The One-Minute Risk Manager

By now you’ve figured out why the working title for this blog was Serious and Depressing. Once pitchers and catchers report my spirits will perk up, I promise.

In the last post I noted that when our element of uncertainty grows, we are more likely to seek protection from the powerful. On an elemental level, I totally get this. When I was riding the New York subways in the 1970s it was a relief to see a beefy transit cop step into the car.

But are the risks the socially powerful promise to protect us from so bad?

I can answer that. I’ve been in risk management at UC Berkeley for 22 years and know a thing or two about risk assessment. It isn’t hard. In fact, if you pay attention for the next minute, you might learn all you need to replace me.

The underlying premise of risk management is that the risk universe is infinite, but our loss prevention resources aren’t, so we have to choose which risks to address. The simplest tool for ranking risks is a graph like this:

The vertical axis (Likelihood) represents the frequency with which the specific risk occurs; the higher up the chart, the more often the risk occurs. The horizontal axis (Impact) measures how bad the risk is; the farther to the right on the chart, the greater the risk’s severity.

The three points in the lower left quarter of the chart (including the one above the 4) represent risks low in likelihood and impact. They’re not worth worrying about.

The point in the top left quarter (above the 2) represents a high likelihood/low impact risk. The two points in the lower right quarter (the one just above the 6, and the lower one above the 8) represent low likelihood/high impact risks. These are moderate risks that bear watching.

The two points in the upper right quarter represent high likelihood/high impact risks. These are the risks to prioritize.

Then, with whatever resources are left over, we address the moderate risks.

The authoritarian playbook calls for taking a low or moderate risk attributable to an unpopular group and treating it as a high risk. This isn’t hard. To the easily frightened, low and moderate risks presented by perceived outsiders may well have been causing anxiety for years, so when the autocrat calls them out and promises deliverance, millions of people feel the relief I did in the subway.

I could illustrate the point with any number of examples, but let’s use one of Trump’s because it’s right in front of us and easy: radical Islamic terrorism in the form of ISIS, Middle Eastern refugees, and infiltrators sneaking across our unfenced southern border.

The Centers for Disease Control report 2,626,418 American deaths in 2014, the last year for which we have full data. Here are the leading causes, which comprise 74 percent of the total:

Hmm. I’m not seeing any sort of terrorism on that list, much less radical Islamic terrorism.

The National Consortium for the Study of Terrorism and Responses to Terrorism, funded by the Department of Homeland Security and operated principally by the University of Maryland, determined that excluding Iraq and Afghanistan, which are war zones, a grand total of 32 Americans around the world died from terrorist attacks in 2014.

And in a paper released Friday, after President Trump banned refugees from seven predominantly Islamic countries, University of North Carolina-Chapel Hill sociologist Charles Kurzman notes that “There have been no fatalities in the United States caused by extremists with family backgrounds in these countries.”

So which should we be more afraid of, cancer or radical Islamic terrorism? It’s not even close. But Trump made no mention of cancer in his inauguration speech, or of any other leading cause of death for that matter — not even suicide, which is plaguing his base. He did see fit to specifically mention radical Islamic terrorism, though.

Poor risk management skills. No wonder he’s had to declare bankruptcy four times.

But in politics, fright factor counts as much, if not more, than likelihood and impact. A little about why next time.


Disclaimer (in addition to the one about how bad I am at Excel charts): this is a rudimentary risk assessment. To name just a few simplifications:

· Death is not the only measure of high impact.

· The risk sample is limited to one year (although in the case of radical Islamic terrorism, even if you included every American death from terrorism since January 1, 2001 the likelihood would remain super-low — less than one-tenth the number of suicides in 2014 alone).

· With low likelihood/high impact risks, the past is not predictive of the future.

Nonetheless, I think the conclusion is valid: a reasoned analysis of the risks facing us would rate radical Islamic terrorism a concern, but nowhere near an urgent priority.

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