you phone and i said im Michael Lewis he said i read liars for poker and i was on a bike. He said come on over. And he was at that time his office was a pretty depressing room on top of a jenny craig weight losses center. What he was doing when i got there was trying to program, write the program for a giant sailboat, for a yacht. That would enable him to sail the boat across the atlantic from his desk without just like a challenge. A fully automated boat that he could control remotely, and i just thought dish started talking to him. Just want to spend more time with this guy, i thought. And that led to in the new, new thing and that led to some articles on the back of the new, new thing which was glued together in next. In a writers life there are book and booklike objects, and books conceived as a whole thing and booklike objects are a magazine piece that is between hard covers or a home game was a series of journal is published and pasted together. Host what was netscape . Guest netscape . Yeah. Guest it was the first router. And the you think back to that time tech browser is what people thought would be valuable. Host it want that long ago knife you go back at the the end of the new, new thing jim clark work was regarded by everybody as the visionary in Silicon Valley, who is kind of seemed to always have his finger on what it about to happen, the end of the book he decided hes getting out of this react of the internet bubble because he says its just become a bubble, its no gotten so crazy, the stock market valuations are so crazy, he wants to get his money out because even he is scared, and the deal that kind of triggered the, oh, my god, this is insane, is the someone says, you can own a big piece of this Company Called google that is a Search Engine but you have to pay 25 million for it. He said, thats ridiculous. Not going to pay 25 million. That would be worth maybe tens of billions of dollars now. The thought that goggle was preposterous, and so he gets out. The valuation of google was preposterous. One thing about next we have an hour, chance for me to talk about books nobody asks me about about. I got interested when me bubble burt clark was right. The internet market collapses, worth hundreds of millions of dollars and then zero the next day. Thought when i was writing about this event, that the internet the financial consequences of the internet were trivial compared to the social consequences, and that as a noise in 2001 was, all fraud, all phony, not that big of a deal. A lot of that. And i thought, no, actually, we want to do is trace what the social consequences. Mate be true the internet is not an engine for corporate profits. That but it is an engine for social change. So i wrote these long essays reported pieces about things that happened on the internet that gave you a glimpse into a very odd future. So, one of them was about a kid in new jersey, named jonathan labet, who at age 13 or 14, he was a kid of a very modest family, middle, lower middle class family, whose grandmother has given him 100 bucks or 500 bucks at some point, and he gotten online and opened a brokerage account, dumb yesterday up the documents in order to seem like a grownup and on the internet nobody knowsor a dog or a kid, and he had turned the grub stake from this grandmother into i think 700,000 or 800,000 in trading profits, and was doing things like going to the local mercedes dealer, even though he couldnt drive, picking out a car. Handing over 50,000 in cash, and saying, hold it for me until i get my drivers license. He was outrageous. And the sec had followed his activity because of what he was doing is finding tiny little Penny Stock Companies and then buying the stock and then promoting them on internet ports, like writing advertisement for them, because he thought thats what you do in the stock market but a he saw that is what Merrill Lynch was dog but the sec couple on on him forestock manipulation. So it was a story about the phenomenon. Host how much did he keep. Guest he kept almost all of it. If he paid a fine, it was trivial. He kept almost all of it. Host you know what he is doing today. Guest havent learned from him in years, which is odd. Most of my subjects anytime close touch with. ll hear from them once a month or every couple months. Last i heard from him, he sent me an invitation and a house in miami beach and had he had gotten into what, but he had decided in his head, when guy into this life a bit because i wrote this piece about him and trying to coax him into going to college and he thought college was a waste of time would make money without going to college and i assume thats what he has been doing. Host ron, joining us from orchid, new hampshire. Youre on booktv. Good afternoon. Caller hi, thank you for taking my call. Guest hi. Caller i was wanted to get your comment on the uniting amendment . Guest no, havent heard of it. Explain. Caller gist the crowd sourced constitutional amendment. The last few years people have been going on a web site and trying to write a new constitutional amendment and addresses a whole bunch of things, including, like, term limits for congress and legalizing pot, and getting rid of discrimination against sexual orientation, and sexual identity. All this stuff that Congress Wont do but the people actually want. And one thing it does that i wanted to ask you about was the tax system. It creates a tax that taxes all transactions with no exemptions or deductions, and the total transactions in the United States total over 1,200,000,000,000,000 per year. And when you tax that, if you tax less than 1 , like a half a percent, it comes out to over 6 trillion. Host ron, thank you for the call. Any thoughts . Guest so, what is that adam sandler movie, maybe billy madison, he is in a debate in school and says what he has to say, and then the principal says thank you very much. Were all at stupider for having herd that. Whatever i would say you would say, thank you very much. Were all a little stupider for hearing that. I dont know what he is talking about. Sounds like a really interesting constitutional amendment. Host let me tie it into what you wrote about in your books, the role of social media, the role of the internet, in politics. Because there is a direct connection we saw that in 202016 with donald trump and twit. Guest i am a story teller, and i have not i mean we can all see the internet is having weird effects in politic die have anything to add. Host from next you wrote, people who bother to imagine how the internet might change democracy usually take it will take power from the politics and gift it to at the people. Guest id write that . I dont reread any of my booked ever so i dont remember most of what i write, havent been i dont remember what i wrote. Said that is the conventional wisdom at the time . Did i chat length it . I did i have the decency to say maybe its not true . Its had obviously perverse effects. Its opened up its open up the political marketplace, right . Its been part of the among the forces that corrode the authority of the party system. Without the internet you dont get trump, anything like trump. And trump, without the internet, cant communicate the way he communicates. You dont get twitter. So, its i i think its broadly democratizing and. Host going back to our first hour, this is from marsha grace him sent an emem,since michael studied the briefing book in the department of energy whoa what do the recollection of is news for node about Nuclear Energy . Guest that funny. I went into the department of agriculture. These enterprises are so vast to get them across in 100,000 or 15,000 words is a huge challenge, so i went in with a particular angle and the angle was, what is the risk . What is the risk of a white house that is disengaged from actual managing the government daytoday and didnt bother to get the memo and understand what the department does that hasnt staffed up the government. What could go wrong . So in the department of energy, on that i met the story starts with a several named john mcwilliams, the first ever chief risk officer inside the department, and he comes from a very successful investment career. Made his fortune in private equity in visiting in things like nuclear power, and he was brought in in the first place to help the department assess the risks it was running in the investment portfolio. They do make their loans and sub diedded loans and grands to technology that may pave off hundred years from now. They do longterm kind of Scientific Research and longterm investing in technologies. But he morphed into this other thing, this other job of just looking at the whole department of. What is the risk here . And nuclear Nuclear Energy was not on the risk. The future of Nuclear Energy was a footnote in what concerned him, and so what concerned me in the piece. He was much more concerned that, say, the iran deal, the iran nuclear deal, would fall apart because the white house wouldnt understand that it had been negotiated by people who actually know how you make nuclear bomb and so actually made sure the iranian government wont be able to do it because of this agreement, and that they wont actually get to that because they never got briefed on that. So, in any event theres a story to tell about Nuclear Energy that i dont know much but but its an interesting story. When i was a kid, that was supposed to be the energy of the future. What happened to that . I think what happened was we overreacted to the mile island or three mile island and Public Policy took odd wrong turns. It would have been a smart way to go to invest in nuclear power, and we didnt go there for complicated political reasons that would require a long piece to explain and a piece i havent written. Host you brought up the president a couple of timed finish the sentence the state of american Politics Today is what from your standpoint. Guest if its a word . And disturbing. Would be another word that would come to mind. The notion that theres no such thing as the truth or no such thing as facts that, that you can assemble your own version of reality with your own pundits and ignore evidence to the contrary, and you can have an electorate that is so poorly polarized it sees the world and cant imagine how the other side sees the world the way it does except to ridicule the other side. Makes you fear for democracy. The absence 0 a Walter Cronkite like source of news where everybody agrees, thats more or less right, we more or less trust that, where were all participating in the same reality. Seems to be like a necessary ingredient to democracy. So, i think trump is an existential threat, i do, and i dont know hough its going to play out. I predict my last book, the the undoing project one of the big takeaways is people are predicting things, turn and run as fast as possible the other direction because most of the things they say are predictable, are not. Predicting weather will happen is the political life of america. Dont bother. All kinds of we dont know the things that are going to happen, going to drive the future. But it does seem like a very volatile, uncertain time. What drew me in first place to writing this series in vanity fair that may become a book, want just how alarmed i was that the new administration had just ignored this wonderful course in federal government that was there for the taking, but that the whole approach to governing seemed to be increasing, ever so slightly, in some cases, not ever so sightly in other cases, catastrophic risk. The risk of various catastrophes happening. And that is what what is on me mind now is how we get through this alive. Thats what is on my mind now. I live on he west coast. Were bearbaiting the north korean government, like who knows if we need to get decide its fun to shoot a missile at us or put one on a boat and float into it los angeles harbor. I think all kinds of very, very serious risk. John mcwilliams in the department of energy, his first concern, back in february, before north korea was on anybodys radar, really, was north korea and he said the reason the department of energy is up worried about north korea and you wouldnt think why would the department of energy be involved in north korea at install the run the national lab, the National Science lab, that evaluates what the north koreans are doing when anyway fire these missiles seemingly willynilly interest the ocean and they are radically improving missile technology. Making jump nod one expected hem to make. I think they imagined to get in ukrainian scientists in to help them build missiles and acquired intel electric fuel property and made them much more lethal. Were sitting in a world where nuclear war went from something that i didnt think very much about, a couple years ago, and im aware theres a risk, to being a real risk. And less dramatic, difference function, like to steady corrosion of the federal work force because people dump on it all the time and dont appreciate what it does and think that its all waste and inefficiency and corruption. The corrosion to this society that emerges from that approach to managing it, may not see it as dramatically as you see a nuclear explosion, but you will see it it will have devastating effects. So, im trying to be hopeful. Im naturally an optimist. Amos, a character in the the undoing has a great line. Eeyore is wandering learn look what are cat is going to go rein. Amos says pessimism is stupid. You lift the bad thing twice issue first you imagine the bad thing happening and then when it happened. Wander around the a cloud of despair because nuclear bomb is going off in San Francisco. What good does that do . And i dont. Almost cons shoesly adopt a strategy of optimism. But the strategy is challenged daily right now. It is. Host were talking with Michael Lewis, 14 books . Guest the counter is in the literary world i dont get. Dont know how much book is have written and i think of hem not at exactly books. I think i edit an anthology of poo peoples writing for charity. I dont even know the title of it. Didnt write anything. The actual books were conceived as books, and from the beginning to end, and handed in as books, are liars parker, the new thing, money ball, the blindside, the big short, the undoing project and flash boys. Host with that we go to sandra from santa rosa, california. Hi, michael. What an interesting to listen to what you have just been talking about. My gosh. Just decided that you should be have a weekly hour program on television. Guest haha. Youre hiring me. Caller yes. Yes. If i could do that i would. Guest youd be so sick of me, trust me. No, no, no because Everything Else is sound bites and nobody knows anything. We dont get in depth information that we need from you. I read the department of energy article, and it was so revealing, and i felt like i was on the inside, but we dont know anything. I knew it was bad, but i didnt know how bad it was until i read that article. And one of your other well, your book i like the got the most out of was boomerang. The way you express yourself is a way we need to hear and most of us dont too busy watching not me but stupid programs on television instead of becoming educated about what is going on in the world and what you just said for the last, what, your last five minutes about the state of the world. Its pretty horrifying, and just want to commend you for doing something to help to us be more informed. Host you brought up the book boomerang. Guest you are going to keep her on. Dont cut her off. Shes in santa rosa . Host sandra, stay on the line. Caller okay. Guest so, boomerang is a book. Between covers and its but it was written in the first place as a series of magazine pieces and the idea was the thing that interested me was on the back end of the financial crisis, i had written the american story, written the story of what happened in the big short, to us here, but this is a Global Crisis and it was experienced by different societies in different ways. It was the same root cause, which was indiscriminate lending. It was profligate lending, people handing out now people to do what they warranted with it without thinking too mach what that was. The the leonards ceased to be the brake on the process in the Football Game inch iceland, for example, this population the size of peoria, built three of the world residents biggest banks in a matter of a decade, and developed a whole rationalization about why iceland for years had been its whole history had been preventing from achieving the capital of Global Finance and ice landic president was giving speech speeching says the viking mentality is one needed in finance and now the world can see were narl gifted finance years so they had that dilution until i it came crashing down. The greeks want today bloat their already bloated Public Sector with the money. What miami did with the money, i thought of it this i would. Its like entire societies were left alone in a dark room, with a human sack of money and allowed to do whatever they wanted with and it you could see the perversions in the society buy what they did with the money. In this increasingly one world, culture, where you can buy the same stuff in new york as you income london and tokyo, not many opportunities for distinctive travel and get at aspects of the society that are peculiar about the society through some lens. And this was getting what is macular about iceland and greece and ireland and germany, through the lens of money. So story offered countries experiences in financial crisis and the material was unbelievable. Iceland. I hate to go on too much because she is going to ask a question. The population, 150,000, 300,000 people, generally the men were the bread winner, all related. And the men the chief source of wealth was fishing. Thats what they did. This fished. Also had cheap energy but the energy was it was thermal energy. Geothermal energy. So for complicated reasons they smelted aluminum in iceland, but the fishing was the big thing. The men were fishermen, and this story happened over and over. Fishermen goes to with wife and says, bjorn says i can change Foreign Exchange at the new bank instead of fish and you make twice as much money and dent get wet, its not cold and miserable and were actually naturally good at trading foreign currency. This wife says, are you sure about that . Why would you know anything about trading foreign counselor currency. He said everything is getting rich. Dock the boat. Were going to whip them and drive them on the training desk. Interviewed that person. This isnt an exaggeration. Then it turns out that what theyre creating afinancial calamity of global epic proportions. The banks are catastrophic. Comes tumbling down. I go in after it collapses, the only financial vie able Investment Advisory business in the country when i arrive is a woman who is set up come to me and i will help you figure out how to invest you money. Business the premise is promise no man will ever be allowed to advise you or get his hand on your money. The mistrust of men all male overconfidence. The husband said i know where im going and the wife all of sudden there their three straitsway from where theyre supposed to be and me move says, look at map. The country elect the first female Prime Minister and the first lesbian Prime Minister. Didnt even want the head of state sleeping with a man. The hostility towards the male financial overconfident impulse was at its global peak, and so it gave thats what was write about. Different things in different plays. So we probably just cost you 10 decide in so 10s do in a phone billy san da, please continue. Caller well, at one time you said that you were going to write about california, and i think the pension issue that has become such a huge problem. We dont have money to spend on important things because of the amount of money being spent on penguins, like 100 million in Sonoma County alone. Thats not a year, is it . Its horrific, anyway. So that was what i was wondering about. Guest well, so, i did write about it and at the end of boomer rang one chapter about colorado. Not a particularlied identifying chapter but it did get at attempt took brave poll thank you chuck reed was the mayor of san jose who was in a ward with the police and Fire Department because he was trying to cut their pensions. Its a huge issue. An issue i might find a way to write about because the finances are out of control. What we pay what how california is pendses its money a lot of the if the tax revenues are strong, so on, but the combination of really bad deals, the state cut with public employees, and the legal obligation they therefore have, to pay for these pensions, with low investment return, because Interest Rates have been low for so long. This is a slowmoving iceberg of a problem, but a slow moving catastrophe in the making. Its not just in california. All these pensions calculations are based on returns of 8 or some assumed investment return that the pensions themselves are not earning. So eventually youll have shortfalls and well have some messy political reckoning. Host among your favorite books confederacy of dunces explain that. Guest a novel written by a man john kennedy tooles who killed himself before the novel was published. He had gotten as far as the publisher being interested in and it going back and forth with letters and then i dont know what happened but he killed himself. And its the funniest its one over the two or throw funniest books ive ever read. The book anybody asks me, can you give me the book that describes new orleans, its the book i give them. Its a book i give them because ignatius riley, the character at the center of it, thinks don keough tate the best exacter since don quixote, and a wholly original character and there are tears streaming down my face when i read it. Havent read it in a decade or so but one of the few books i ive read more than once. Host how it published after he killed himself. Guest he inbedded in the novel imbedded in novel a very funny portion of his own mother who is a lunatic. A charging new orleans lunatic, and very expressive out the woman. And after he died, she was convinced already son had written a work of genius, and she ran around bothering people to read the book, and she cornered the novelist, walker percy, a famous novelist who lived across the lake from new orleans, after one of his classes. He was teaching at loyola university, and hands him this dirty manuscript in a brown paper bag and said my dead son wrote this, please read and it get published. He said in hiss introduction the book, this is just what you want, the mother of a dead child who has written a work of genius and now its in my hands. And he said he started reading this thing, thinking he was going to read gave it two of three page and then could say im sorry, its no good or couldnt be published help said he turned the pages with growing wonderment. Constant believe how good it was. So he got it to a publisher. I cant remember who. Anyway, he get is publish and it wins either the pull lit irore the National Book award, the same year walker percys book it is up. But in this culture, unlike in english culture, it is really hard to pull off a come nick novel that will comic novel that will be rick niced in literature, the same way a comedy is made a movie and taken seriously as something that makes you cry. And so the oscar always goes to the drama. Its one of the funniest things ive ever read. So, takes me theres a catharsis in having something explained to you that you didnt quite realize and needed explaining, and one of the things i needed explained to me as a result of my upbringing in new orleans, whats so secular about this place . So peculiar about this place . I cant put words to it and, he not only puts words to it, he creates characters that embody it and you just go, oh, this is home. Host next is rage in north carolina. Youre on the air with Michael Lewis. Hi, michael. Watched you on cspan at the National Book city of, and i tivod and it played that interview over and over when i get so damned depresses. Second, believe you gave an interview and i dont know where on undoing project that said if you make decisions using your gut, youre going to get nothing or worse. Since we have a president that does that, are we screwed . Guest the short answer is, yes. So, the point this the source thief money ball story that the point in the undoing project one insight is that you can show how people were just going by their gut, will get to wrong systematically wrong answers. Not that the gut is always wrong. But if you have a chinese between gut, based decisions and datadriven decisions where the database really good in capturing what you need to make the decision go with the data because the gut will mislead you because your mind mislead outside in various ways. Your opinioner is very welltaken, that we went from a president , in obama, who was extremely aware of the limitations of his own mind. Even though he was a very smart person. He was very aware that the job of president is a decisionmaking job, and we can construct our environment so that we are less likely to make mistakes but well still make mistakes, but nevertheless we can try to guard against them a bit by encouraging input from people who might not otherwise feel comfortable speaking up. And acknowledge that whatever my first impulse might by foolish. There was whole literature on decisionmaking; obama read that it has been demonstrated the mere act of making decisions erode your able to make decisions, like going into sams club and all these decisions, after an hour you are exhausted. Give people a lot of choices and their able to make choices i corroded. So obama got erode of hislights but blue and gray suits so he depend have to decide what he would wear and tried to clean the environment to make it as likely as possible he would make good decisions. Go from that to someone who just thinks he knows everything, and who is flying by the seat of his pants all the time, and who plays on our who he does it consciously or not but as day and amos, we will long for certainty in our leaders we punish intelligent uncertainty if we dont want our president to get up and say theres only a 98 chance well get nuked or only a 75 chance the economy is going to get better. We dont want probable. We should want probablistic think erring expressing themselves clearly. But we want people to stand and say this is what wore going to do and this will happen and i know. And every comment who ever walked the earth knows this, that seeming certain anyone ever sold stocks on watt street knows what you do is seen was totally certain about the thing youre proposing, that will that will sway your audience. So, we have a president who is very happy seems very certain about things that are inharenly uncertain. That worries me. Im not supposed to be partisan but i think were in a very disturbing moment. Host well go to berkeley, california guest there we go, my home. Host curly, youre next. Caller hey. How are you guys doing . Steve, big, big fan of cspan. Mr. Lewis, big fan of your becomes and so forth. You guys have covered a lot of ground. Its been very interesting. Could go a lot of different places but i need to start in defense of the gut for just a second if could i. Guest sure. Okay. First of all, simplest one is didnt billy bean use his gut to decide that give from cleveland, who is using the numbers that everybody told him one ever going to work didnt billy bean use his gut to make that things well leave that for another time. I wanted to ask you about look, what you were saying, the cogent analysis you made about why data is better than just thinking something without challenging it, that is pretty obvious and you did a very good job of explaining that, and people i mean theres always those behavioral economics issues where you go into a class where people will end up doing a auction for a 20 bill, saw this on frontline and the guy ended up paying 22 for a 20 bill or something. The excitement of the moment is the essence of a auction situation and of making markets for that matter. I did just also want to bring up just for a second black shoals, and those guys used numbers analysis of the best kind for a long time to thus come up to a situation that led to where it was. Go with your gut in a better way. I would say in the case of higher rain a person who could do statistics, will apply Statistical Analysis to Baseball Players, its exactly that decision. We knew what kind of person he needed and there were a lot of people likely available, someone whos framing statistics and also in the role of baseball. He argued new when he was looking for a buyer. If you are going to go after me, billy dean himself, the high priest of using analytics to evaluate Baseball Players and strategies just said screw it, i think this. He did this with the player because he thought the play was either doing drugs, he was detecting and attacked the player was going to have. Really in theory would say it doesnt matter, but in fact he had a sense they did matter. Been in a leadership position of an organization, i dont think you can lay just by numbers if for no other reason they dont listen the numbers. People made the story. It is more complicated. We leave everything to an algorithm. Absolutely true i agree with that. How about we just leave it at that. Host the books by Michael Lewis, beginning with liars poker right into the wreckage on wall street 1989, the money culture 1991, pacific raised, the fault on between the u. S. And japan. Losers, the road to everyplace but the white house in 1997. The new new thing in Silicon Valley in 1999. Mats come in the future just happened in 2001. Trade ties the art of winning an unfair game followed by coach, lessons on an unfair life and blindside which came out in 2006. Your ninth book, home game, the big short inside the doomsday machine from 2010. Boomerang, travels in a new third world from 2011. Flash boys, wall street and your recent book, the undoing project, friendship that changed our minds. What was the easiest, what was the most difficult book of all of these . Liars book was the easiest because i didnt know how hard it was supposed to be. All of these books come in the character on the page and now when the character i was my material for large parts of that book. And i was unjustifiably abused by myself amused by myself. Host are you laughing . Guest i was laughing with tears coming down my face. What is the easiest. It came out at a very fast. When i think about judging my books, judge olympic dodge, and its not just the quality of the execution, and the difficulty. Trade for having is the degree of difficulty. It wasnt hard to write. The material was in my lap. I lived it. The hardest to write, after that it gets tricky, but probably the big short. Basically because you have to explain if youre on the same avenue at the financial crisis, you do have to explain the collateralized obligations and no one can explain the collateralized debt obligations. All you can do this give the reader a faster reason they understand. So the complexity of what happened, it was really difficult to read that in and not lose the reader. You had to rewrite one of them and take it at all in again. Which was the most difficult to deal . Probably the big short. Host suzanne from williamsburg, virginia. Caller thank you. A great three hours almost. Host you havent been watching for three hours. Caller its pretty hard to believe. I started my Michael Lewis journey with liars poker. I had to watch the whole thing. Anyway, the reason im calling as i have a little story i thought you might enjoy. I was living in manhattan in the early 80s and my roommate at the time with longterm Capital Management. Well management. Well before it was longterm Capital Management, well before the infamous that you wrote about. While my roommate was cooking dinner, john and i used to sit in the living room and plate numbers games. Wii is to try to figure out the least amount of gases we could figure out the number that was the nature each others heads. In hindsight i also wonder whether that was the very beginning of johns rise and downfall is that simple game in the living room. It truly was a betting culture. I would love to hear more about that. Do you think people are born that way or is it just something they acquired my they acquired by acquaintance or whatever . Lewis thank you. Thats funny. John mayweather was my boss. I worked for the failed line of his desk and his desk was of historic interest because what they did. They were the trading arm and if youve gone back a decade earlier, another partnerships that had this kind of operation in moscow. They were making these enormous debts but the firm money. It is so great they 19891990, more than 100 of the firms profits were coming from seven or eight people overseen a John Meriwether. In 8000 person firm. They are making it at. So the whole enterprise ended up organizing itself around John Meriwethers status and made that it was making. These were huge gambles. It was true that he was gambling in the beginning in the marketplace. The marketplace in the 80s got much more complicated. Options and futures are traded everywhere. There were lots of actual mispricing the securities and people who are smart but the numbers and in response to your question about a city gambling culture, it was very much a gambling culture and it felt like when you walk towards the Trading Floor that you were in the place a bit like people who are predisposed to alcoholism in a bar. People who are predisposed to gambling addiction are actually attract you to that place and it was just kind of encouraged. In defense of the place, pretty shrewd about establishing the smart gamblers from the gamblers and giving the money to the smart gamblers to play with. But you didnt do what John Meriwether did for a living unless you really like to gamble. Most people couldnt deal with the debts they made. In the end, he was so successful that he becomes almost too big for his own firm and they go and create longterm Capital Management in a make debts that almost bring down the Global Financial system. But you only get to that place if youre unbelievably successful for a long time. Host [inaudible] blindside guest Sandra Bullock captures so well that one mans has been saw the movie for the first time he went gasp, thats exactly what he said, my god, i could just handle one. There were two of them. It was shocking to me. It was like seeing one of my characters end up on the screen. I was even more impressed than i maybe should have even been. I saw that brad pitt captures billy beane and all kinds of interesting ways. Christian bale captures Michael Berry in all kinds of interesting ways. Steve correll captures Steve Eiseman in all kinds and the imitation, the impressions they do back up and say the movie business seems like kind of a nonsense business, hollywood, celebrity, but in los angeles, there is a trade and a craftsman with unbelievable skill and talent in these actors and directors and writers are so talented that you cant quite believe it when you see it. I love Sandra Bullock. She is just the best i think and she did an unbelievable job, but the actor who scared me the most with his power was Christian Bale. He scared me because Michael Berry who he has asked for her syndrome. He has no connection and socially to the outside world. He is the first to really see what is going on in the subprime Mortgage Network and the only one who has an argument about when the market is going to turn in why. It is based on having studied the loans that were made that shouldnt have been made. Anyway comment in person hes a little quirky. Not wildly quirky, but quirky. Ive heard that Christian Bale had gone inside one day that was it. He called very politely, can i come spend a day and just be with you. Watched him, talk to him, very natural conversation. He said it was hard for me because he didnt get to go to the bathroom. He sat in my office for 12 years. I was exhausted at the end of it. He was on the screen and became Michael Berry. He is wearing the clothes that michael was very Michael Barrett swearing when i met him. And i cornered Christian Bale to say you spend one day with him. I spent a year studying this person and i could not have done an impression. You are doing all kinds of things. I dont know what it is, to get him across. How did you do that . He didnt want to talk about it. Actors like magicians dont want to tell their magic. It bothered him so much. He said okay, heres the thing. It was obvious right away. He breathes funny. I said what . When he talks, he takes a breath in odd places in a sentence. And from that, all these mannerisms emerge. And i saw that right away and it was obvious that i said to the director, and get my breathing right and if i get the breathing right Everything Else will follow. Post 12012, ucla commencemente s for a reason. I can explain it in one sentence when the entire u. S. Themselves, the party accelerate, the brutal hangover is inevitable. After the act in such a manner i found myself right in the middle of the financial meltdown prophet named for a minute because i had predict today. I had been a chicken little or a cassandra to some, especially in government one lucky sop. In truth, and i was just trying to figure it all out. Another funny thing about Michael Brady coming back to me now watching him is he trained to be a doctor. That is what he was going to be, but he was more interested in the stock market. He comes out to me and i said why the talking in the stock market. I asked myself, do i care about people . Not really. It was a really honest kind of self assessment. Like i shouldnt be a doctor if i dont care that much about people. I find him unbelievably lovable. I really love the guy. A very good person, very interesting person, has his own peculiar take on the world that happens to fit with that moment in history. But the trail of him doesnt completely capture him. But sitting on his desk, it was incredible what this guy did with it. Anyway, i dont know, this starts a Sandra Bullock. This is from 2010. We will watch and get your reaction. Actually one sunday after church we write north oxford baptist, true story and we played the day before and he runs the foot while bright and then left im thinking whats wrong with him. The short school bus picked them out. He needs to be running lap. We come out of church and here comes houston on the parking lot. Sean is like eavesdropping me. And i said. I stepped in front of the cardinal the windows down. He got are you doing today . Not really but actually coach. What the problem . Im trying to figure out, i said, my son was a preseason allamerican left tackle really talented, and really decent at football. I said you ran the ball right 50 times and left 10 times. Im not understanding this. He does well, and we can go back and watch the film because he did. I said when the ball left. [laughter] thats her. Shes the best. Very funny. So the scene in the movie where shes going and telling him what to do, shes talking about in that clip the ole miss football coach. They are Close Friends now. The funny thing, she has steve at the basketball game on the Court Premises and take it and she has seats right next to the opposing teams bench. From here to there to the opposing teams player and she spends the whole game teaching them how to behave. Dont use language like that. They are all yes, just listening to her. Now, interesting thing about movies, people realize people. When i met leanne when i regained with sean and i started to think about writing this story, she was very weary for a bunch of reasons. She didnt think anything good would come out of it. But she didnt like the idea of being on stage. She was she wasnt shy. In her own world she was a force, but she didnt have herself as a character. Shes acquired a sense of herself as a character in part of the recent Sandra Bullock shared what character she was by doing it on screen. So, i am glad no one has tried to make a movie about me because i think it would bear very hard, especially if it was done well, to go through your life is such a vivid impression of yourself having been seen by millions and not have it affect you in some way. Host we go to catherine in california. Go ahead, please. What part of the state are you from . Guest centro, margarita. Host welcome to the conversation. Caller thank you very much in thank you for cspan. Weve been watching never weakened for many years. Weve been with Michael Lewis for three hours. Caller i want to agree with sandra from santa rosa tiered first off two questions. One in which i was listening to your conversation i was struck by what you said about being a thinker and i think you are a thinker and i dont want to disturb. Im wondering if you think of yourself as the conscience of the culture, but more broadly the culture itself. I do. Again, i dont want to disturb your image, which is so creative, but obviously that is what you are and i really appreciate it. Ignore it if you think it might bother you. This might be a silly postscript to the whole thing because its a wonderful conversation. Again, i appreciate it, but in your list of authors, there are no women. I am just wondering if youre inspired by women and if you read them and if you do, why are they not on your list of inspiration or maybe its just a short list. That is my question. Ill go with an answer offline. Host thanks for watching the tv. Guest kind of an unrepresentative example in some ways. Yes, i do read books by women. When i go back to like the beginning, i dont read anybody now. This is going to sound horrible, but nobody inspires me anymore as a writer. What happened does he do this, if you do this for a long time, i think its because you spend so much time, you read so critically and i read so much more critically. Much more than when i was 20 years old. Writers cant get inside me the same way they could. The thing i like least about what i do having turned it into a career as slightly damp might interest changes my interest in reading in a way that is not all good. That list you have for me, im pretty sure are all books that got inside me when i was 20 years old. Becker west got inside me when i was 20 years old. At clambering file can. I discovered this seemingly plain style british writer. She was one just by the sheer clarity generated this power and made me think thats the way to go, as clear as possible. Dont use fancy words when a little word will do. Dont use complex sentences when a simple sentence will do. Dont disguise the fact you have nothing to say by saying it in a fancy way. Have something to say. Back in those days when i was capable of being inspired, she is on the list. Not many other people are. Though she was on the list. Anyway. Host if there is one writer in all of time that you would want to meet, who would it be . Do i get to spend some days with him . Are we going to have a dinner . Host you get to spend dinner with him. Guest i dont want to have dinner at george orwell, they may want to spend a couple weeks with him. I think it would take a while to get through to him in any meaningful way. Maybe dickens, mark twain for dinner. Mark twain i feel ive read so much about 10. He has been so combed over that i feel i might get a lot more out of dickens because it would be fresher. Host we will go to stephens indicator, it illinois. Caller i have a short Attention Span because im listening to you because i can see in your eyes youre telling the truth. I heard you earlier why you write. I think you write because the truth is like gold. It doesnt run in a straight line. It weaves and wanes. So when you find it, you have to let people know that you are a writer. I am not a writer. You discover the truth and you know the difference between truth constructed for your assumptions than the actual truth. I see it in your eyes you have the truth seeker. It is true, what you say that when you find the truth, it seems like an interesting truth. It is really energizing as a writer. However, enough by nature, maybe im proving the thinnest three hour marathon that preaching is not my style. To get back to the previous scholars point, i can hardly function as my own. And i think oddly, youre dancing with the reader, having a relationship with the reader. If the reader controls, if its going to be any good the reader has to have some control over it. You cant get them around your truth because theyll feel it. They are being told what to think about the story they are reading. All those stories have the reader walks into an exercise is discretion over. And so, the byproduct of this is the frustration if you are hoping your book to deliver a truth for a reader is often a come away with a completely different truth. They are reading it completely the way you have no idea. I see coming back to why i write and this is the pleasure i get out of doing it but i hope the reader is getting the pleasure to think the same caliber pleasure reading it as i got created. I think of myself as creating some pleasure and interest in peoples lives. I dont have that much control over whats going to happen. Host this is from elizabeth in new jersey. She wants to know how much time is spent researching, writing and how much time does Michael Lewis stange is thinking. Guest authority established that i dont think. The typical book you said, what is the pattern . Theyre not exactly the same, but roughly what happened the book will take me two years in 18 months will be gathering material in six months we will be writing. And when im writing always six, seven, eight hours a day. 18 months i will be writing character sketches, notes, ideas, organizing the structure of the thing, but not really writing. So, my writing is sporadic. When i write, i write a lot and i write very fast and i revise, revise, revise. Host how much time you spend just thinking in the process of writing in general. Guest so, in my bringing, my father used to say when i was a kid that the lewis family had a motto. He said the lewis family coat of arms in latin i just believe it. It was not true. He had me believing it until i was 22 years old. He said the lewis family motto is do as little as possible and not unwillingly for it is better to receive a slight reprimand and to perform an arduous task. I mentioned this because the idea that what im not doing or what im doing when im not writing is something difficult while thinking is a false idea. I spend a lot of my life kind of just carting around, kind of enjoying my life. And i cant say i read someplace that bill gates has two weeks where he just goes away to think when he is on microsoft. I just thought how would you do that . Three unfold daily. In 1979 cspan was created Public Service by americas Cable Television is brought to you today. Book tv is back live in austin for the second day of the texas book festival. Over the next three hours you will hear them discuss Sexual Assault on campuses. The first the professors Carol Anderson on racism in america. This is a book tv on cspan two. [indiscernible]