“We went to Miami. There are firms down there that have been doing this kind of stuff for years. Also we paid them double their usual rates.”
“Good for you. Hey—I can provide you with occupants.”
“Such a challenge! First get me more anchor cords and sleeves.”
These were what would connect the block rafts to bedrock. Bedrock in Franklin’s neighborhood turned out to be 160 feet below the canal bottom; this was bad, but not impossibly so. Another cost. The moving parts, or stretchy parts, that would extend between the deep bollards and the floating platforms were the crux of the problem, according to Franklin’s head contractor. Some of the new stretchtech came from biomimicry, tricks learned from kelp beds or limpets or human fascia, and it was wonderfully effective, but relatively new and rare, and therefore expensive.
And they had to accommodate the conventional buildings still surrounding their neighborhood. “Eventually the whole of lower Manhattan will move together like eelgrass. In the meantime, we’ll need clearances and leeways and bumpers.”
“What about the demolition?”
“It’s going well. Vlade’s friend Idelba is part of that team; she’s dredging the bottom to get things clear before they caisson it and drill to bedrock. She’s doing us a favor, because every dredge in this harbor is going full tilt right now, and she wants to get back to Coney Island. But this is a pretty small job by her standards, and she’s willing to fit it in.”
“Good to hear.”
“Have you eaten yet?”
“No, I mean I slurped up some of the dregs, but not really. Oh God, it’s ten already.”
“Let’s go out and grab a bite.”
“Okay.”
While gobbling down a quick meal in the deli occupying the prow of the Flatiron, Charlotte asked Franklin what he thought of the situation in finance.
Franklin waggled a hand as he swallowed and then said, “It’s all happening. They’re freaking out. All of them are leveraged out over the abyss, and their pole vaults are cracking. They’re still trying to stave it off, so it’s a bit slow-motion compared to some bubble pops, but the full-on crash is starting.”
“When though?”
“It depends on how long they try to pretend things are okay. The people most exposed are still running around looking for ways out, so they want things to look okay for as long as possible.”
“So maybe it’s time for me to go to my Fed Ex again?”
“If you think he needs encouraging.”
“I think he probably does.”
“Then you definitely should.”
At that point they were interrupted by a roving troupe of players who were performing a bluegrass version of The Pirates of Penzance, played on banjo and fiddle and concertina and kazoo, and sung so beautifully, and loudly, with the back of the banjo right there in their faces, that they could only sit back and enjoy.
Falling asleep that night, Charlotte thought over their conversation, and in the morning she sent Larry a message.
Coffee? Dinner?
You’re kidding, right?
No. You’ve got to eat, and so do I.
I’m in D.C.
I bet you are. End of world yet?
Close.
Coming up here soon therefore?
True.
And must eat, even as world ends.
True.
Dinner? Breakfast?
Dinner. Tuesday.
So she was getting ready to go to dinner with Larry on Tuesday, cutting short any number of other critical items on her to-do list, when Gen Octaviasdottir pinged her.
“You know the people who had Mutt and Jeff kidnapped?” Gen said from Charlotte’s wrist. “The security firm we think was involved with that? It looked like they worked for Henry Vinson, like I told you. And that made sense, given everything we knew. We’ve had all those people under surveillance. But on the night of the tower riot, I got talking to a man who worked for that firm, and he told me some stuff, and I’ve had my assistant checking out what he told me. And it looks to be true. Pinscher Pinkerton worked for Vinson, but Rapid Noncompliance Abatement came into the picture later. And RNA’s head guy, Escher, has been working for Larry Jackman.”
“Whoa.” Charlotte tried to comprehend. “What does that mean?” Then it hit her. “Fuck! You mean Larry’s been the asshole behind all this?” A sudden fury at him made the world go red, yet another physiological reaction common to all. She saw red!
“Well, but it’s more complicated than that,” Gen told her as her vision came back. “Come on down to the common room and I’ll explain it to you in person.”
“Okay sure. I’ve got to leave soon, but it’s to go see Larry Jackman. So I need to hear this!”
“You most definitely do.”
There was a little restaurant in Soho where they used to go in the old days. Charlotte thought it was a little strange Larry had suggested it, but she liked the food and didn’t want to be muddying the waters with any countersuggestions, given how busy he must be. The waters were going to get muddy enough as it was.
It was a tiny place, a kind of interspace between two buildings that had been captured as another set of rooms, maybe in the nineteenth century. Behind the long bar was a model of the Manhattan skyline made of liquor bottles. A waitress seated them in the upstairs room, overlooking a courtyard like an air shaft, brick-walled, with a single tree surviving improbably down below them. Being protected from the hurricane winds, it still had its summer leaves. Looking down on the leaves was like looking at some kind of brilliant Chinese artwork.
“So how’s it going?” Charlotte asked when their drinks had come.
Larry lifted his glass of white wine, clinked it against hers.
“Your householders’ defaults are causing a panic,” Larry said, looking at his glass. “You won’t be surprised to hear.”
“No.”
“Did you ask your friend Amelia Black to start it?”
“I don’t know her that well.”
“She seems like a complete idiot,” he complained.
“No, not at all. She’s pretty sharp.”
“You’re kidding.”
“She has a cloud persona, that’s all. Maybe you could put it that way. Do you know the story about Marilyn Monroe?”
“No.”
“One time she was walking down Park Avenue with Susan Strasberg and no one was paying attention to them, and Marilyn said, ‘Do you want to see her?’ And then she changed her posture and the way she was looking around, and all of a sudden they were mobbed. Amelia is maybe a little like that.”
“I don’t see how that would work.”
“Maybe we should stick to numbers.”
He accepted the rebuke with a little hunching of the shoulders. Such joy, dinner with the ex, his posture said. Charlotte reminded herself to curb her tongue. Very difficult. Possibly a certain merry sadism was obtruding into her from below at the fact of her meeting her famous Fed Ex in these particular circumstances, but there was a higher purpose that she had to remember.
“I only mean,” she said, “that Amelia’s carefully disguised and possibly unconscious brilliance is not the point here. The point is the banks freaking. They were all leveraged to at least fifty times what they have in hand, right?”
He nodded. “That’s legal.”
“So it’s like they’re skybridges extending out into space without touching anything at their far ends. And now a hurricane like our Fyodor is hitting, and all these skybridges are waving around, about to detach and fly away.”
“An ornate image,” Larry noted.
“No one wants to walk on these bridges right now.”
He nodded. “Very true. Loss of trust.”
She couldn’t help smiling. “You always know economists are in deep shit when they start talking about trust and value. Usually when you say fundamentals to them they’re like interest rates and price of gold. Then a bubble bursts and the fundamentals become trust an
d value. How do you create trust, keep it, restore it? And what’s the ultimate source of value? I’ve been reading some of the history on this, I’m sure you already know it. Do you remember when Bernanke had to admit that the government was the ultimate guarantor of value, when he bailed out the banks in the 2008 crash?”
Larry nodded.
“A famous moment, right? Rising almost to the point of political economy, or even philosophy?”
“An infamous moment,” he corrected.
“Notorious! Horrible for any economist to hear! The ultimate put-down of the market!”
“Well, I don’t know about that. The view would be that the market sets the value, just by what buyers and sellers agree is the price. Free undertaking of a contract, all that.”
“But that was always bullshit.”
“You say that, but what do you mean?”
“I mean prices are systemically low, result of collusion between buyers and sellers, who agree to fuck the future generations so that they can get what they want, which is cheap stuff and profits both.”
This was what Jeff had taught her up on the farm, and what he had earlier tried foolishly to correct, or at least express, with his graffiti hacks.
“Well, even if that were true, what could we do about it?”
“It would take values, rather than value. It would take values setting the value.”
“Good luck with that.”
She stared at him. “Have you gotten cynical, or were you always cynical?”
“Isn’t that kind of a, you know, have-you-stopped-beating-your-wife question?”
“You would never beat anyone,” Charlotte said. “I know that. In fact I know you’re a good person and not cynical at all, that’s why I’m talking to you like this. I guess I’m wondering why you are trying to sound cynical right when you have the chance to do some good. Are you scared?”
“Of what?”
“Well, of making history, I guess. It would be a big move.”
“What would?”
“What we talked about, Larry. The time is now. The banks and the big investment firms and hedge funds are all coming to you begging for another bailout. They are envisioning 2008 and 2066, and why shouldn’t they? It keeps on happening! They gamble and lose, they can’t handle it, they come to you and cry, and threaten you with collapse of the global economy and a gigantic depression, and you create and hand over cash directly to them, and they bank it and wait out the storm, wait till other people get the ball rolling, and then they start gambling all over again. And now they own eighty percent of the world’s capital assets, and buy all the governments and laws, and you were part of that for many years. And now they’re doing it again. So they probably expect it will all go as it always has.”
“Because there’s not a counterexample,” he suggested, sipping his wine as he watched her.
“Sure there is. The 1930s depression brought huge structural adjustments, and the banks were put on a leash, and the rich were taxed like crazy, and what mattered were people.”
“There was World War Two to help all that, as I recall.”
“That was later, and it helped, but the structural adjustments in favor of people over banks had already happened when the war started.”
“I’ll look into that.”
“You should. You’ll find that the Fed ruled the banks, and the tax rate on annual income over four hundred thousand dollars was ninety percent.”
“Really?”
“Ninety-one percent. They didn’t like rich people. World War Two made them very impatient with rich people. It was a Republican president who did it.”
“Hard to believe.”
“Not really. Stretch your imagination.”
“You’re doing it for me.”
“My pleasure. Anyway, even in 2008 they nationalized General Motors, and they could have nationalized the banks too, as a condition for giving them about fifteen trillion dollars. They didn’t do that because they were bankers themselves, and chickenshits. But they could have. And now you can do it.”
“But what do you mean, nationalize? I don’t even know what you mean.”
“Sure you do.” Franklin had suggested this riposte. “I don’t know, but you do. So you tell me what it means! All I know is you protect the depositors. And I presume any profits the banks make from then on will go to the government, to pay back what they borrowed from it. So they turn into like federal credit unions.”
“Why would anyone work in a bank, then?”
“For a salary! A good salary, but just a salary. Like anyone else.”
“Why would shareholders invest in a bank, then?”
“Same reason they buy T-bills. Security. Secure investment.”
“I can’t even imagine it.”
“Your lack of imagination is not good grounds for making policy.”
Larry shook his head. “I don’t know. Why would they say yes to this?”
“Say yes or go bust! You offer the deal to the biggest bank, or the biggest bank in the worst trouble, the one about to blow up first. Put the fucking screws on them, they accept the deal or you let them fail as an encouragement to the others. So either way you’re okay. If they accept, the others have to fall in line or collapse. If they don’t accept, you blow the worst one up and go to the next one in line on the gangplank and say, Do you want to go down like Citibank or do you want to live?”
He laughed. “It would get their attention.”
“Of course! And you print the fucking money you’re bailing them out with anyway, so why should you worry? To you it’s just quantitative easing!”
“Inflation,” he said. “Sure to happen.”
“Except when it doesn’t. Come on, don’t pretend theory works here. Besides you want a little inflation, that’s economic health, right?”
“But it can so quickly get out of hand.”
“When you own the banks, you can definitely deal with it. You’ll have your foot on the gas and the brakes.”
He shook his head. “If only it were as simple as that.”
She stared at him.
“It would help if there was support in Congress,” he mentioned, glancing at her. The whole meal he had been looking into his wineglass, as if peering into a crystal ball and hoping for a vision. Now he was looking at her.
“I know,” she said. “I’m trying. If I’m elected I’ll help, but either way there’ll be a group there to help. People are mad. I mean really mad. Unusually mad.”
“It’s true. And then you told them to stop paying their mortgages.”
“Well, it’s Amelia who started that, but yeah. She was right. We want a better deal. We’re on strike against God.”
Their food came and they ate. They talked about the city’s recovery, the various problems and efforts. The way their old walking routes in Central Park had been wiped off the map. The way the past was gone; or, not.
On to dessert, one crème brûlée between them. As tradition demanded, they fenced over it with spoons, cracking the burnt surface and knocking each other’s spoons aside, finally chopping a line down the middle to delineate their portions. At that point Charlotte decided the atmosphere was friendly enough to bring up a delicate matter.
“So,” she said, “let me tell you a story. And I want you to know right from the start that it isn’t blackmail or anything.”
“That’s so reassuring,” Larry said, eyes going a little round. He was far past making up expressions; this was real consternation.
“I hope so. Just listen. Once upon a time, there was a big investment firm with a couple hotshots running it. One of them was an asshole and a cheater, one of them was a nice guy. The cheater was cheating systemically in ways that were submerged so deep that the nice guy didn’t even know they were happening. That could happen, right?”
“Maybe,” Larry said, poking around in the crème brûlée as if looking for something.
“So then a quant working for them found this cheat, and tri
ed to whistle-blow. But the cheater found out about it, and he went to his personal security team and said, Will not someone rid me of this mad quant? And his security said, We can do that no problem. Seeing as they were high on the FBI’s list of worst private security firms. Which is saying a great deal. But then the nice guy found out about it. That his partner had hired someone to kill someone to keep his cheating a secret. Which, due to joint enterprise laws, was their cheating. As the murder would be also.”
Larry was now chewing on his spoon a little, and his pale freckled Ivy League skin was a little flushed.
“So, at that point the nice guy was in a fix. Joint enterprise laws are crazy these days. If you know someone is going to commit a crime you become a party to it. And the cheater had some stuff he could blow the nice guy up with, maybe. But the nice guy had his own security company, more reputable than the cheater’s, and bigger. So he asks his security to enact a little preemptive involuntary witness protection on the quants in danger. And his team does that, moving fast to prevent the hit. They are not geniuses either, being private security after all, and they do the first thing that comes to mind. But then they have these quants they have saved from getting killed. They have to figure out how to release them back to the wild while still keeping them safe and the situation stable. It’s not obvious, but there’s no rush. So the situation hangs fire for a while.”
“So, you mentioned this isn’t blackmail,” Larry reminded her. “And I can see that. So I’m waiting for the bad part.”