What Moneyball Teaches Us About Finding Undervalued Talent, with Author Michael Lewis

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1:51I'm very emotional about finding a value in some human being that has been undetected or unappreciated. You probably have people in your organization like that. For whatever reason, Trump got very enamored of the idea of letting Elon Musk loose and going after waste fraud and abuse. And Elon Musk didn't have any idea what he was doing. To a surprising extent, you could take people who just look kind of average, like the last guy in the draft, and turn him into a star. that is the voice of michael lewis the best-selling author behind the global hits that we all love including moneyball the big short and the undoing project i'm going to take you back to 2002 michael meets the oakland a's baseball team general manager billy bean because he hears they're doing something different and what he finds is a revolution a team ignoring gut instinct ignoring tradition and using data to outthink the system.

2:44That story became Moneyball and it actually changed how we value people in sport, business and beyond. And that's exactly where we start this conversation with the inside story of how Moneyball came to life and what it taught Michael about performance, about risk and human judgment. And from there, we move into his new book, which is out now, Who is Government? And he shares with us the unseen people that are keeping the United States running, how Trump treats the presidency like a TV show, and why Elon Musk's recent actions inside the US government may have done him real harm. I promise you this episode is a masterclass in spotting value, staying honest, and resisting the pressure to perform for the sake of it.

3:25And if you haven't yet, please hit subscribe so you never miss an episode, and it means we can bring you more incredible stories and remarkable guests. So let's get to it then. This is the tale of best-selling author Michael Lewis and the story and the meaning behind one of the most influential books ever written in sport.

3:47So what the Oakland A's were doing, what I stumbled into when I stumbled into that story, they were rethinking how to value the athletes and how to think about the strategies in the game. And they were doing it using better information, better data about the players, better analysis of the information. But it didn't strip the game of emotion. That was the mistake. You've seen the movie. You've maybe read the book. There's a lot of emotion in the book. It's coming from a different source. It's coming from, we just discovered this player nobody thinks is any good is good. That player has known their whole life at some level they were valuable and they've been undervalued, underappreciated.

4:29So I'm very emotional about finding a value in some human being that has been undetected or unappreciated, especially when it's a value that actually leads your team to success, that that person's sort of been neglected, an unsung hero. You probably have people in your organization like that. They're backstage, they're behind the camera, whatever it is, they're extremely important. Nobody's really noticing. What they're noticing is you because you're front and center all the time. And there's something really emotionally satisfying about that. So it's not that you're stripping the game of emotion.

5:02you're shifting maybe the source of emotion. It is true. Billy Bean would tell you that when he was making his best decisions, mostly he was relying entirely on data. That mostly he wasn't going to his gut. That his gut misled him. That that was one of the points of Moneyball. Your eyes mislead you. Your mind will mislead you. People make, when they're making a decision, when they're dealing with uncertainty, their minds, without the help of data, will systematically err. And all of baseball was doing this, was making systematic errors. Simple one was like, players who looked like baseball players, kind of looked the way they were supposed to look, got overvalued.

5:45And people who looked wrong, you know, if they were short and fat or whatever it was, would be undervalued. Billy Bean would mostly say that, yes, in the decision-making, he's stripping the emotions out of the decision-making, but the emotions shouldn't be in the decision-making. The emotion should be in the game, right? On the field. What happens there? What these players do? However, I would also say if you read the book closely, you'll see that Billy Bean himself violates his own principles. There comes moments where effectively what's happening is there isn't data. You just don't have good data.

6:19But the example in the book is he had a player who was having drug problems. He was introducing drugs into the clubhouse. and though his performance statistics were good, Billy's sense was this is not going to go well. He's going to infect the team with just a kind of a bad attitude. And Billy violated all his principles and said, we're getting rid of this guy. And he dumped him for next to nothing, even though the numbers said, keep him. Like he may be doing cocaine, but he's still good kind of thing. But he said, we can't have that. There was no data to tell him what the effects of this player was going to be on the team, on the club, but he smelled it and reacted to it.

7:03So I would say even in the extreme Moneyball franchises in the States, there's still room for that, or a need for that kind of decision-making because you simply don't have the data. If you had Billy Bean here, he'd be caustic on this subject about like, you don't build teams. You just find the talent, you put it together, and the team just happens kind of thing. that would be his radical view and it's an interesting view because it's so different from what sports people think but what about Michael Orr that is a story of how culture can develop a talent right and create a talent yes I'm not with Billy Bean on there I think it's more complicated I think that if you change the environment you can change the person and the Michael Orr story is you take him out of one place and put him in another and he can flourish.

7:58So the A's, the Oakland A's, were on the cutting edge of baseball when I wrote what I wrote. There was a new cutting edge that emerged about a decade later. And it was the improvement of the athletes by coaching. It was using technology, analyzing what they did in new ways and then tweaking them in ways that they maybe, that human eye would not normally have seen without the help of technology. Like the spin rate on a curve ball and baseball, but other teams, the Houston Astros were the big, big ones, but other teams got to that and the Oakland A's didn't because Billy Bean didn't think people could be changed or improved.

8:41He thought they were who they were. That was his mantra. Guys are who they are. You aren't going to change them. So you aren't going to coach them. You aren't going to develop them in a way that's helpful. The best you can do is analyze who they are better and evaluate them and trade them and accumulate them more intelligently. And making better the things you have has actually become the huge, the cutting edge of baseball. So he was wrong. How were they doing that? So with pitchers, they were wiring them up with, you know, they're like putting sensors on everything they did. And they were able to analyze if the pitcher, for example, wasn't using his back leg the way he should be using his back leg.

9:25If he was, or if he was, in some cases, they were finding that, oh, this pitcher has the ability to put, to exert a kind of spin on the ball that other pitchers can, but he's not using that pitch. That pitch would be effective. He can do this, and we can now pick up that he can do this. So then it becomes about creating an environment where they feel confident to find their own boundaries, push their limits. Both changing what they do, just the mechanics of what they do. With the hitters, it's the path of the bat through the zone. Do you, you know, could you improve? Will this particular kind of hitter be better off swinging like that or like that?

10:02From all of your time spent with people, the high achievers that you've spent time with, have you realized that they've got certain techniques that they use to get themselves to the top level? Or mindsets or behaviors? Is there something like a thread that runs through them all where you've gone, oh, that makes them a high-performance person. As opposed to they just kind of were born with the talent. Yeah, well, because I read a Harvard Business Review article that said high performers are made, not built. So you're not born a high performer. You might be born with some innate talent in the world of sport.

10:35I mean, there are limits, right? That you're not going to take a five-foot, two-inch person and turn them into an NBA star. There are limits, right? You have to have a... There's a certain baseline of talent that's sort of required. I think it is true. It's surprising. To a surprising degree, you can develop into a star without being born a star. And the reverse is also true. You can take someone who has star-like abilities and turn them into a mediocrity pretty easily. A funny way to look at this is through quarterbacks in football, that the NFL, even college football, is notoriously horrible at figuring out which players from the lower level when they move up a level are going to be any good at this yeah three years four years ago the san francisco 49ers drafted a quarterback with the very first pick of the draft like number one pick of all the picks and another quarterback with the very last pick of the draft like four number 452 the guy they picked with the first pick of the draft is no longer he's almost not in the game he's like floating around on some way on someone's sub roster.

11:43The guy they picked with the last pick of the draft just signed a 200 and something million dollar contract and he's their superstar. This happens over and over and over. And what they're missing when they fail to evaluate these people, they're looking at just their kind of like raw attributes as opposed to how those attributes interact with their environment. They fail to see that this guy from the last pick, the kind of things he could do work really well at a higher level, but they're hard to detect at a lower level. And it's like, can he throw the ball through a two-foot square window as opposed to a five-foot square window?

12:22Does he make his decision in three seconds instead of three and a half seconds? You don't even detect it because he's not required to do it at the lower level. And the guy at the top doesn't have those abilities, and it didn't matter at the lower level. He has other abilities. So it's sort of like you change the environment a little and you get different results you get different outcomes from the people um it's slightly different than like can you develop them but but to a surprising extent you could take people who just look kind of average yeah like the last guy in the draft and turn him into a star got you so it comes down to asking the right questions doesn't it for where you are rather than where they are it's the situation not the person yeah they almost think of it that way yeah We all make the mistake of basing way too much emphasis on who the person is, as opposed to the situation you're putting them in.

13:13And it's this interaction of the person and the situation where the magic and the disaster happens. Your context just matters a lot. And I wonder how far UK sport is behind the States when it comes to this kind of stuff. Because I've got a well-known friend who's well-known in football over here. I probably won't say his name, but he was on a course. He's an elite level manager. He's on a course. And he said to me, oh, then they got this stats guy on. And he was telling me about all the stats and all the numbers. And I thought to myself, just watch the fucking game. That's an elite individual operating at the highest level in English football.

13:46Right. How do you feel when you hear that story? Oh, I think it's, you could find the same thing in the States. Really? Yeah. It depends on the sport. Baseball is a poor comparison with English football. Because English football is a flow sport. It's very hard to cleanly attribute credit and blame in a flow sport. It's hard to break it down into just numbers. Baseball is a series of, it's more like cricket, right? It's a series of individual encounters. It's very easy to measure what goes on on a baseball field. So the game of baseball, because of the better analysis, has changed pretty dramatically what it looks like on the field in the last 30 years.

14:30American football, basketball, British football. You're allowed to call it soccer, don't worry. Soccer. So it's harder to do that. And the stats geeks have made fewer inroads into those sports than they have into baseball. And have you spent any time around English football to see if anyone is doing anything incredible? I won't name names, but I've made some brief incursions into a couple of the football clubs to see if there was a story there. And I don't know the sport that well. Oddly, I played it in high school for a couple of years. I only recently started to follow it a bit here. So that's a problem.

15:09I mean, just the knowledge base isn't as good as it was with baseball. Did you have any thought about what you'd like to find? Was there something where you thought, if they're doing that, then that will be amazing? At the bottom of my interest is how the people get valued. So the thing that interests me was how these players get valued. One of the things that's different between football here and football in the United States is that you can profit by trading the players. They're financial assets. Well, Real Madrid just bought Trent Alexander-Arnold from Liverpool. For how much? He went on a free contract because his contract was up.

15:44Okay. Do you know what the clause is they put in his new deal? No. One billion. Whoa, whoa, one billion what? So that's the minimum amount that they will accept an offer for him. So they put a clause in his contract So if someone comes and offers a billion, then they'll listen to the number. Right. A billion euro for an individual football player. It's amazing. I mean, so the money and the trading of the assets interested me. Yeah. I thought maybe there'd be something there. Maybe there is at some point, but it's hard because I don't live here. I'm not immersed in it. With the Oakland A's, I mean, there's a lot of luck there.

16:20We're in my backyard. I get in my car and drive over to the front office and spend all day picking their brains. And I kind of need that to figure out stories. So I'd probably have to live here to do it properly. Can we talk then about how you create great teams? Are great teams created by good systems or by having big stars? One of the interesting insights that Billy Bean had, when you look at it through his lens, you realize it's true, is that winning teams invariably have great culture and losing teams invariably don't. Sort of like when they talk about, oh, there's a problem in the clubhouse, it's not happening when the team's winning.

17:03It's happening when the team's losing. And it isn't, and people get the causal stuff wrong. And they think that, oh, it's because they're great in the clubhouse that they're winning. When in fact, they're great in the clubhouse because they're winning. And it's not that they're losing because they're bad and the team has a bad culture or whatever, or the teammates aren't getting along. They're not getting along because they're losing. When you assemble the pieces, like the talent on the field that's going to succeed, it's amazing how the culture all of a sudden gets very healthy. This is an argument for analytics.

17:38It's an argument for ignoring chemistry and just let that take care of itself. Find the pieces that win and the chemistry will take care of itself kind of thing. So are good teams made of big stars or of kind of like high-level confidence across the team? I think it depends on the sport. In baseball, you know, the hitter is only like in cricket. You can't control how often the star is at the center of the action is the problem in baseball. In basketball, a single star has a huge effect. He can shoot every time when he comes down. In baseball, a batter can only come up once every nine players. And you've spent time in so many different realms, whether it is in sport, like in NFL or in baseball, whether it's working with Barack Obama or taking an in-depth look at the way the U.S.

18:29government operates. If you're not a winning team and you want to have a great culture, how do you turn that around? One of the great things that have happened, and it'd be interesting to see if it's happened here, But one of the great changes that's happened in American sports culture since Moneyball came out is the revaluation of the relative importance of the coach on the field and the general manager who's just assembling the team. That the general manager has become relatively more and more important. certainly in baseball, but I bet in the other sports too, better and better paid relative to the coach on the field.

19:11What has happened in English football, we never would speak about anyone above a manager traditionally. Now we have what we call a director of football. Okay, there you go. And it's the same thing. Same thing's happening. The importance of that person has become more and more obvious. That person is the person who can really turn around your culture. We have in our head a billion movies where the coach comes into the locker room and changes the culture with a speech. I think in reality, what happens is the director of football or the general manager changes the culture by getting the right players on the team.

19:42It's that lever that needs to be pulled first, not the lever of the, you know, fiddling with the emotions of the players in the clubhouse, especially at the professional level. If the culture is bad, it's usually because it's not successful. And it's not successful, not because the players aren't working together in some spiritual way. It's because they've got the wrong players and that you got to change the players. And the person who changes the players is a really important character. The person who figures out which players you should have is a really important character, not what you do with the players, once you have them.

20:18I also think that there's this other thing and the Moneyball story gets at this, that the role players are often way more important than you know. They are, that people who are not at the center of attention are often much more important to the success of the organization than their compensation and the attention they're getting. Why not? Because they're doing things that are important. They're just not being paid attention to. There's not a perfect correlation between what we pay attention to and what's important. I mean, this gets us to the United States government in a funny way. The United States government, the book I've just brought out, a series of stories about people who work in jobs nobody's paying attention to.

21:02People are doing jobs that routinely save the lives of many of their fellow citizens. And people are oblivious to their existence. And so those role players are that. Those role players are people who are doing very important things and nobody's paying attention to them. Let's talk about who is government. Yep. What is the big question that book was asking? It was addressing the sort of lazy stereotype of a government worker, which has really affected American life. I don't know what it would have done in British life. but this idea that the government is sort of second rate compared to the private sector.

21:36The kind of people who go into it are kind of lazy, nine-to-fivers, passionless, all that. And what happened is during the first Trump administration, for complicated reasons, I'd gone in to write about it. And about just what the government, our government, did, Trump seemed to pose some existential risk to it. I thought, well, what is this thing doing? And the minute you lifted the lid on even the most obscure agencies of government, you know, the Department of Agriculture or the Department of Commerce, you found extraordinary characters, experts who were doing things that the world would be worse if they weren't doing them.

22:15And doing them, you know, not nine to five, but consumed by their jobs, passionate about it, very aware of their importance to the society, underpaid, could be paid a lot more in the private sector, but got a lot out of their understanding of how important their job was. And so the Who Is Government was like, it's not just by me, it's me and six other writers I picked, some of my favorite writers. It's sort of, I parachuted the writers and myself into the government and just said, find a story, knowing that the minute they got there, they would see these characters, these undervalued, these role players, these undervalued assets, and see how great the material was in them.

22:55So the goal was to sort of subvert the normal distribution of attention. Normally, who's getting attention is the president or big-time politicians, the people who are on television. They aren't the government. The people who are actually helping govern the society, doing the work of government, are unseen. They're not on camera. Nobody ever talks to them. And if they stop doing their job, we're in real trouble. And having spent time studying the previous Trump administration, when he won for another term, and in came Elon Musk and Doge happened, did you know this was going to happen? Did you predict that this was what was going to happen?

23:30I knew from the first time around that Trump didn't understand the government he was supposed to be running and had no respect for it. And I knew he had a developing hostility towards it because he regarded parts of it as having sort of kind of the legal, the justice department is having kind of like gone after him. I didn't believe Trump cared enough to let Elon Musk loose in the government to do what he's done. So I wouldn't have predicted it, but I knew it was at risk. I knew it was risk because Trump didn't care. And for whatever reason, Trump got very enamored of the idea of letting Elon Musk loose and going after waste, fraud, and abuse.

24:11And Elon Musk didn't have any idea what he was doing. If you follow the Doge tornado, if you follow everything they've done, I'm sure there's some things they've done that are probably good. There must be something, they did so much. But most of what we know about has been really bad and sort of like betrays an ignorance of how the thing works. It's not true that the government's perfect. You know, it's like there are problems, but they didn't attack the problems. In many ways, they attacked the healthiest parts of it. And that was strange to watch. Why do you think Elon Musk did it so gleefully and joyfully and was so happy to use his social media account to kind of make these people out to seem like the bad guys and girls?

24:52It's a great question because it's not obvious what his interests were. I mean, he does have an interest in not being regulated. So he, and he did go after, I mean, he did have his fingers on things that were regulating him. And it's nice not to have any rules apply to you. So you could say that, oh, that that was the extent of his interest. That's why he did it. But he went so far beyond that. He went to places that had nothing to do with his business and really disabled them. The only explanation is not a really good explanation because it obviously wasn't exactly in his narrow interest, right?

25:25His company is worth$100 billion less than it was before he went in. Everybody hates him now, whereas only half the population hated him before. You know, it has not been obviously a good thing for Elon Musk. Has anyone asked him why did you do this? Yeah. So I've tried. I sent him a note and he didn't reply. I think just watching the way he is, he got off on the attention that he loved being at the center of things. He loved being on telly. He loved getting on stages and have everybody listening to him. It's a kind of drug. I mean, he's obviously got issues with drugs and drugs aren't just things you ingest.

26:00They come in various forms and attention's a drug. Where it gets complicated is he wasn't just doing this in a vacuum. You know, there were other people in the Trump administration who were approving of what he did. And there's a streak of the Trump administration, this libertarian streak, that thinks the government just shouldn't exist. And so letting Elon Musk loosen it to destroy it is a good thing. But I don't think Elon Musk thinks that. So his own motives are the most curious. Trump's motives are not that hard to understand. Trump wants what he wants. He doesn't want a civil service that's there defending the Constitution when he wants to violate it.

26:35He wants to be able to do whatever he wants to do and is upset when anybody gets in his way or disagrees with him or tells him he can't because it's against the law. But Musk, it's puzzling. It isn't obvious. It isn't obvious it was the smart thing for him to do, to take that job and go do it. And it's very obvious, though, that what he did was not useful to the society, that he went after it in ways that whatever they actually did, it was very different from what they said they were doing. It was like they haven't eliminated a lot of expense. They haven't found corruption. To the extent they found waste, they haven't done much about it.

27:11So it wasn't that. It was something else. And the only thing he seemed to be getting out of it that seemed to excite him was everybody paying attention to him. And obviously the collateral damage of the people who, as you say, weren't earning a big salary. They now don't earn any salary at all because they lost their jobs. I just wonder how we've ended up in a position where the president of America can seemingly have so little empathy with those kinds of people. Oh, or Elon Musk. It's funny you say that because I don't think it even crosses Donald Trump's mind to feel badly for people he fires.

27:46He does it gleefully, right? I don't think he thinks, oh, we need to take care of the people we fired because it's not their fault that they ended up in these jobs we now disapprove of. And so that's the last thing anybody's talking about. Oh, we need to worry about the personal lives of these civil servants. And even I, it's not the front of mind with me. What's front of mind with me is they went in, because of the way our civil service works, the people who've been there for more than 18 months have some protections. You can't just fire them without cause. So they went in to reduce the size of civil service.

28:21They saw they couldn't fire those people. And some of those people should be fired. I mean, it's too hard to fire government workers. So every department has like a broken toy department. There's a little place where they put the people who aren't performing because it's easier to do that than it is to fire them. And that's a problem. But they didn't go after those people because they couldn't. What they did instead was fire everybody who'd only been there 18 months or less. And who is that? It's young people who've just come to government, and it's experts have been brought in to deal with a particular pressing problem, something that's a current problem.

28:55You need this expertise now. They're new people who've come to government. And those are exactly who you don't want to fire. You don't want to fire the young people who've come to government. We have trouble getting young people to work in government. And you don't want to fire the people who are relevant to the problems that are immediate. So that's what I think about what they did. Although I feel badly for the people who got fired, I feel worse for us as a society because we got rid of exactly the wrong people. There was a way to go about this that might have been useful, but they didn't go about it that way.

29:23But it also, for society, it makes it okay to treat people like shit because they go, well, look what they did. They didn't worry about that. So I can do the same to my staff and my colleagues and my friends. It just creates, again, more division in society. And then you back to your point about how you create a successful team. That's not how you create a successful team, by treating people poorly. You might be able to get away with it if you build such a force, such a successful team with the talent is so good that it almost can't fail. But it's not a smart way of doing business. People respond very badly to unfairness.

30:04Animals respond very badly to unfairness. And they respond badly both when they're on the receiving end of the unfairness, when it's unfair for them, in a bad way. And they respond badly when they're on the pleasant end of it, when they have more power, more money, more whatever than they deserve. And that is a byproduct of the Trump approach to the world, is this unfairness. If you think about Trump himself, leave Musk to one side, but Trump himself does not have a history of actually building successful teams. He has a history of bankruptcy. He has a history of a lot of divisiveness within his organization.

30:47And the teams, to the extent he's built them, they've been very small. They're his family kind of thing. So it's not obvious that Donald Trump would know how to build a successful organization. Musk is funnier because Musk has built successful organizations. I think he's done it in a really curious way. I mean, like, so he went into the government a bit the way you would go. He went into Twitter. It's sort of like, I'm going to fire everybody. I'm a rule by fear. I'm going to let everybody know that I don't need them. And if I make some mistakes, I can always bring them back. And that's true. you can do that in the private sector some because you can pay them a lot to put up with your nonsense.

31:31You can't do it in the public sector. People just leave and they're pissed off and it didn't even work at Twitter. There is a really good book or Harvard Business School case study to be done on how Musk succeeded going about life the way he goes about life. Like how on earth, in spite of the way he is, did he build Tesla? Was it in spite of or because of? Like, because he doesn't behave in the way a normally successful leader would behave. He's very different, and he treats people much worse. I wonder what that book would tell us. If I had to guess, it's that he has great strengths that have nothing to do with team building, with organization building.

32:17Those strengths are spotting of talent, Well, I guess that helps with team building, but spotting of talent and brilliant marketing, a brilliant kind of sense of product and presenting the product to the world. And that he's actually deficient in these other ways that he doesn't actually run the organization that he deputizes people to do that. And that the actual human stuff that goes on inside of a successful team are being done in his successful organizations are being done by other people. and that when he tries to do it himself, as he did at Twitter, that it's a catastrophe. If I had to guess, that would be the truth.

32:55But who knows? Is there also an argument that you can be successful by being divisive? So Donald Trump and Elon Musk have a lot of people that dislike them. Yep. But they also have a lot of people that do. Yep. And that's why you get voted into power. That's why people still buy your products. Yep. I sometimes wonder whether the smart person is the one who tries to please everyone, goes down the middle, doesn't create any waves, doesn't create any headlines, but they just try and do the right thing? Or is the smart person the one who is so far over here that they might piss off 70 % of people, but it's the 30 % that come with you on the journey that provide the value?

33:34Yeah. Maybe, maybe, maybe. I don't have an answer to that question. I don't expect you to, but I... Yes, you do. You put it to me because you thought I have something to say. I'd love you to have something to say. I have nothing to say. I mean, it's true that this has succeeded in American politics right now. Yeah. But before this, Donald Trump is not a hugely successful person. He inherited a bunch of money. People have shown that if he just invested his money that his dad gave him in the stock market, he'd be richer than he was when he got into politics. He bankrupted five companies. You know, this is not someone who, if you're looking to be a big success in business, you would emulate.

34:14now he is someone if you want to be a big success in reality television you would emulate and for whatever reason politics is right now more like reality television than it is like business I wonder whether you and him share a similar ability would that be? being a remarkable storyteller oh well he is he's very good at creating narrative it's kind of crude narrative but it's constant right he's very good at what would be the narrative equivalent of what Donald Trump does. Narrative equivalent may be something like this, that one of the tricks in telling stories is putting loaded guns in drawers.

34:52You know, you open the story with, there's a loaded gun in a drawer and you know, the reader knows, at some point that gun's coming out of the drawer and someone's going to get shot. It creates this suspense. I think Donald Trump, every morning he wakes up, he's putting some loaded gun in a drawer. I mean, when he talks to the, that he's creating the suspense, what the hell's going to happen. He's really good at that. You can't take your eyes off him because of it. The instability is a feature, not a bug. The uncertainty is a feature, not a bug. So he's very good at keeping attention. So there's a television commentator named Chris Hayes.

35:29He's on the left of center, so he's constantly hostile to the Republicans and Trump. Makes a really interesting point. He's written a book about attention. And he makes a really interesting point in this book that there's a real difference between getting attention and keeping attention, that it's very easy to get attention. You walk into the middle of a restaurant and set off a foghorn or the fire alarm, you get attention. Getting everybody in that restaurant to listen to your story for an hour and a half, very hard. I would argue that Donald Trump is really good at the first. The way he keeps attention is to keep setting off fire alarms.

36:03It's to continually get attention in a superficial way. But you see it as rallies. People leave after an hour. But you can get elected as the president of the United States. For getting attention. For just getting attention in a superficial way. And actually, when you were comparing me to Donald Trump, what I do is very different. I may be not that good at actually getting attention. I don't really set off fire alarms. But once I've got your attention, I can hold it for a longer time. Our relationship to attention is different. What's happened in our society is that you can go through your day looking for fire alarms to trigger and alarming everybody and getting attention and just moving from one to the next, one dramatic moment to the next without ever really sustaining deep interest.

36:53And it's politically successful. It's a byproduct of media, of the way the media is and the way people have. We're getting used to our media. Why? Because I do think that eventually people get tired of the fire alarm, that eventually their attention drifts. They realize that there is no fire. And that eventually the ability to sustain interest as opposed to get interest becomes the relevant thing. But, you know, I got to say this, that we're talking as if Donald Trump is this huge success, even in politics. And his poll numbers are awful. He's the least popular president at this stage of his presidency, I think, in recorded history.

37:35He's not a liked, admired president. There are 35 % of the people who are with him, or whatever it is, but it's the 65 % are not. And so he is in a perilous position. I mean, it's not obvious this is a sustainable act. And the U.S. national debt has just passed $34 trillion. In the spirit of the big short, I wonder whether this is the next one. So when the big short happened, you know, the financial crisis of 2008, if you look at how that got resolved, everywhere, your country, my country, Iceland, wherever, it wasn't that the private sector could just rescue itself. It required the government to come in.

38:15It was like the grown-up walked into the room and settled everybody down. It required the credibility of government. to stop the runs. They could walk in and say, we can assume this risk. Everybody calm down. Now, how they then did that upset lots of people. It seemed very unfair. The bankers got to keep their bonuses. They got to keep their jobs. There's disruption in the real economy. A lot of people took away the lesson that like capitalism is not for the capitalists. Everybody else gets to live by capitalism. The capitalists have their own socialist little rules. All true. But the bigger point is that the existence of a credible government was what prevented total disaster.

38:59What happens when the grown-up is no longer the grown-up? What happens when the United States government, when it walks into the room and says, everybody calm down, everybody looks at him and goes, you're the problem. What do you mean everybody calm down? We don't trust you. There's no like supranational organization that can walk in and calm everything down. And what a financial crisis looks like when there isn't a backstop is very different from what the financial crisis looked like in 2008. And I don't know exactly what that looks like, but it's odd, right? It would be a flight away from dollars, a flight away from government securities because you don't trust the government to pay it all back.

39:38A flight to, I don't know, real estate, gold, Bitcoin, whatever. But Trump is creating those conditions. like he's creating the mistrust. I mean, it's not just Trump. It's the history of us not running our finances well. But Trump is exacerbating it. And if you think about where we are as a country in the United States, if it turns out that the next great crisis and it's bigger, it's the mother of all financial crises, is the U.S. in some way not honoring its obligations, if that's the beginning of it, people will look back and say, wow, They picked the right man for the job. Like, at some deep level, the American people understood that the next step in our lives was to declare bankruptcy, was to walk away from our obligations.

40:23And they hired a guy who is, that's the thing he's really good at, at stiffing creditors. I've been watching him since he got elected the first time, waiting for signs that he might do this. sure that at some point he was going to be in an arena in Alabama and someone was going to raise, or he would raise the subject of like this money we supposedly owe people. And he would start saying things like, wait, wait, who do we owe this money to? It's like, well, the Chinese have a trillion dollars of these bonds. How do they get that money? Unfair trade. And sure enough, he started to do it. A month ago, he said something about something like, well, yeah, there's these U.S.

41:02Treasury bonds, but they aren't all the same. Some of them are owned by foreigners. Some, you know, you can see him start to flirt with, oh, we just won't pay it back. And that's going to be interesting if that becomes sort of like a louder signal coming from the White House. I mean, all kinds of things will leap into action to tell him not to do that. All the rich people won't like it. You know, that anybody who's got savings won't like it. But it's now all of a sudden a plausible scenario that the financial crisis starts rather than ends with the United States government. Remarkable. Well, let's see whether that is a story that turns out to be real and true or whether something can happen in the meantime.

41:47But what a fascinating conversation. I've really enjoyed bouncing around various books that you've written and things that you've experienced. I don't know if I've taught you anything. but it's been fun. You've taught me a great deal. Thank you very much for your time. Thank you for having me. Big thanks to Michael for his time on the show. You can get his brand new book, Who is Government? The Untold Story of Public Service. It's out now. If you enjoyed the conversation, please, before you leave, just do me one favor. Hit follow on Apple or Spotify and it means other people could discover these conversations too.

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