>> From the Library of
Congress in Washington, D.C. >> Joel Achenbach:
Hello, I'm Joel Achenbach with the Washington Post,
here with Michael Lewis. Washington Post is a
sponsor of the festival. Can you hear me? I'm hearing an echo. Can you hear me? It's all good? Okay. We just found out
that Michael is supposed to do a PowerPoint presentation,
so that's going to take us about 1/2 hour to find the
PowerPoint presentation he forgot to bring. Okay. So, but thank you for being
here, thank you to the Library of Congress, thank you
to David Rubenstein, the chairman of the festival. And we're going to have
a little chat here, just a couple of old friends, along with one million other new
acquaintances here in the Hall. So Michael and I go way back. And let's just start
out talking about, you were an art history
major at Princeton, right? And then you go off to Wall
Street and you do really, really well at Salomon Brothers. And Michael, you could
have been rich. You know, I mean, you could have
your own plane at this point. And instead, you went
into the book business. Now how did that, tell
us why you did that. How did that come about? >> Michael Lewis: So you know, Joel
and I were classmates in college. It is actually just an accident
he was asked to interview me. They thought we would
be good together. They didn't know we knew each other. And this is an opportunity for Joel to express all the
resentments he feels. >> Joel Achenbach: That's right. Yes. This is actually the undoing
project of Joel and Michael. >> Michael Lewis: Yes, this
is the undoing project. Add the fact that, yes. But so, the question is
why I quit Wall Street. So I didn't know I
wanted, what I wanted to do with my life when I was in college. Unlike you, you knew you wanted
to be a journalist and writer. And when I got out, you
know, I didn't have any plan. I didn't, it didn't occur
to me, I think partly because of how I grew up. I grew up in New Orleans where nobody really did
anything for a living. So it didn't occur to
me that I would have to. And so hence our history. Right? I mean it was a place
where careers go to die. And but it was a great place
to study, and I loved it, and it did it because I loved it. When I got out, as a result, I
didn't have any kind of plan. And job on Wall Street
fell into my lap. And it was a way to make a living. But by the time I got it, I had
figured out I wanted to write. And it was a kind of
two year gap in there. >> Joel Achenbach: How
did you figure that out? What made you think? >> Michael Lewis: You
know, it was when, you had to write a senior
thesis like I did at Princeton. You had to basically write a
book to get out of Princeton. And I immersed myself in that. And I loved it like I loved
no other academic experience. And I kind of made
the jump in my mind, well this would be a good thing
to do forever, if you could. The false start I had, was I thought
it would have meant an academic career, and the thesis,
the guy who supervised me, the guy who supervises the thesis
not only told me I wasn't made for an academic career,
when I asked him, at the end of my thesis defense,
because I was feeling a little vain about the writing, what he
thought about the writing, he said, put it this way, never try
to make a living at it. And. >> Joel Achenbach: So his whole life
is now revenge against this one guy. >> Michael Lewis: Yeah,
this one guy. His name, just so you know it,
William A.P. Childs is his name. If you see that man. >> Joel Achenbach:
Yeah, where is he now? No one's heard about him. >> Michael Lewis: He
was great, actually. He was a wonderful professor. Archaeologist. So I got out, and I was,
I started to just kind of submit willy nilly
magazine pieces to magazines. I didn't know what I was doing. I didn't know anybody
who wrote for a living. It was a quick-zotic enterprise. There was a book, I don't
know if you remember that, I used a book called
the writers market. And it was about that thick, and
it had the names and addresses of all the editors in America. And for some reason,
I got it into my head that the easiest thing
I might be able to break into was in flight magazines. And so I started, I was volunteering
at the soup kitchen on the Bowery, the Bowery Missions in [inaudible], and I thought the street
people were so interesting. I started to get to know
the homeless people. And I wrote a piece about New
York homeless people and I sent it to all the in flight
magazines in America. And I remember, I got this
letter back from Delta Airlines and it said, you know, we
kind of like the piece, but you do understand what
we're in the business of doing? We're trying to get people
to go places, not flee them. And we don't publish things about homeless people
in the United States. So it took me awhile to
figure out the market. But eventually I started to
get some things in print. An editor in Washington,
basically gave me my start. The Economist in London
gave me my start. But then Michael Kinsley. >> Joel Achenbach: Michael Kinsley. >> Michael Lewis: He was
editing in The Republic. I sent him, I cold called him, I
was a graduate student in London, I said, I really want to
write for your magazine. He thought, he gave me a chance,
he published a couple of things. But then I get this
job on Wall Street, and the job on Wall
Street promises a fortune. I mean, it doesn't sound like a
fortune now, but it was, you know, it was $100,000 a year
the first year. >> Joel Achenbach: Oh my. >> Michael Lewis: But no,
you put that in today's, it's a couple hundred
thousand dollars. >> Joel Achenbach: And
you were like 25, 26? >> Michael Lewis: I was
23 when I got the job. >> Joel Achenbach: 23. >> Michael Lewis: And you just, I
just thought, this is incredible. I mean, I have to go do
this just to see what it is. But by then, I knew I wanted
to write for a living. So I have a friend who's, from my
Salomon Brother's training class, and you joke, like, I could
have been rich, but the people in my Salomon Brother's
training class pitied me. They all went and actually
got, they hit Wall Street at just the right time, to
get really, really rich. But I have a friend, he says that
when we met, the first day of class, he introduced himself and said, he
started telling me how he wanted to go into mortgage
bonds and whatever. And I said, my name's Michael
Lewis, and I'm here to write a book. And I'd already had it
in mind that I was going to write about this place. And I might have had that, at
least, in the back of my mind, and I wrote while I was there. This is a longer answer
than you want, but this is how the
book career happened. While I was there, I
started to write about, I started to write about, I started
writing, I continued to write about other things, but I started
to publish things about Wall Street. And I put a piece on the [inaudible]
in the Wall Street Journal, that had at the bottom
Michael Lewis is an associate with Salomon Brother's in London. And the piece argued that
investment bankers were overpaid. And, as I said, I was
working in London, and I came into work the next day, and the head of Salomon Brother's
Europe was sitting at my desk, and he was, happened to be a
great guy, happened to be the guy who gave me my job, and
he was ashen, and he said, do you realize what you've done? I said, yeah, I got a piece
in the Journal, it's great. And he says, no, no, no, no, he
says, we've had a crisis meeting with the board of directors
of Salomon Brothers to talk about how we're going
to deal with this piece, because it's being reprinted in all these local
newspapers around the country. And he says, we're getting calls. And I said, okay, wow, that's great. He said, no, he said, this
is a big, big problem. He said, he wasn't going to
fire me, oddly, different era. He wasn't going to fire me, yet. But he said, he kind of
sat down and he said, how are we going to
fix this problem? And I said, you tell me. He said, well, the way we could
fix it is you don't write anymore. And I said, nah, I mean,
that's not going to happen, I'm going to keep writing. And he was fond of me, he wanted
me to stay, and he said, well, what if you wrote under
a different name? And I said, instantly, came to
my mind, I said, what if I wrote under the name, Diana Bleaker,
which is my mother's maiden name. He said, perfect. No one around here will
ever think a woman is a man. They'll never make the connection. So do it, fine. So I started to just
write with abandon, including stuff I was
seeing right around me, under the name Diana Bleaker. And one day, I get home from work, and Diana Bleaker's
career is taking off. Because people wanted to read
about Wall Street in 1977, in 1987. I get home from work one day
and there's a phone call. And the actor Chevy Chase,
remember him, his dad, Ned Chase, was an editor at Simon and Schuster, very distinguished book
editor, and it's him. And he says, I found out
that you're Diana Bleaker. And he said, I think
you should write a book. You don't have to do it for me,
I'd love it if you came in here, but you should write a book. And from that moment,
that was in September of 1987, I was out the door. I knew that, I knew
that's what I wanted to do, and the money didn't matter. And then what happened
next was kind of funny, because you're not
going to have to ask. >> Joel Achenbach: No, no,
I am the pot and plant. >> Michael Lewis: Yes. Yes. Yes. >> Joel Achenbach: The carrot. >> Michael Lewis: You're the
carrot in the school play. So, the, what happened
next, was I went, I waited until they gave me my
bonus at the end of the year, because I didn't want
to just lose that. It was a huge pile of money. And then said, I'm
leaving to write a book. You know? And they said, you know,
what are you going to write about? I said, I'm going to
write about Wall Street. And I wasn't quite sure how, what
[inaudible] was going to look like. They took me into a room,
and they didn't care that I was writing a
book about Wall Street. That wasn't what concerned them. They thought I was out of my mind. They thought, they said, you
do understand that, like, you made 250 this year,
and next year's like 500, and then after that it's
millions of dollars a year. You can, you can stay
here for another decade and in 10 years you
won't have to work, and then you can write
your books, basically. And they said, don't
do this to yourself. They felt sorry for me. And, but I was so out the door,
that it didn't even occur to me that that, to listen to it. I was so enamored with the process
of, I was so amused with myself, as now, with what happened
when I sat down and wrote with a blank sheet of paper. I mean, when you're 24,
or 25, how old was I? I was 26 then. You know, it's, you kind
of go with your gut. >> Joel Achenbach: So this will not
work for everyone, this career path. [ Laughter ] But certainly, being self amused
is a good personality trait for this business. >> Michael Lewis: There's
no question. >> Joel Achenbach: I
have some props here. I have a bunch of Michael's books. And this is The Big Short,
which everyone knows this book. And. >> Michael Lewis: Thank you. >> Joel Achenbach: Tons of fans. At the end of a book is an actually, incredibly harrowing
encounter with John Gutfreund. >> Michael Lewis: Now,
may he rest in peace. >> Joel Achenbach: May he rest
in peace, your former boss. And just reading that passage, we
read it again this morning, I mean, tell us, there's a moment
where your old boss says, Liar's Poker made your
career and ruined mine. >> Michael Lewis: He put it
in slightly different terms. He said, and the reason I went to go
see him was, it seemed clear to me when I wrote that, that
that was a bookend. That I had come in, that a
lot of the forces that had led to the financial crisis, had
been set in motion while I, by Salomon Brothers, in some
cases, while I was on Wall Street. And we were watching
the end of a process that John Gutfreund had
helped put in motion. And the big one was turning these, the Wall Street partnerships
into corporations. But in any. >> Joel Achenbach: Was it
scary though, to see him? >> Michael Lewis: See
what, he was terrifying. And he booked a table for two
at his favorite restaurant around the corner from his house when I sent him a note saying
I'd love to sit down with you. He said, yes, but he didn't
say much more than that. He said meet me at that table. And I got there on
time, and he did not. And the table is one of those
tables where you sit together with your legs together,
like you're on a date. And I sat there and
I started to sweat. I thought, what is he, what is this? He sat this up so we're going
to sit like this for two hours? He walks in, and he says, first
thing he says is your fucking book, your fucking book made your
career and it ruined mine. And I said. >> Joel Achenbach: I think you
had a lovely lunch after that. >> Michael Lewis: No,
I said, that seems, that seems a misinterpretation
of history to me. That I don't think my
book ruined your career. It didn't help, but it
didn't ruin your career. And then we settled in and I'd see
him from time to time after that. And after that he was very genial. And he'd tell me, in fact, that
since Liar's Poker came out, he always kept a box of the
books under his desk to sign them for people when they
came to his office. >> Joel Achenbach: That's
a win, okay, that's a win. >> Michael Lewis: Yes. He said something like,
I'm your biggest customer. >> Joel Achenbach: So, you gave
the commencement speech, or the, at Princeton a few years
back, and you said, you know, you described yourself as lucky, and
said, some people are just lucky. And those of us who know you well,
you work incredibly hard, right? I mean, you're like
a very hard worker. You have an incredible
gift for telling a story. You write in the vernacular. And so, lucky, no, you're not lucky. But what has been your
secret, do you think, in terms of finding stories, not
only that people want to read but that no one else is, had told. I mean, The Big Short
being a classic example. We'd all been writing about
the financial crisis, you know, the Great Recession, and
you come in with something that no one else had really written. So how do you find this stuff? >> Michael Lewis: All right,
so I'll answer that question. But it's not true that
I'm not lucky. I mean, it's an incredible
serendipity in my career. The fact that I wanted to be
a writer, and I got this job in the very best place
on earth to write about Wall Street in the 1980's. I was not only in the firm,
but the place in the firm. The you know, I was, I was given
the leisure by my parents to fart around for two or three
years after college. If they hadn't done that, I doubt
I would have become a writer. I have. >> Joel Achenbach: Okay,
you had some advantages. >> Michael Lewis: Huge advantages. And the point of that
speech was, you have people, there's this odd conceit in our
culture that once you've made it, that it was inevitable
because the virtue of you. And that, in fact,
that's not how it works. Obama was right when he
said, you didn't build it. That it's, you are so, you are
such the recipient of benefits that this culture bestows on you,
and not to, and to tell the story without a high level awareness
of that, that's what I was trying to get across to these Princeton
kids, because it's getting harder and harder to see how lucky you are. Anyway, so the story is. >> Joel Achenbach: Okay. I think we left the question. So yes, you had a lot of advantages
and you had the freedom to kind of look around and improvise. But you know, you also found these
stories that no one else saw. The classic on, I think,
is The Blind Side. Tell us about how you, a friend
of yours told you such and such, and suddenly you've
got an incredible book that becomes a movie. >> Michael Lewis: So The Blind Side. It is typical of how I find
stories, in that you'll see that it's just I chance
into stories. Big Short is slightly different. But The Blind Side, what happened,
it started with a bottle of wine and a New York Times Magazine
editor named Jerry Mazaratti. And we were sitting in New York,
and I remember the restaurant, and he says, we're trying to decide
what I'm going to write next, cover story for the New
York Times magazine. And it was whatever it was,
2005 or 4, or around there. And he was thinking, you
know, important people. He was thinking Jamie Diamond. He was thinking, never
really interested me. And I said, you know, if you want me
to write about something important, let me write about the
teacher who changed my life. I mean, nobody knows who he is. Put him on the cover of the
New York Times magazine. And he happened to be my baseball
coach, but he was a teacher. And so he said, okay, go do it. And while I was doing that, I
thought, well, I'm going to write about this, this personal story
about this coach, I've got to talk to some of the people on my team. I was the pitcher on the team. Sean Tuohy, who's played
by Tim McGraw in the movie, The Blind Side, was the catcher. So I went to see him, and I
hadn't seen him since high school. And he picks me up at the Memphis
airport, he being this poor boy, I mean, in high school he
sometimes had not had enough to eat. He made great good of himself. He was a wonderful athlete. He was drafted. Played in the NBA. He was drafted by the
Cincinnati Reds in high school. And he'd gone on to make a
fortune in the fast food business. He wanted to show me his mansion. He took me to his mansion. And we spoke for two hours
or so about our old coach. And the whole time, in his living
room, there was 6 foot 5 inch, 350 pound black kid
who didn't say a word and who was not introduced to me. He was like you were
when I was monologuing. He was the carrot in
the school play. And on the way back to the airport,
I said, Sean, who was the black kid? And he said, oh, that's Leigh
Anne's project, her new project. And he started to get
a little teary. He said, we saw him, he was standing
on the bus stop in the snow, in a t-shirt and shorts, and
she recognized him as somebody who had just come to the kid's
school, and she stopped and said, what are you doing out there in
shorts and a t-shirt and she put him in the car and she drove him
home, and he hasn't left. And it turned out that
he had no family, he was living on the streets,
nothing to eat, was illiterate. And Leigh Anne Tuohy, rich, white,
evangelical Republican living on the outskirts of a very
racially divided city said, I'm going to fix him and I'm
going to make him a rich, white, evangelical Christian. And that's when she, and
Sean was just amused by it. He's just, don't get in her way. She's going to do it,
she's going to do it. And I just started following,
that's, and I though, that's odd, it's Pygmalion, it's
Pygmalion in Memphis. And I thought, I'll
just follow that. So, can I finish how the book comes
about, because that's not a book. I just thought, that's interesting. Curious thing. And I just want to know more. Flash forward a few weeks. Money Ball had come out
not that long before. I got to be friends with the
brain trusts, such as they were, in several NFL front offices. Some of them actually
were brain trusts, some of them you wouldn't
trust their brains. But the brain trust at
the 49ers was great. And he and I started to have a money
ball conversation about football. And he said, you know,
there's not a money ball story in football that's the same story, because everybody has basically
the same amount of money to spend. So there aren't the rich
teams and the poor teams. It's not about thinking
how to do more with less. Because what it is about
is figuring out how to distribute your
money across the field. And I say, well, can you get me
a history of how that's happened since free agency created a market? And he pulled it out. And it was really remarkable
that you had this character on the offensive line,
the left tackle, who protected the quarterback's
blind side, whose salary had gone from the lowest paid on the
field, lonely yellow lineman that no one knew, to the second
highest after the quarterback, because he was the insurance
policy on the most valuable asset. Because if the quarterback
got hit from that side, he'd get hurt in a way
that he wouldn't normally. And I thought, huh,
that's interesting. Flash forward 6 or 8 months. I'd been hearing about
Michael Oher down in Memphis and the stories are
getting rich and emotional. But it's not my story, it's my
old high school friend doing something odd. And Sean calls me and he
says, you're not going to believe what just happened. There was a lot of that. He'd call and say, you're not going
to believe what just happened. Nick Saban, Nick Saban, Alabama. >> Joel Achenbach:
Alabama head coach. >> Michael Lewis: But he was then, LSU head coach, came
through his school. He was looking at some players
in our school, and he saw Michael on the basketball court,
and Sean knew that, and he said, Sean, who is that kid? That's a future NFL left tackle. You can see just by the way he
moves, he's an NFL left tackle. And I said, Sean, do you
know what they get paid? And he said, no, he just
said that's what he was. And I told him the story
about, the NFL financial story. And then I started to think,
well, there's a story here. And the story is, because
the kid then went, the moment he was identified
as the future NFL left tackle, which he indeed became, he
went from, he went to be, he was like the most
prized kid in the universe. He'd gone from the least
valued 15 year old on earth, to the most valued 17
year old in a flash. And I thought, there's a story that
can be organized along these lines? What are the forces in this kids
life that changed his value? And one of those forces is stuff
that happened in NFL strategy. But one of those forces is a mother. And once I realized
that, I had a story. And this always happens. I had it for 6 months before
I had the nerve to say, yeah, I'm going to write it. Because I thought, I often
think there's someone better to write this, someone
who actually has empathy, or someone who actually knows
emotions, or someone who knows about psychology, or someone who
knows, there's always someone, there's some part of the story
where I think, it's alien to me, so I really shouldn't
be the one to do it. But the truth is, the
fact that it's alien to you is why you should do it,
because it enables you to get across to other people to
whom it's alien the stuff about it that's interesting. So what pushed me over the edge,
was Sean came out, he was the, he was a commentator for the
Memphis Grizzlies and he came out, they were playing the
Warriors, and we went to dinner, and he started telling my wife and
I some of the stories, you know. The one he, so he mentioned
to my wife and said to me was, it was interesting when Michael came
into the house, because we took him into a room and Leigh Anne showed
him his bed, and he just stared at it, and she said what? And he says, I've never had a bed. He was 15 years old
and never had a bed. And my wife started crying,
and then she got in the car, and she said afterwards,
you're an idiot if you do anything
but write this book. And so, I started to write the book. But that, it sounds like
a one off kind of thing. But that's happened to me in various
forms over and over and over. >> Joel Achenbach: You have a
common theme of unrecognized value in several of your books. I mean, is that a conscious thing
you shoot for, think to yourself, every business person in
America is going to buy my book at the airport for the next flight. Because what it's sort of saying
is, you know, with Money Ball, The Blind Side, The
Big Short is, you know, and really with the new
book, The Undoing Project, think differently about this. There's value out there
if you can recognize it. Is that a conscious theme you have? >> Michael Lewis: No. It is a theme, what is, what
does seem to happen a lot, and I don't quite know why, I
mean, I can guess why, I mean, the books do come back
to markets a lot, and the way markets
don't function very well. Markets are miraculous in a
lot of ways, but so value comes from market, the value
that the market assigns. So a lot of the stories do kind
of have a market angle to them. I think I've always been,
since I left New Orleans, always been bemused by
what gets valued and why. Because I left, because
I came from a place that was a very charming
place to grow up. It was a really rich,
interesting childhood. I loved it and I love the people, I
love the culture, I love the people, I love the place, and
it was a fail place. It was not valued. And so the fact that they're
all, you see this over and over, people who are special who
don't get valued properly. And there are people who
are distinctly not special who get valued very highly. And that, so that has
always interested me, since I was a little kid,
really interested me. My father, my father told me, no
that long ago, he introduced me to the stock market, which
I never had an interest and still don't have
much of an interest. And he's obsessed with it, like
he likes to watch his portfolio. Just watch it. And I don't get it. I don't get that, right? But, so he's watching his
portfolio and he's saying, I'm going to give you, I'm
giving you 10 shares of a stock so you can learn how to
watch it, too, you know? And I was 13 or 14 years old. And he gave me a little black
book in which to keep the record of what I saw when
I was watching it. And he gave me 10 shares
of Char House, which was a restaurant company. And I think there was some,
he gave it to me because I, it's a New Orleans restaurant
that was owned by Char House. And I looked at it. It was $20 a share,
but he paid $220. And I said, well, it's 10 shares
and it's $20 a share, so it's $200, what's the other 20 bucks. And he said, well that's
what we had to pay to Sandy Villary [assumed
spelling] to buy the stock. And I said, I'm going to go egg
his house, that's outrageous. And it's just outrageous. He charges 20 bucks
for us to go buy, what does he do, just
makes a phone call. How did that happen? And I remember being
outraged at the value assigned to that role, even back then. >> Joel Achenbach: And then you
invented online trading, right? So we should talk, just as a
novelty, about your new book. [ Laughter ] The Undoing Project. >> Michael Lewis: You
know it's, yeah. >> Joel Achenbach: So tell
us how you got into that. It's a little bit different
from your other books. It's more about psychology,
it's a little more academic. Is it really fundamentally
a friendship book? It's about friends. >> Michael Lewis: I
think it's a love story. >> Joel Achenbach: Love story. >> Michael Lewis: When, it
actually sold, yeah, love story, he's thinking bullshit,
but it is a love story. When I was finished with it, and
it was being sold for a movie, the Hollywood reported called me and asked me what's the one line
elevator pitch for this book. Like, new, it's about these two
academics sitting in a room, dreaming up ideas about
how the human mind works. How do you turn that into
a movie kind of thing? He's saying, what's your pitch? And I said, well, it's
Brokeback Mountain, but they fuck each other ideas. And that's how I think of this book. That's what it is. And it were, and that's what it is. >> Joel Achenbach: we can
delete that line somehow, right? >> Michael Lewis: Nobody, it's
just us here, it's just us friends. It's just us friends here, Joel. >> Joel Achenbach: Okay. >> Michael Lewis: Nobody will
be offended by that word. >> Joel Achenbach: Okay. >> Michael Lewis: And
the, so what happened was, the way this story came about, it's
about two Israeli psychologists, Amos Tversky and Danny Kahneman. I don't know about you when
you're working on a book, I don't like to talk about
it when I'm working on it. It's amazing how quickly my
books can be described in a way that people don't want to
know anything more about them. Really. So Money Ball,
what are you working on? A book about baseball statistics. No one asks another question. But if you want to stop a
room cold, if you want to just like stop a dinner party,
what you working on? It's a book about two
Israeli psychologists. That just stops it. Nobody wants to know any more. But that's what this book is about,
Amos Tversky and Danny Kahneman. And the way it came about was
it grew out of Money Ball. Money Ball, a book about
misvaluation of people, who happened to be baseball
players, but it's very interesting that baseball players get
misvalued the way they did. And they got misvalued by people
making intuitive judgments about their value. And I thought that was what
the story of the book was. The book comes out, and it
gets reviewed by Cass Sunstein and Richard Thaler, a
distinguished legal scholar and behavior economist. And they say, in The New
Republic, and they say, nice story, but Mr. Lewis has missed the
point of his own story, basically. That these, what he's told is
a kind of, is a case study. He's given us a case study in the
ways the human mind leads us astray when it is operating from the
gut, you know, human intuition. And the ways in which the human
mind leads us astray were mapped by these two Israeli
psychologists, Amost Tversky and Danny Kahneman,
in the late 70's. And I went, oh shit,
I missed the story. I didn't know. I'd never heard of. >> Joel Achenbach: Just like when
your thesis adviser said don't be a writer. >> Michael Lewis: Right. >> Joel Achenbach: You get one bad
review, or a questionable review in the New Republic, you
write an entirely new book. >> Michael Lewis: Well, so it
was more complicated than that, obviously, that, but that,
I'd never heard of these guys, even though the year
Money Ball was written, Kahneman won the Nobel
Prize in economics. And he didn't even
know any economics. And that's impressive. But he, so he, I just, it bothered
me that I missed this trick. But it's a great, I
like to think, you know, people say that an explanation
is where the mind comes to rest. And the books are explanations. And where you do, what you
do with your story is kind of where your mind came to rest. And I like to think I've kind
of exhausted the material. I've mined out the material. That no one else can come behind
me in my material and do it, find something really
great that I didn't find. But this was something really
great that didn't even occur to me, that there's something, they
were wired in certain ways and people had actually
figured out how we're wired that explains the whole
Money Ball story. It just bothered me, for
years I thought about it. I mean, not constantly, not the way
my father watched the stock market, but just every now and then
I'd think, and I mentioned it to a psychologist friend, and he
said, in Berkeley, where I live, and he said, Danny Kahneman
lives 1/2 a mile from your house, you can go talk to him about
this, get it off your chest. So that's what I did. I went and knocked on his door,
and we developed a relationship. We've gone on long walks
through the hills in Berkeley. And he would talk about his
now dead colleague, his lover, it wasn't his physical lover,
but in every other way, they were just passionately
involved with each other, and tumultuously involved
with each other, Amos Tversky. And then I thought, I'm don't
know when this penny dropped, I taught for a term,
taught's a strong term, but it was called a class, at Cal. I was supposed to teach
writing, which you don't, I mean, I didn't do a very good job at it. But the, but one of my favorite
students was a kid named Oron Tversky. And it turns out he
was Amos' oldest son. And very quickly I saw I had access
to both sides of this collaboration. And the material just
got, I kept thinking, I'm not the one to write this. This is really interesting,
but I don't know. I'm not Jewish. This story takes place
in Israel, a lot of it. That's the back drop, is the birth of the Israeli state
and early Israel. I have no, I didn't
even take psych 101. I have no, and no particular
interest in psychology, up to that point. So it was all alien. So it took me forever to
talk myself into a place where I thought I should
be the one to do it. And what caused me to, what
led me to this point, what, 8 years after I first
started walking in the hills with Danny Kahneman,
is that the people who knew the story
were starting to die. And it was getting clear that if I
didn't tell it, it would be gone, that it just wouldn't be. And I saw how, I thought, I think
it's an incredibly important story. I think their work is
incredibly important. It's for the ages. And it's a very emotional
story between these two men. So I know it was an unusual story. So, at that point, I turned
to Danny Kahneman and said, it's going to seem odd to you, because you know I
don't know anything, but I want to write
a book about this. And he kind of hemmed and hawed,
and he didn't like the idea of it. And so I made a case. I said, you guys, your
work is too important. Someone's got to write a book
about it, and it's probably, in your view, going
to be a bad book. And if anyone should have the right
to write a bad book about you, it should be me, because I've
spent all these years walking through the hills with you. And so that's how it started. >> Joel Achenbach: But he, himself,
wrote a book, or did you ghost write that book for him,
Thinking Fast and Slow? I mean, because at the
very end of the book, you mention that you
saw some early chapters of that book, it became
a best seller. >> Michael Lewis: I saw it on
its way to the garbage can. He was, when I met him, among the
first things out of his mouth was, you come at a good time, because
I've just decided, they've asked me to write this book and it's
such garbage it's going to ruin my reputation so
I'm not, it's going to go in the garbage can where it belongs. And I said, could I
see a chapter or two? And he gave me a chapter
or two, and I'm, don't throw this in the garbage can. And he, I watched him, I mean, this
is, the quality in Danny Kahneman that is peculiar, that he has
to a degree I've never seen in any other human being, is doubt. Doubt about everything around
him, including his own thoughts. And he would, he's
like constantly chewing up what he creates before
it ever gets out the door. So he got to a point, after
throwing it away and pulling it out of the garbage can, and
throwing it away and pulling it out of the garbage can four
or five times, where he said, I know what we're going to do. Because he didn't trust my
judgment in the manuscript, he said, I'm going to give money to a
friend of mine who's a specialist in my field, and have him
distribute this money in thirds to three people he likes, but he's
not going to tell me who they are, and their job is to trash the book,
to write a negative review for me so I can see how bad it is. >> Joel Achenbach: Kahneman's book. >> Michael Lewis: His own book. >> Joel Achenbach: Yeah. >> Michael Lewis: He was, he
paid $5,000 for shitty reviews of his own book to talk
him out of publishing it. So this is a peculiar character. That's what you're looking for. >> Joel Achenbach: Genius. >> Michael Lewis: Even
better, he thinks he's normal. So the best characters,
you know this, the best characters don't
know they're characters. The minute someone knows
they're a character, they lose altitude on the page. And he just like, he soared
the whole way through. That he, he was just
a different person, and he had a lot of
different thoughts. And he would never
have had the thoughts if he'd not had this love
affair with Amos Tversky. So, anyway, that, the, it
was a long, torturous path to writing a book, because it
was even more off my beaten track than usual. >> Joel Achenbach: Right. >> Michael Lewis: Yeah. >> Joel Achenbach: So, you had a lot
of other opportunities, probably, offered to you about, you know,
writing a movie, or you know, I think, did you write a novel once? You've played around with it. And you know how these movies made
of your books, so what people want to know is what is
Brad Pitt really like? >> Michael Lewis: Do
we want to know? Do we want to know? I can tell you. Yes. So, so before we get into
the movie thing, we'll do this. I don't want to create the
impression I had anything to do with the movies. I think they're great. But the apropos of this
gathering, that the people in Hollywood really prefer
that authors be dead. Because all the living
author does is cause trouble. He wants credit, he wants to criticize you taking his precious
work of art and screwing it up, he wants to tell you who
to cast in the picture, he wants to hang around with you. They just don't like you live. And so, they convey this. The other odd thing
about Hollywood is that they are fastidiously polite, that everybody's almost challenging
each other to be the first one to be rude when you're
in a conversation in Los Angeles in the
movie business. Like everybody's showing off
how gracious they can be, even while they're sticking
a knife in your back. And it's a, it's not like
Wall Street that way. And the, so. [ Laughter ] What evolves between a living author
who maintains a good relationship with the movie business, is this, they pretend to be interested
in what you have to say. And you pretend to
believe they're interested. And as long as no one thinks
there's anything genuine there, the relationship, it
can be quite lovely. >> Joel Achenbach: Okay. >> Michael Lewis: So that's
what happened with Brad Pitt. And the relationship
was quite lovely. I don't know if we're going
to ever be together again. I hope we are. But I'll tell you a story that
encapsulates a part of Brad Pitt. When you meet him, you're
supposed to think he must be dumb because he's so beautiful. But he's not dumb. He's very smart. He's very interested in things. He's a delight to talk to. He's easy. He's surprisingly, shockingly normal
without being completely normal. But this is the Brad Pitt story. Billy Beane, who Brad Pitt
played, wanted nothing to do with this movie, to the point
where he refused to go to the set. When they said they were
going to make the movie, after I told them he could sell
his life writes without any fear of them ever making the movie,
because they were never going to make a movie about
baseball statistics that would be offering money. Billy Beane called me up
and he said, you bastard. He was angry. He said, Brad Pitt just called,
and he's coming to my house, and my wife is putting on makeup. [ Laughter ] And the babysitter
is wearing a dress. You bastard. Boom. So in the middle of making
movie, the movie people who want you to engage in this false
relationship where you pretend to believe they care what you think,
were getting very uncomfortable that Billy Beane wasn't
playing the game. He wasn't coming to the set. He wasn't returning the phone calls. He didn't want anything
to do with it. They were filming in his office. I mean, they're filming in the
Oakland Coliseum for 3 weeks, and his office is right there,
and he would refuse to come down. So, one day, they call me,
please, everybody's upset, could you get Billy to the set. So I called Billy, and I said, just
put everyone out of their misery. Come down for 10 minutes. Nothing bad will happen. Just say hi, smile, be
charming, you can leave. And he said, you promise
you'll be there? And I said, yeah, I'll be there
[inaudible] hold his hand. And so I drive out to the set. Did you see the movie? There's night scenes in the
Coliseum where they recreated a game between the Oakland A's
and the Kansas City Royals, and they had all these body
doubles, 8,000 people in the seats that they'd move around the
stadium and make it look full. I'd go out with my daughter,
Dixie, who's then, I don't know, 9 years old or 10 years old,
they just finished shooting one of these scenes where Brad Pitt is
moodily walking around in the field with nobody in the stands. He comes over, because
that's the kind of guy he is, gets down on one knee and
starts talking to Dixie, and I leave them alone
for 10 minutes. 10 minutes later, Billy
Beane's coming out one door, and Dixie's around my leg. And I look down, and she's got
this look of terror in her eyes and she goes, who is
that weird, old guy? [ Laughter ] And in walks Billy Beane. Billy comes over. Brad Pitt's vanished. A production assistant with the
headgear, and a, he's got a folder with a book in it, comes running
over and he says, Mr. Beane, Mr. Beane, thank you
for coming to the set. We've been waiting
for you all this time. He says, you're my hero. You're book changed my life. Billy looks at me and
he says, it's his book. And I said, I said, yes, my book. He says, no, no, the guy refuses,
he says, no it was your book, Mr. Beane, it changed
my life, your book, and would you just
please sign my book. And he berates him, right,
all right, I'll sign the book. So there were two Billy Beane's
in professional baseball. They played in the same outfields,
on the Twins and the Tigers. One spelled it with an e on
the end, and one without. The other Billy Bean came out
of the closet and wrote a book about coming out of the closet. It was like, it was, Playing for
the Other Team, something like that, maybe, From the Other Side of the
Plate, I don't know what it was, but it was that kind of titles. And the young man flips
open the book, and it's the gay Billy
Bean's memoir. And Billy Beane's, he's like, there's no right answer
at that point, right? >> Joel Achenbach: Awkward. >> Michael Lewis: And
over in the dugout, Brad Pitt is rolling
around, laughing. Because he has set the whole
thing up as a practical joke, and that was the only
reason he wanted Billy Beane to come to the movie. So that's Brad Pitt. >> Joel Achenbach: That's
the Brad Pitt story. >> Michael Lewis: That's
the Brad Pitt story. >> Joel Achenbach: Yes. I'm glad I asked. Okay. [ Applause ] So we have microphones. We're going to do questions. So come up and ask a question. I ask, just don't make a speech
about how much you love Michael, we know how much you love him. Just. >> Michael Lewis: But that's
better than the reverse. >> Joel Achenbach: So, I think
there's microphones, there you go. Come ask a question. >> Michael Lewis: Are the all up
here, or there's some in the back? >> All right. I guess I'll start. >> Joel Achenbach: Yes, sir. >> So, I've read several
of your books, and it's, it seems to me you have a
fairly consistent technique where you very strongly
personalize sort of a theme. So you're writing about the
emergence of the left tackle as an important player in
football, and the restructuring of the economics of the game, and so you really drill
down on Michael Oher. You're writing about the economics
of baseball, it's Billy Beane. With The Big Short, you have
a couple of main characters, but still very strongly
personalizing these larger themes. Clearly there are advantages
to that, in terms of narrative strength,
talk a little bit about the pluses and also about the
minuses of that approach. >> Michael Lewis: Of
writing through people? I don't know any other way to do it. What I have found from the
very beginning of my career, with Liar's Poker, where
I was the main character, I found myself very
easy to sympathize with. [ Laughter ] >> Joel Achenbach: It's a gift. >> Michael Lewis: It was a gift. It was. You know, I felt
everything that character felt, and approved of almost
everything that he did and said. He was very quotable. So the trick, such as
it is, it's a trick and it's also just how I
naturally get interested in things. I get interested through
characters, through people. And what almost all the
books have in common, aside maybe from Market
Angle, is their characters, interesting characters to me
in interesting situations. So what I, the trick is if you can
attach the reader to the character at the beginning of the book, they'll follow that
character anywhere. Trust me that there is no
one in America who would want to read my description of
collateralized debt obligations. But once you realize that the lives
of these people who you've come to know, turn on knowing what
that is, you want to know. So it's a very, very powerful
device that is, you know, the origins of literature. I don't regard it, thought,
as, you say the minuses. What would be the minuses? You know, you place, I guess
you could argue that you're kind of placing undue emphasis on a
single person when you're dealing with big, but I don't, I never,
I usually pick my characters who deserve that emphasis. So Billy Beane deserves to be
the face of the transformation of baseball through intellect. >> Joel Achenbach:
Let's go over here. >> Michael Lewis: Anyway. >> I just wanted to
thank you for Flash Boys on Wall Street and
the effect that had. I ended up reading
that, I went to school with Ronnie Morgan,
that was a coincidence. I went up to IEX, got
involved in that whole battle. Fidelity ended up closing my
account because I kept insisting that I should be able to
directly connect to IEX. Maybe you could talk a little bit
about that, but thank you very much. >> Joel Achenbach: Yeah. Talk about Flash Boys a little bit. Is there a movie of that coming out? >> Michael Lewis: I don't,
you know, they never die, but right now it's close to dead. And the problem, the problem
was revealed in the Sony hack, remember that hack of the Sony,
there were emails back and forth about how impossible it was to
make a movie with an Asian lead. That the problem was Brad Katsuyama. They've gotten to the
point where they're nervous about making an Asian
guy a white guy. A decade ago they weren't. They would have just done that. But they don't have, I think, a well enough known Asian male
actor, which I think is crazy. But, it's crazy because the
whole point is he's an unknown in real life, so you could
echo it in the movie. You could surround him with,
you could create a person. But the Flash Boys story,
to me, is still very, very, very much alive in all of it. It's not sorted out. There is a war going on at the
heart of Wall Street, and it's, is it going to be properly
regulated? It's not. Are narrow
vested interests going to [inaudible] a regulation in a
way that essentially cause taxes to be levied on the rest of us? Right now they are. And Brad Katsuyama and these guys at IEX are the single
greatest force shining a light on the whole problem
and trying to fix it. And I think he's, he's a Canadian,
but I think he's an American hero. And I find his story very moving,
but it is, it's one of those things that didn't just, 60 Minutes
did their piece, there was a lot of screaming and yelling about it. A lot of people shouted at me
that I had got it all wrong. I don't, no one has
demonstrated to me that what they're saying
is not true. And it's shocking that the
problems haven't been repaired. So, I don't know. >> Joel Achenbach:
Gentleman over here. >> Sure, Michael, what
are you working at now? >> Michael Lewis: Well,
politics has gotten interesting. [ Laughter ] I was struck, after the
presidential election, with who got elected president,
and but it was interesting to me, and I kind of got interested since
maybe March, April, the vast, yawning gap between the effort
that Obama administration had put into the transition and the
Trump administration had put into the transition. And that they, the Obama
administration had created, inspired by Bush, Obama had
been very grateful to Bush for how much effort he had put into
handing the government over to him. And Obama had deputed 2 or
3,000 people around him, through his administration, to essentially create a short course
I how the federal government works, so that in our crazy system,
when all these people roll in who don't really know very
much about what's going on, and the department of energy, say
they can quickly get up to speed. And the day after, the assumption
was, as in past handovers, that the day after the
election there'd be 30, 40 people from the new
administration rolling into every government agency, and cramming for 70 days
until the inauguration. Because once the inauguration
happens, there's a lot of people who know a lot scattered in the four
winds that are actually forbidden by law from getting in touch
with their old agencies. So you have a very weird need
for a thorough, quick education in really a lot of
mission critical things. And Trump people literally
didn't show. So the parking spaces were empty,
the offices that were set aside for the education were empty. And these were not a, it was
non ideological briefings. I think this is, we're
going to pay a big price. This problem is a bomb with a
very long fuse, but the ignorance and mismanagement, ignorance of
and mismanagement of the government that results from this
is a big deal. But, happily, it's made the
material really interesting. I mean, Trump has electrified
the federal government. Who would want to read about the
Department of Energy a year ago? You wouldn't. But guess what? They preside over the
nuclear arsenal. And we have a guy on top
who doesn't even know that. And it's kind of incredible, right? I mean, you can't make this up. It's Hollywood comedy after
Hollywood comedy waiting to happen. So, what I'm doing right now, the
Trump administration didn't bother to get the briefings, I'm
getting the briefings. So I did this month's Vanity Fair,
there's 12,000 words where I run around the Department of Energy
and, because I didn't know, but I wasn't pretending to run it. I went and got the briefings the
Trump people didn't get to figure out what the hell this place
does, because we need to know. And I'm going to move through
the government and do it for the other departments. So that's the project that. [ Applause ] >> Joel Achenbach: Yes, sir? >> Yeah, I have a quick
question on the Undoing Project, and all of these behavioral
economics issues. You've been in Wall Street in
and out for a number of years, you know so much of Wall Street
is based on an efficient market, we make rational decisions, what
are your thoughts about the impact on that hold business as more of
yet to realize that were driven by idiosyncrasies and rationalities,
that were not as rational as so many people think we are. >> Michael Lewis: So what
do I think the impact of behavioral economics
will be on Wall Street? >> Yes. >> Michael Lewis: You know,
if we lived in a sane world, much of what Wall Street
does, it wouldn't be doing. Shortly after my father explained to
me that the guy charged me 20 bucks to buy the Char House stock,
he did also explain to me that Wall Street floats on bullshit. And it really still does. It's amazing, amazing,
in this day and age, that people will give the
kind of financial advice that they give with a straight face. People will claim to
know where things, the prices of things are going,
or have some insight into it, and actually direct
people's money on the basis of this insight, when
they have no idea. They will construct a story about
their investment career that seems to demonstrate that they predicted
things, that we're inherently, not only did they not predict them,
they were inherently unpredictable. Essentially random processes
are being construed as patterns and the patterns are
being divined by priests, and the priests get paid
a lot of money for it. That is crazy. The [inaudible] columnists would
have a lot to say about it. But the truth is that people
don't like taking responsibility for managing and making their
own financial decisions, and so they'll always pay
these priests, I think, just to get rid of the problem. They can't get in their
heads that not only is that person not an expert, there's
no such thing as the expertise. They can get in their heads, oh, he
was a bad expert, he lost my money. They can't get in their heads they
shouldn't be listening to anybody. And now, so, the damage that
the intellectual work grows out of behavioral economics
can do to Wall Street, I think that was minimal, because
Wall Street is, it's responding to a psychological deep need that
has nothing to do with reason, so you can't argue it away. So, in short, I think the
answer is very little. >> Where do you invest your money? Just curious, because,
is it in a mattress, or? >> Michael Lewis: So if, saying
you think Wall Street floats on bullshit is not saying you don't
think the American economy is an incredible miracle, and an
engine of wealth creation. The economy is wonderful. This, the American economy is one of
the great miracles of human history, and I invest in it, but I don't
invest in it under the direction of some Wall Street guru. I buy, I think there are
two smart things to do. The broad thing is, you decide
how much you want to put in the stock market, and how much
you want to put somewhere else. And then after that, how you
put it in the stock market, I either buy very low cost index
funds, so just a basket of stocks, or I give it to Warren Buffett. And I do this by buying
Birkshire Hathaway. And this is a basket of stocks
that he has, but he's got, he's the one person on the planet
whose capital has got a different value assigned to it, that he,
people pay more for his money because of his reputation. And he gets deals that
no one ever gets. So I have long lambasted him
for being in this situation, and I just gave up,
and I surrendered. And I'm so happy I surrendered. So I own a bunch of
Birkshire Hathaway stock. >> Joel Achenbach: All right. >> Hi, I wonder, approximately
what percentage or to what degree you
two, have prepared or practiced this interview
and a response? [ Laughter ] >> Michael Lewis: We were
[inaudible] to ask this question. But she asked how much
we prepared this. >> Joel Achenbach: Tomorrow
night we're in New York, the next night in Boston. >> Michael Lewis: Where
were we last night? How about Detroit. >> Joel Achenbach:
We did this before at Politics and Pros up the street. But this is a slightly larger crowd. >> Michael Lewis: We, so
I had to interview Joel on stage about his books. I don't know if you've ever actually
talked to me about my books. >> Joel Achenbach: This
is, this is fake news. Okay? I'm always asking
you about your books. >> Michael Lewis: I believe the
George Washington was the last one. He wrote a book about
George Washington. And you should all
buy it and read it. >> Joel Achenbach: We only have
a minute, a couple of minutes. Real quickly, are you still
the baseball commissioner or softball commissioner
for your daughter's league? >> Michael Lewis: I
retired a year ago, because my daughter
didn't, she outgrew me. But I ran the travel,
competitive travel softball program in the East Bay of the Bay Area. >> Joel Achenbach: So that
must have been a heady thing, the feeling of power as
the softball commissioner. >> Michael Lewis: Oh,
it was unbelievable. It was, half my life was this. Actually, it was this
fantastic social experiment. I mean, I'll do this
and we'll wrap it up, I think we've got to wrap it up. But the, so I live in
Berkeley, which is filled with all these liberal people
who don't believe in competition. [ Laughter ] And so the softball league is a
little recreational softball league. It's wonderful. The Albany Berkeley
Girls Softball League. And the rule is, if you
coach in this league, you have to lose half your games. [ Laughter ] So, if you, you go, if you go,
the perfect coach goes 500. However, someone, years ago, realized that some people
had a competitive streak and so they allowed an
organizational [inaudible] to be formed that after the league
concluded, all stars were picked. And they would go out into the wilds
of California and play Republicans. [ Laughter ] And this was always
a miserable, it was, every game was Custer's Last Stand. It was a miserable experience. These little girls would be sent off
and they'd get mutilated by these, you know, red and tooth
and claw Republicans. I took over the operation 7 years
ago, and I created liberal warriors. >> Joel Achenbach: Everyone in this room has the same
thought, this is his next book. Go ahead. >> Michael Lewis: And we went out and we really kicked
some Republican ass. And it was really great. And they earned their
respect, for the first time. So my 15 year old now,
when she was 10, her team was number
one in the country. And we got very, very good. And the way I got good was by going
outside of the culture of Berkeley and getting hard ass college women
softball players who did not want to hear, we're going to lose. Can I finish with one little,
cute little story, [inaudible]. >> Joel Achenbach: You've only lost
a small fraction of the audience. >> Michael Lewis: So when
my daughter, Dixie's team, is going like 40 and 1, my son
Walker is 7 years old, 6 years old, he's in the dugout as the bat boy. He's in the dugout as the bat boy
and he's agreed to take this job with his sister's team, only
because they're winning trophies for the first time,
and he gets a trophy. And he's got his wall filled
with these trophies now. And Walker was sitting there
with one of these coaches that I hired the one game
they were going to lose. They met a team, bad day, superior
force, they're down by runs after two innings, and he turns
to the coach and he says, Shannon, we're going to lose this game. And she flips, she starts
screaming at him, my little kid. She goes, you don't sit, if you're
going to sit in this dugout and be on this team and be the bat boy, you need to think more
positive thoughts. [ Laughter ] So Walker sits there for a minute
and thinks about it, and he says, Shannon, I'm positive we're
going to lose this game. [ Laughter ] And on that note, it
has been a pleasure. >> Joel Achenbach: Yeah, all right. Thank you for coming. Thanks everyone. [ Applause ] >> This has been a presentation
of the Library of Congress. Visit us a LOC.gov.
