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What, Me Worry? (Gwen Moritz Editor’s Note)

4 min read

I finally got around to reading Michael Lewis’ “The Fifth Risk.” I found it a less compelling read than Lewis’ “The Big Short” and “Moneyball,” perhaps because federal bureaucracy just isn’t as exciting as money and sports. And, 10 months after its publication, maybe I’m just resigned to the fact that our current president was never really interested in governing.

The fifth risk of the title refers to what Lewis identified as the scariest prospect facing our federal government: incompetent management. Or, in Lewis’ words, “What are the consequences if the people given control over our government have no idea how it works?”

He talked to bureaucrats and former bureaucrats about what the U.S. Departments of Commerce, Energy and Agriculture actually do, and that part is truly educational. He asked everyone to identify the biggest risks in their agencies. It was a variation on a question that corporate executives are often asked, “What keeps you up at night?”

Lewis got answers that fell generally into a couple of familiar categories: the unlikely worst-case scenario (like a nuclear weapons accident that the Department of Energy would have to deal with); and the inevitable problem that develops so gradually that procrastination is easy (like climate change for the Department of Agriculture).

In every case, the risk itself is compounded by incompetent, uninterested management.

Another slow-moving risk: the pending insolvency of Social Security. Lewis didn’t address this, perhaps because it is a legislative rather than bureaucratic failure. The Social Security Administration is wildly efficient at cutting checks, but actuarial tables predict that SS will take in less than it spends next year and its reserve fund will be depleted in 2036. The solution is mathematically simple — bigger premiums, skimpier benefits or some combination of the two — and Congress can be counted on to fix it only when the political risk of not doing it exceeds the political risk of doing it.

The risk of incompetent management is enormous in the federal government, and not just because the government itself is enormous. Career bureaucrats are derided as the “Deep State,” but we really do want competent people looking after nuclear waste and running the Federal Emergency Management Agency and spotting terrorist cells. I, for one — and I may be the only one — still want the Federal Reserve to be independent of the political process.

The National Oceanic & Atmospheric Administration, the biggest part of the Department of Commerce, operates the National Weather Service, which in turn provides all the data used for ever-more-accurate weather forecasts — even those packaged and sold under private-sector labels like AccuWeather and The Weather Channel.

President Trump’s nominee to head NOAA, Barry Myers, still hasn’t been confirmed. He was CEO of AccuWeather until earlier this year, and he has divested his personal ownership — but it’s still his family’s company. What happens if something like the weather is seen as a political asset rather than a public mission? That’s risky.


So what’s the biggest risk in your professional world? Surely you don’t have incompetent or uninterested managers in your organization — or do you?

Dave Maxwell, the former director of the Arkansas Department of Emergency Management, keeps trying to warn us about the risk of widespread power outages. (He’s my cousin, so I’ve seen his stash of bottled water. He thinks you should have a stash too.)

On the front page of this issue in Walmart, Guns and Money, you can read about a risk Walmart Inc. is facing. The rest of us don’t have to worry that our ubiquitous stores could become magnets for armed extremists, but any of us could be at risk of an active shooter. Do you have a plan?

Terisa Riley, the new chancellor of the University of Arkansas at Fort Smith — meet her in this week’s Executive Q&A — actually has a law enforcement background. I talked last week to the president of an Arkansas private college who said safety is often the unspoken concern of parents, even as colleges and universities persist in promoting academics.

Maybe your biggest risk is not being willing to take a risk. Last week in Will Fortune Favor the Future of News?, our Outtakes columnist Kyle Massey revisited the bold risk that Walter Hussman, owner of the Arkansas Democrat-Gazette, is taking in trying to convert readers to iPads rather than print.

An inevitability we’re all vulnerable to is a recession, and the current economic expansion is the longest since the Great Depression. Yield curve inversion or not, that’s sort of like being the oldest living person, isn’t it?

Gosh, I hope reading this won’t cause you to lose even more sleep.


Email Gwen Moritz, editor of Arkansas Business, at GMoritz@ABPG.com and follow her on Twitter at @gwenmoritz.
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