The elevator took forever, even ascending like a rocket. Once it decanted them onto the rooftop restaurant, glass-walled with heaters glowing over the tables, they settled at a corner overlooking the river, with a view down and across to the massed wall of old skyscrapers at the southern tip of Manhattan. It was one of the great views of the city, and Charlotte suspected Larry had chosen it with her in mind, thinking it would please her, which it did. They shoved the little table against the glass and sat next to each other so they could both enjoy the view. Wall Street’s wall of monsters looked like swimmers on polar dip day, clustered knee deep in the ice. Over near the kitchen a string quartet was quietly eerieing something out of Ligeti.
The oysters were from a bed right under their building, they were told, grown inside filter boxes. Icy-cold vodka was a drink Charlotte despised, but it helped wash down the even weirder oyster flavor. She could pretend sophistication, but why bother; Larry knew she would only be pretending. So after two oysters she shifted to retsina and fried calamari, more to her taste as well as her style. He stuck with the oysters and manfully finished them off.
Over their meal, which consisted of Cobb salads for both of them, way better than anything the Met’s kitchen could assemble, Charlotte tacked her way to the point of this meeting.
“So, Larry—if this intertidal real estate bubble pops on your watch, do you have a plan?”
He made his eyes go round, his way of saying he was not really surprised but could pretend to be if that would please her. “What makes you think it’s a bubble?”
“The prices going up while the buildings are falling apart. It’s the end of the line for a lot of wet buildings.”
He gestured across the dirty craquelure of the East River. “Doesn’t look like it to me.”
“Those are the skyscrapers, Larry. They’re footed in bedrock. The buildings to the north of them aren’t anywhere near as strong, but that’s where people live.”
“Even so, the indicators aren’t there.”
“The indicators are financial rather than physical. People cook those figures to make it look okay. They play the rubrics involved, but the reality in the water is completely different.”
“You think so.”
“I do. Don’t you?”
He squinted. “I see a little spread between the Case-Shiller and the IPPI. Might be a sign of what you’re saying.”
“And the rating agencies are still kissing ass, so you won’t get any warning there. They never saw a bubble they didn’t triple-A.”
“Now that’s true,” Larry admitted with a little frown. “Can’t seem to get them to behave.”
“It’s called conflict of interest. They’re still getting paid by the people they’re rating, so they give the results they’re paid to give. That will never change.”
“I suppose not.” He regarded her curiously. “You’ve been looking into this, I see.”
“Yes. So what will you do when it happens? Who will you be? Edson? Bernanke? Herbert Hoover?”
“Have to play it by ear, I guess.”
“But that’s a terrible idea. People freak out, you’re in the hot seat, then you start thinking about it?”
“It’s always worked before,” Larry quipped. But his eyes were watching her more closely.
She said, “After the First Pulse, Edson just tried to hunker down and wait it out, and we got the lost sixties, the famines, and the big crash after the Second Pulse. In the 2008 collapse, Bernanke had studied the Great Depression and knew he couldn’t just hunker down. He threw money into the breach and they crawled back from the brink. It was only a recession rather than a crash.”
Larry was nodding.
“And remember, one of the things they did then was nationalize GM. They let Lehman Brothers go down without saving it, and then watched the whole financial world follow it down, and they realized they couldn’t do that with the real economy, so they nationalized GM, took it over, got it back on its feet, sold it back to its shareholders later, and pretty much came out even. Right?”
Larry kept nodding. He was watching her closer than ever.
“So look,” Charlotte said, and leaned toward him. “When the bubble pops, nationalize the banks.”
“Yikes,” Larry said. He put the vertical line between his eyebrows that indicated how worried he would be, if he were worried. “What do you mean?”
“When this bubble pops, they’ll all be hung out there again, and the bigger they are, the more leveraged they’ll be. And they’re all interconnected. And after the Second Pulse, the reforms that got pushed through made the banks keep some skin in the game, so they can’t securitize their housing loans the way they used to. So when the bubble pops this time, no one will know what paper is still good, and they’ll all panic and stop lending, and we’ll all be in free fall. You know that. It’s a fragile system, based on mutual trust that it’s sane, and as soon as that fiction breaks down, everyone sees it’s crazy and no one can trust anyone. They’ll run screaming to you begging for help. You’ll be the only thing between them and the biggest depression since the last one.”
Now Larry was watching her so intently that he forgot to put on any fake expressions. Charlotte saw that and almost laughed, but instead she kept her focus and pounced:
“So then you go to the president and explain that once again the American taxpayer has to bail out these fucking idiots, to the tune of maybe twenty trillion dollars this time. She won’t like that news, right?”
“Right.”
“She might not just go catatonic, like Bush did with Bernanke, but she will freak out, and she’ll want you to have a plan. So that’s when you tell her to nationalize the biggest banks and investment firms. Bail them out by buying them out. At that point the American people are in control of global finance. In the cosmic battle between people and your oligarchy over there”—gesturing at Wall Street and the superscrapers uptown—“the people will have unexpectedly gained the upper hand. You can print money, restore confidence, crank the handle and get things going again, and after that, the ridiculous profits from finance will belong to the people. Also you can aim finance at solving people’s real problems. Congress can reform the financial system based on laws you write for them to pass, and you can quantitatively ease the American taxpayer instead of the banks. Print money and give it out to the bank of Mr. and Miz Taxpayer. It will be the biggest judo flip of power since the French Revolution!”
Larry shook his head, trying for one of his old expressions, this one meant to express faked admiration for Charlotte, an expression she remembered very well. “You are still such a dreamer!” he exclaimed.
“Not at all! It’s a plan, a practical plan.”
“It’s like you’re a communist or something.”
“Yeah yeah, Red Charlotte.”
“Charlotte Corday, isn’t that right?”
“I don’t know, didn’t she kill one of the revolutionary leaders?”
“Marat, right? But for being a backslider, if I recall? For not being revolutionary enough?”
“I don’t know.”
“Let’s have it that way. You’ll stab me in the bath if I don’t hold the line.”
“If you don’t save the world when the chance comes. Don’t just put Humpty Dumpty back on the wall like all the other times. They’ll just fuck things up again, as soon as they can. Because they are greedy idiots. There’s not an idea in their heads except to line their pockets and head for Denver.”