The Fifth Risk

One way to describe The Fifth Risk is “as the danger a society runs when it falls into the habit of responding to long-term risks with short term solutions.”*

I am sitting on a beach in Riviera Maya, a lovely area a half an hour or so south of Cancun, Mexico.  On CNN President Trump is threatening to close the southern border.   Here his name is seldom mentioned, even by his supporters.  My beach book is The Fifth Risk by Michael Lewis.  I read his last book, The Undoing Project, on the beach shortly after it was published.  The Undoing Project was about thinking and how decisions are made.  The Fifth Risk is, in large part, about the failure and consequences of not thinking.  The book is two hundred well-researched pages detailing the failures of the Trump administration’s transition team.

Mr. Lewis focused on two key areas of the government, the Department of Energy and the Department of Commerce.  Though it is clear that he could have chosen any of the cabinet level departments, he chose two of the more apolitical areas of our government.  And arguably two of the most important.

The Department of Energy gained notoriety in 2011 when presidential candidate Rick Perry, the Governor of Texas, tried and failed to remember its name.  He was attempting to list three cabinet level departments that could be eliminated.  Of course, he didn’t know that the D.O.E. is actually in charge of our nuclear arsenal, the security of all nuclear sites (past and present), and that the Chief Science Officer of the D.O.E is the de facto Chief Science Officer of our country.  Rick Perry is now the head of the Department of Energy!  He has yet to learn the full scope of the department he leads.  By the way, the D.O.E. has an annual budget of $30,000,000,000.

Here is where the Trump administration’s willful ignorance plays a role.  If your ambition is to maximize short-term gain without regard to the long-term cost.  If you want to preserve your personal immunity to the hard problems, it’s better never to really understand those problems.  There is an upside to ignorance, and a downside to knowledge.  Knowledge makes life messier.  It makes it a bit more difficult for the person who wishes to shrink the world to a worldview.*

White House Chief of Staff / Budget Director Mick Mulvaney made the rounds on last Sunday’s talk shows.  He brushed aside his attempt to defund the Special Olympics as simply an internal discussion.  He was on TV to defend the President Trump’s decision to join the lawsuit AGAINST the Patient Protection and Affordable Care Act (Obamacare).  He unequivocally declared that people with pre-existing conditions would not lose their health insurance.  He was mute about the other benefits of the law such as the expansion of Medicaid and the elimination of policy caps that were once as low as $50,000 on some policies.  Most importantly, Mick Mulvaney, Donald Trump, and the entire Republican Party have yet to provide a path forward.  If you eliminate the law, all of the protections and all of the funding ends right there.  The guy who doesn’t give a damn about disabled children is unlikely to worry about your access to insulin.  The short-term goal is to feed the base and eliminate the “Obama” of Obamacare.  The long-term problem is beyond their focus.

The woman at the next table is vociferously complaining about paying $500 per month to be on her employer’s group health policy.  She offers to trade plans with a Canadian couple.  They laugh and politely decline.

The Texas lawsuit is winding its way through the courts.  Will Chief Justice Roberts save the day, as he did in 2015, again?  More importantly, does anyone still believe that there will be a Republican plan, at the state of federal level, if the PPACA is declared unconstitutional?

A horrific tornado plowed through the city of Elk Grove the morning of May 16, 2017.  A man from the Federal Emergency Management Agency (FEMA) toured the area with Lonnie Risenhoover, the local emergency manager.

While driving the man around Elk City, Lonnie spotted Miss Finley.  Her house was a ruin and her barn was gone: surely she was eligible for relief.  Lonnie stopped so the FEMA guy might speak with her.  “You know,” said Miss Finley, “for the last ten years I prayed for a tornado to come and take that barn.  I didn’t think it would take the house, too.”  She seemed to think her reasoning self-evident.  The FEMA guy said that he didn’t understand: Why had she been praying for a tornado to take her barn? “Every time I pull out of the driveway I’m looking at that red barn,” she said. “And every time I pull into the driveway I’m looking at the red barn.”  At which point Lonnie asked the FEMA guy if he was ready to leave.  He wasn’t.  He was still puzzled: Why did it bother the woman to look at her red barn? “That barn,” said Miss Finley, “is where my husband committed suicide ten years ago.”

And so you might have good reason to pray for a tornado, whether it comes in the shape of swirling winds, or a politician.  You imagine the thing doing the damage that you would like to see done, and no more.  It’s what you fail to imagine that kills you.*

 

DAVE

www.cunixinsurance.com

Picture – The Fun Side Of The Border – David L Cunix

* Quotes are from The Fifth Risk by Michael Lewis.

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