Terror on Wall Street, a Financial Metafiction Novel (14 page)

CHAPTER FORTY ONE

I HAD A DREAM

As they made their way to the Capitol building, Harry could see that the National Mall overflowed with hundreds of thousands of people.  Outside the Capitol, he saw a perimeter of armored vehicles and heavily armed soldiers and police in riot gear.

     The demonstrations had started at 6 a.m. and, despite the line being drawn around the Capitol, the people were present in large numbers.  The President had activated the Army National Guard, whose ten units were out in full force.

     “We have a history of peaceful demonstrations here, Mr. Brammon.  Let’s hope we don’t break that record today.”

     People were holding signs which read:
End Wall Street Greed
and
We, the People – Too Big to Fail
, among others.  They were chanting anti-war songs from the 70s. 

     Harry stopped for a moment to listen to the speakers.

     “Professor, don’t we have to go?”

     “No, Ms. Baxter, we have a little time.”

     Harry strained to listen to the speaker.  It was difficult to do, with the noisy helicopters circling overhead.

     “Let’s get a better place to listen.”

     Harry led the group through the throngs of people until he could better see and hear the speaker.  He was a black man with a strong, powerful voice.

    
He sounds just like Martin Luther King,
Harry thought, recalling the famous ‘I have a dream’ speech.

  
  “It is not by accident that we are all in this mess.  We, all of you, and I, have lost control of our democracy.  And it is our own fault.

     “We have allowed this great country – The United States of America – to become for sale to the highest bidder.  It is an oligarchy of the elite who, through their riches, control who is elected to the Congress, the Senate, and the Presidency.

     “It used to be, when I was young, that the common man had some kind of a small impact on the political process.  Sadly, this is no more.  Greed has taken over politics, which now has a price tag.  It is estimated that to have a decent run at being elected president, a candidate must accumulate at least three hundred million dollars.  Ladies and gentlemen, this does not come without a cost to the integrity of that candidate.

     “Candidates for president today have billions in their PACS and Super PACS.  And behind me, in the hallowed halls of the nation’s Capitol building, every office is for sale through legalized bribery called 'lobbying'.

     “Every government office is run, at the very top, by members of the same industry it is supposed to regulate, hand-picked by the oligarchy themselves. 

     “And now, ladies and gentlemen, you see these armored personnel carriers around me?  Do you hear the helicopters circling overhead?  The oligarchy is afraid to lose their grip on their power.  So afraid, in fact, that they will sacrifice the world’s economy to hold on to the house of cards they have created with it.  It’s time to say NO MORE!  No more will we be the pawns of the rich and powerful!  No more will we sit on our rights and waste our votes while they plunder our country!”

     The crowd began to chant ‘no more’ in in response to the speaker’s fervor.

      “NO MORE!”

     “NO MORE!”

“God help us if this crowd gets violent.”

     “No, Mr. Brammon.  God help us if the police get violent.”

CHAPTER FORTY TWO

THE FINAL TOUCH

The days passed by quickly and Harry suspended classes in favor of finishing his whiz kids’ sessions with Kenneth Grant. 

     “I’m concerned with the fact that only a handful of companies control most of the mainstream media.  Even the Internet is now being taken over by corporate gatekeepers.”

     “What’s your solution, Mr. Pendleton?  We can’t abolish the First Amendment.”

     “No, but we
can
clean up the regulatory agencies.  For example, during the last big economic crisis in 2008, almost nobody was prosecuted.”

     “The Government goes after the little guys, not their own.”

     “Exactly.  We have to close the revolving door.”

     “How do you propose we do that?”

     “Through term limits and campaign reform.”

     “I think Mr. Pendleton is right, Ken.”

     “Well, there you’re getting into the same freedom of speech issue.  The problem we face with campaign reform is our own Supreme Court.”

     Ike lifted his eyebrows in surprise.

     “While the U.S. was well on its way to becoming an oligarchy, we actually passed a comprehensive campaign reform act in the 70s called the Federal Election Campaign Act.  Amendments to the act limited individual donations to $1,000, and $5,000 to PACs.”

     “What happened?”

     “The Supreme Court shot it down in
Buckley v. Valeo
.  Then, in 2002, we were able to pass another campaign reform act called the Mc-Cain Feingold Act, which limited the use of corporate and union money to fund political ads close to elections.”

     “What happened to that?”

     “It was struck down by the Supreme Court in
Citizens United v. Federal Election Commission
in 2010.”

     “So the challenge is to craft a campaign reform law that the Court won’t strike down as unconstitutional.”

     “That’s right, Mr. Pendleton.”

     “What exactly does the Court find offensive about campaign expenditure limits?”

     “Well, in
Citizens United
, Justice Kennedy felt that they violated the First Amendment’s right to free speech.”

     “Corporations have the right of free speech?”

     “Apparently so.”

     “Are you kidding or what?”

     “No. The Court found that corporations that spend money on political ads to advance special interests are essentially the same as the corporations who run newspapers and television media.”

     “What about the other case?”

     “
Buckley v. Valeo
?  In that case, the Court also held that campaign contribution limitations don’t regulate conduct, but speech; and, because of that, they violate the First Amendment.” 

     “So, again, spending money to buy a politician is an exercise of freedom of speech.”

     “In a way, Mr. Pendleton, yes.”

     “How?”

     “The giving or spending of money on say, a political advertisement involves not just the conduct of spending the money, but also communication.”

     “I don’t buy that.”

     “It’s not important whether you buy it or not, Harry.  The Supreme Court has not changed its mind on the issue in almost forty years.  To write a bill which they would shut down if it passed would be a waste of time.”

      “Well, doesn’t there have to be a balance between speech and controlling corruption in government?  Whoever has the most money now can buy any election.  And any legislation.”

     “You’re preaching to the choir, Harry.  We have to word it so cleverly that it protects speech while, at the same time, deterring corruption.”

     “What about federal matching funds for smaller contributions?”

     “You may be getting somewhere there, but where will the funds come from?”

     “Good question, Ken.”  Harry placed his thumb on his forehead.

     “What about requiring equal air or print time for smaller contributors?””

     “That may have some promise, Harry.”

     “Let’s work on a public financing plan that will level the playing field.  And a ban on federal regulators taking positions with private corporations.”

     “It's more likely that a waiting period or “cooling off” period could get passed, Mr. Pendleton.” 

CHAPTER FORTY THREE

THE LIGHT OR THE TUNNEL

The Senate Finance Committee convened under heavy security due to the turmoil outside.  The Chairman, a plump, greying Senator from the great state of Utah, entered the room and took his position at the top of the food chain right under the American flag, as if today was just business as usual. Since the meeting was televised, he called it to order with a self-serving political statement that lasted far too long, knowing that the majority of his constituents would be tuned in to the hearings either in real time or later during the evening news. If there were any solutions coming out of this meeting, he wanted to get all the credit.  He acknowledged Harry Mason and his contingent of financial experts, who were seated in the front row at the tables in front of the microphones.

   
 
Harry was busy shuffling his index cards.  Snookie could see that he wasn’t ready to begin, so she spoke out of turn to give him time to organize.  “I have a question for the Chairman.”

     Harry looked at Snookie in astonishment and the Chairman cleared his throat, but before he had the chance to speak, Snookie dove in.

     “I am not sure just why we are here, Senator. You gave a nice little political speech: perhaps the best I have ever heard. But we are not here to promote your political presence are we?”

     The Chairman furrowed his brows, which were more like grey feathered wings.  They matched the grey spurts of hair coming from his ears.  He didn’t want to appear to be attacking this young woman on national television.

     “Let’s face the facts.  This financial collapse has been a long time coming.  The banks that each of you gentlemen cater to have been allowed to become too big.  Not too big to fail, as you have said in the past, but destined to fail because they are too big.  If they were smaller, then a failure of one or even several of them could be contained.”

     “Now, young lady, I…”

     “Let me finish.  The brokers working for our largest financial service firms have plundered the average investor’s portfolio, ravaged their bank accounts, and have destroyed the lives of our people, while the fat cats in Washington ride the coattails of the oligarchy’s money grab. This is serious business and we do not need political favoritism to come between what is the right thing to do. Do we, Senator?

    “Order!” The Chairman growled and banged his gavel.

     “That is what you need!  Order!”

     Harry was in shock. His mind was raging and pouring out alternative actions to be considered. It all centered on that little speech by Snookie to the committee – and the words sounded familiar.  Harry thought and thought about it. 
Where have I heard that before? 

     Of course!  They were
taken directly from the Declaration of Independence penned by Thomas Jefferson in 1776. All she changed was the noun phrase subject and the modifiers and objects to reproduce one of the most dramatic sentences ever written in the English language.
 

     “He has
plundered
our Seas,
ravaged
our Coasts, burnt our towns
and destroyed the Lives of our people
.”–Thomas Jefferson

     It now became clear to Harry how Snookie’s beautifully crafted little speeches all these months were made up. She was a savant!  She was merely retrieving famous examples of well-known and dramatic speeches and altering the noun subjects and modifiers until she sounded very learned on any subject.  Her brain was like a computer when it came to memorizing facts – any facts – but she couldn’t tell a joke.  Now her skill was being put to good use.  She was his secret weapon.

     Snookie turned to face the crowd in the gallery as they applauded, whistled, and cheered. With a single simple gesture she silenced them and said, “Let’s move on with the agenda.  I would like to introduce my mentor, Dr. Harry Mason, a Nobel laureate in economics, who will conduct the order and sequence of our report without further interruptions. Thank you.”

     Harry remembered how Snookie had looked at his mathematical proof so curiously that first day in class. He went back in his mind to that afternoon in the library of the University when he wrote his thesis - all fourteen pages in a single afternoon. Had he plagiarized the formula from something he had previously read? Or did he get that flash of creative genius, as required by patent laws. Or even worse, had he made a mistake in the proof and Snookie found it? 

     Harry stood to acknowledge the Committee, looked down at his cards, then back up at the Chairman and the television cameras, which were all focused on him. 
This is it. Sink or swim.

     “Mr. Chairman and Senators of the Senate Finance Committee, unfortunately, as it has been many times with our government, we do not have the luxury of taking the time to fix our broken financial system because we don’t pay attention to it until we have a crisis.  Each of you have a copy of our report on your desk, as well as the legislation we propose to save the dollar and our world economy.  The dollar serves as the world’s reserve currency, and we have the responsibility to our creditors to restore its faith and value.”

     Harry looked at his cards to keep him on the right path.

     “This is not a cyclical problem which we can solve by printing more money to throw at it.  It is a structural problem.  The world has become smaller and we need our economic partners as much as they need us.  Since it is a structural problem, we need to address the structure of a new world currency.  There are several ways that we can do this and still be a leader in world monetary policy. Or we can continue with business as usual and let some other country become the world leader. I would now like to turn the floor over to Mr. Carlos Rodriguez, an expert in economic systems, for his report.”

     Carlos stood to be recognized, then nervously sat down in front of the microphone.

     “Thank you, professor.  Each member of the Committee has before him (or her) our report, which shows how, normally, regulation has interfered with the free market system.  Government guarantees of loans and bank bailouts have created a disastrous situation from which we are now, unfortunately, feeling the effects.  As you can see from our report, you can’t have it both ways.  You can’t give guarantees and, at the same time, deregulate the banking industry.  By allowing them to dabble in other investments and by keeping their main business of lending money stagnant by lowering interest rates to zero, you have, with this regulation, created a situation where we actually need more regulation to put the economy back into place.  Professor?”

     “Thank you, Mr. Rodriguez.  Now, Mr. Brammon.”

     Bob stood up by his seat, nodded and sat back down to give his testimony.

     “As you can see from our report, the financial industry has been robbing the investing public blind as long as they have been allowed to use other people’s money.  There has never been proof of any system that can beat the market, yet most brokers tell their clients that they have products that claim to do it.

     “That is why we have recommended sweeping changes to the oversight of the industry, starting with national examinations which guarantee competence and minimum education requirements for brokers.  Your lobbyists, and their friends in the SEC will not agree, of course, but brokers must have the same fiduciary duties to the investor as the registered investment advisor.  Professor?”

     The Chairman was turning pink, and looked as though he would pop from holding back whatever it was that he thought he wanted to say.

     “Thank you, Mr. Brammon.  Mr. Pendleton, would you please tell the Committee your findings.”

     Ike nodded and began his presentation. “The average investor is motivated to make his decisions not only by financial information and advice, which as Mr. Brammon has pointed out is so lacking from the industry, but also emotions.  That is why it is so important that we take the bias out of the regulators in the industry.”

     The Chairman interrupted.  ‘Now see here, Mr. Pendleton.  What bias are you talking about?”

     “I’m talking about the revolving door, Senator.  You let the securities and the banking industry, and every other industry, regulate themselves by taking what amounts to bribes from lobbyists.  We need to pass legislation to enact term limits and to limit political contributions to take the profit out of politics.”

     “What evidence do you have of that?”

     “For that, I will turn over the floor to Mr. Larry Thompson.”

     “Thank you, Mr. Pendleton.  The problem facing most investors today is the quality of their information.  The mainstream media, including the financial media, has aligned itself with the financial elite, and presents a program biased to their liking. 

     "There is also the problem of selective enforcement.  When the SEC and the DOJ was called upon to investigate the crash of 2008, hardly any executives were prosecuted.  Most of them, actually, were allowed to profit from their fraud and irresponsibility.  They concentrated on the little guys and let the big ones go, and this actually decreased the financial elite’s competition.  This ad-hoc approach to enforcement has to stop. Professor?”

     “The first solution has been staring us in the face for years now, and that is a return to some kind of a gold standard.  It was JP Morgan himself who said that “gold is money and nothing else.”  And we have seen central banks all over the world, such as Russia and China, buying gold as the dollar weakens.  We already have in existence the International Monetary Fund, which has already successfully propped up the Euro with its SDRs in the Greek and Cyprus bailouts.  The dollar, or IMF issued SDRs, could serve as the world’s reserve currency, collateralized by gold reserves; the majority of which are already held in Europe and the United States.

     “But this is only a part of our recommendation.  We must enact legislation to regulate the almost unregulated trading of derivatives.  The notional value of derivatives traded in the market every year is over ten times the size of the world’s economy.  And we need to return to sensible bank regulation.  Banks cannot be aggregated in the hands of so few that the failure of one or two of them causes a failure of the entire monetary system.

     “Finally, and this will be of extreme interest to you gentlemen, you need to realize who your bosses really are.  They are the voters, whose savings have been stolen and destroyed by the negligence and greed of your benefactors.  It is time for sensible term limits to be imposed and limitations to be put on political contributions.  We need to show the Congress that our government is no longer on sale to the highest bidder.  It belongs to the voters.”

     “Professor, I resent that implication.”

     “Senator, it’s not an implication.  It’s a fact.  Ms. Baxter, could you enlighten the Senator, please?”

  “Your voting record, Senator, shows that you have voted against the
Bring Home Jobs Act
.  It also shows you voted no on the
Protect Women’s Health from Corporate Interference Act
and voted against funding
Planned Parenthood.
You pride yourself on being ‘green,’ yet you’ve voted against carbon pollution guidelines consistently across the board.

     “You voted against the
Student Loan Affordability Act
and in favor of the wars in Iraq and Afghanistan.  You voted in favor of the largest defense spending bill in United States history, voted to extend the
Patriot Act
, voted no on the
Dodd-Frank Wall Street Reform and Consumer Protection Act
,  no on the
Medicare Bill
, and in favor of the big bank bailouts.  Does that pretty much sum up your accomplishments?  I would say that it is pretty clear who you work for, and it’s not the voters of the United States of America.”

     Harry stood up to finish.  He looked right into the television cameras, and spoke without using his index cards.

     “The choice is clear, Senators.  Printing money to bail out the big banks is not going to work this time, and if you do it, you will be contributing to the collapse of the international monetary system and signing the death warrant for the dollar.  The people have spoken.  We recommend that you pass the legislation that has been prepared for you and which is sitting on your desks.  We’ve named it the
Save the World Economy Act
because that’s exactly what it has been designed to do.  All you people out there need to do is to pick up the phone and call your Congressman now.  If you can’t call, then email.  Tell him that you’re tired of business as usual in Washington and that you want the Congress to do the right thing and pass this bill.”

     The audience gave Harry and Snookie a standing ovation, much to the chagrin of the Committee members who were, themselves, supposed to be representing the people.  Harry turned to Snookie as they walked out.

     “Well done, Ms. Baxter. Thanks for helping me in there.”

     “Birds of a feather will flock together, professor.”

     Snookie had sensed that the professor, like her, had a mental deficiency.

     “Excuse me?”

     “William Turner, 1545,
The Rescuing of Romish Fox
.”

     For once, Harry thought he noticed a gleam in Snookie’s eye.  He smiled back at her.

     “Of course.  Well, hopefully enough people have seen our performance and flock together so that these gentlemen have no choice but to do the right thing.”

     Harry walked out of the hearing room hand in hand with Jennifer, and with his team of whiz kids at his side.  They had done their part to save the world.  Now, it was up to the people.