“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 tried 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.”
“Oh it’s just a story. I tell the story because it was told to me by a friend of mine, Inspector Gen Octaviasdottir. She lives in my building, and she’s very devoted to the New York Police Department, and to lower Manhattan, and she’s well-known down there as the solver of all kinds of mysterious crimes. But she’s a pretty unconventional thinker, I guess you’d call it, when it comes to enforcement of the laws. She has her own views. And she likes those quants, and she’s happy that someone made an effort to keep them alive. And so she likes whoever that was. So she told me that although she and her team worked out the details of this story, she also gathered all the evidence herself, and she and her team have it sequestered, kind of like those quants were. No one else has the story, or at least the evidence to prove it, and she doesn’t plan on giving it to anybody. So if, for instance, the cheater ever tried to blackmail the nice guy in the fairy tale, it wouldn’t work. There’s nothing there, all the way back up the line. And now it’s a matter of letting the whole thing sink to the bottom of the canals. To the dark and backward abysm of time.”