The Return of Elliott Eastman (4 page)

Chapter Seven

Samuel Goldman, the Chairman of the Securities and Exchange Commission, gazed uneasily at the three attorneys who seated themselves across the vast expansive desk top from him. This was a highly unusual meeting, he thought, but when Elliott Eastman requested something one was better off complying, as it would probably come to pass anyway.

“I’m Robert Dale, and these are Paul Cranston and Bryan Banks, attorneys representing the interests of Mr. Elliott Eastman. He extends his personal thanks for taking the time out of your busy day to meet with us. He wished to be here, but unfortunately he had pressing business to attend to in Washington.”

“My pleasure,” Samuel Goldman replied, extending a hand shake to each man while still eyeing them with a degree of suspicion.

“Mr. Eastman respects your opinion greatly and wished you might render an opinion once you have read this one page document,” Attorney Dale explained, opening his brief case and sliding a single sheet of paper across the desk. “He has also asked that any reference to this meeting and his name not leave this room.”

Attorney Dale gazed sharp eyed at Goldman and the other members of the commission which were seated there.

“Agreed,” Goldman replied brusquely and bent to the document at hand.

Goldman read it carefully. When he was finished he looked up and smiled. “It’s bold and shows imagination, but why would Mr. Eastman be interested in forwarding such a proposal?”

“He feels this country has been very good to him and is concerned with the direction it has taken in the last few years. He believes such a proposal, a small transaction fee on stock trades, commodities, futures and derivatives, is painless and eliminates our growing deficit, which he feels is the single greatest threat to our nation. He also believes that with the explosion of various financial instruments in the last few years, the income stream will be quite substantial.”

“I might agree with him, but it is pointless to discuss this any further. You’ll never get Congress to agree. The banks have enormous sway over them. They’ll not even get the bills written.”

“Could you kindly identify the members of Congress who would most strenuously oppose such a bill?” Attorney Dale asked softly.

Goldman scratched his chin. “You’d have everyone on the Senate Banking Committee, Coryn, Graham, and Lanting against it. You’d probably have trouble with Bainer and Whitback over at the House Ways and Means Committee, and of course the House Speaker Cobbings will side with them. And that’s just to name a few.”

Attorney Dale swiftly wrote the names down on a note pad.

“If this bill were to be written, Mr. Eastman has argued it must be done with great care so as not to allow Congress to merely spend the monies. He also wants to be clear that this is not to apply to the savings and checking account transactions of the general public. He expressed a desire that the bill be very specific. It would require a division of the SEC to manage the monies and secure a lock box style of accounting, so not a single penny is misplaced. He’d like you to manage that division, under the SEC, and imagines there will be a sizable pay raise for this new staff, something in the six figure range for you as well as a spot on the national stage. The SEC would be the natural governmental body to oversea such a fee arrangement, as they would be on the front line of collections anyway. You have three years left in your term. You would be the inaugural General in the ‘War on the Deficit.’”

Dale could see the lights glimmering in Goldman’s eyes as he imagined himself on the cover of TIME magazine.

Attorney Dale continued. “If Senator, I mean the former Senator Mr. Eastman, can get the bill to the floor he would respectfully hope you would endorse it, and he means strongly endorse it. He believes your endorsement would go a long way toward getting the bill passed.”

“Of course. I’d have no problem with that,” Goldman swiftly replied. “But with the powerful lobbyists that every major corporation has at their command, there is not the proverbial snowballs chance in hell of such a thing happening.”

“But if it was to take place, do we have your word that you would strongly endorse such a bill?” Dale pressed the chairman.

“Yes, you do.”

“Thank you for your time Mr. Chairman.”

Chapter Eight

Elliott Eastman paced softly across the thick carpeting of the Oval Office with his hands folded behind his back. The sun was just rising to the east of the White House, slowly spreading thin fingers of sunlight across the Rose Garden. Elliott was humming softly. The door swung open and in walked President White with a big smile on his face. He greeted the former senator warmly, grasping the proffered hand saying, “It’s been awhile, Elliott. It’s so good to see you again. Can I offer you some coffee or tea?”

“No thank you. You’re looking well, Samuel. The presidency must agree with you.”

“Agree? Other than a constant headache and a couple dozen bleeding ulcers, I’m just peachy,” the President laughed heartily.

“Please tell me you’re kidding.”

“Yes, it is a marathon everyday, but we’re doing okay. The poll numbers are still lower than they were, but they seemed to have stabilized and the team has high hopes I’ll win a second term.”

“Is it too early for congratulations?”

“Well the election is still a year away Elliott, so I’d say it’s a tad early.”

“Let’s sit and talk. I’ve got two ideas that, when linked together, I think might just win you a second, and possibly a third term,” Elliott suggested.

Paul smiled. “A third term? You’re a better salesman than I gave you credit for. I got your message … something about ‘problem solved.’ Intriguing to say the least. Talk to me.”

“I know you’re pressed for time. Here are the ideas in a nutshell. We cannot grow, cut or tax our way out of our debt issues. We are facing the same fate that Greece, Spain, Italy, Portugal and Ireland suffered a few years ago. We need a new income stream. It’s the only answer. I’ve had some of my people do the math. There are approximately 985 million trades each day on various US stock exchanges and two sides, buyer and seller, to each trade. By the way, that 985 million is tapes A, B, and C. The Nasdaq, the New York and the Euronext exchanges. It doesn’t include commodities, futures or derivatives contracts. In any event, tapes A, B, and C reflect approximately 1.8 billion trades. We should place a nominal fee; a flat fee so easy to understand even a child could grasp it, on each trade. Say ten dollars on trades over one thousand, one hundred dollars on trades over one hundred thousand and one thousand dollars on trades over one million. We calculate that this will generate in the range of forty million dollars a day, or two hundred billion a year on the stock trades alone. If we throw in a similar fee structure on the commodities, futures and derivative contracts, you know, the more exotic financial instruments this could generate another trillion a year in fees. I’ll give you a little background. The derivatives market back in 1997 was $17 trillion a year. In 2005 it was $125 trillion, whereas today it is estimated to be $703 trillion a year. To put that into perspective, it’s about forty times the Gross National Product of the entire country. Also, the gentlemen that run some of these hedge funds earn quite a bit.” Elliott paused flipping through his notes. “Jean Simmons of Renaissance Technologies earned 2.5 billion dollars last year and David Tepperson of Appaloosa Management made over 4 billion, so it would seem this is a very lucrative business. I would suggest even a modest fee on these transactions would generate something in the neighborhood of $1.5 trillion dollars a year. We’ve tried to take a conservative approach. In previous experiments with these fee arrangements business has gone to other countries, but they want our dollars and they want our business. If they threaten to leave, we counter by denying them access to our market. Problem solved. The experts I hired believe we could pay off our national debt in seven and a half years.”

President White started to speak, but Elliot held up his hand.

“And that’s only part of it Paul. We must cut defense spending as well, and overseas bases are the low hanging fruit. We calculate we could save a minimum of $350 billion a year by closing just six hundred bases.”

The President was about to beg off, but Elliott pressed on.

“Look at it Paul. It’s beautiful. We can generate something in the neighborhood of two trillion dollars a year and not have to cut social programs or any other important safety nets. Once the debt is extinguished we could fund education, infrastructure and social security; all the things we’ve been trying to address for years. Polls show the deficit as the fourth item on the fear factor list in the minds of the American public. What they don’t show you is that it was eighth on the list just five years ago. People are rapidly becoming aware of the risks posed by the deficit. Secondly, it’s really their future they are expressing concern for in these polls. What better way to address their fears than addressing social security. It appeals to the aging baby boomers and the younger generations who are expressing growing resentment at their obligation to pay for their parents’ retirements. And look where the tax comes from; trades. Only thirty percent of the American population own stock, and none own derivatives, so the tax is avoided by most of our population. The funding of this program sits squarely on the financial speculation industry. We tax gamblers, don’t we? That’s all these outfits are, gamblers. And most importantly, it’s just a temporary tax, only for a few years. You’re going to appeal to the young new voters in this country and draw generations of voters into the democratic fold. At the same time you’re solving the biggest headache for our retirees wondering if their money will last the remainder of their lives. You’ll win all their votes. Your legacy could be the president who tamed the deficit.”

President White took a moment to comment. “Initially I must confess I like it, but as you know I’m going to have to run it by my re-election team. I can see one possible pitfall. The corporations that trade most of the stock and hedge funds and their lobbyists will fund any candidate who opposes it. The results could be disastrous for my campaign, but I’ll let you know what my team recommends.”

“Paul, we’ve known each other for a long time and I know your aim to get re-elected is paramount to you, but I must ask you something. It was the question I found myself asking quite often in my last years in office. What about the American people? What happens to their interests when we leaders of the nation must bow to the wishes of Big Money? I kept coming to the conclusion that they deserved better. At some point we politicians need to do what’s right by the American people.”

“I understand the sentiment Elliott, but I can’t let those types of thoughts get in the way of my re-election.”

“Paul,” Elliott said softly, a measure of sadness evident in his voice. “These problems are real. A trillion dollar a year deficit is unsustainable. At some point we will bankrupt the nation, if we haven’t done so already. We’ll go to the media with the names of the corporations that oppose this bill. Any corporation that doesn’t support the new ‘War on the Deficit’ will be blacklisted and their products avoided. We can win this battle. Does your team have any proposals on the table to deal with it?”

“Nothing concrete yet, but it is something we’re keeping an eye on,” the President replied while glancing at his watch. “I’ve got another meeting to go to in about ten minutes regarding the Israelis, and I need to be briefed on the latest events.”

“In complete honesty, allow me to digress for a moment. I would also like to see a Value Added Tax. We’re the only advanced democratic nation in the world that doesn’t have one. And perhaps a National Sales Tax enacted for two or three years to further destroy our common enemy, the deficit, but that is for another day and time. I didn’t want to reach too far and those two proposals affect the average American worker, so I much prefer this approach. So I’ll close by making this promise to you, Mr. President.”

The President noted Elliott’s change in tone and looked over at the former congressman, but at that moment Elliott chose to gaze at the table in front of him collecting his thoughts. He was losing the President. The leader of the free world wasn’t listening.

The President looked away again until Elliott spoke more forcefully.

“Listen to me Paul. The time is now. If we can get this into bill form and on the floor of Congress, I will personally write a ten million dollar check to your re-election campaign.”

The President was in the process of glancing down at his watch for a second time when his head shot back up. He stared intently into Elliott’s face for a moment to be sure the former senator was not joking.

“I’ll even have my team of lawyers help with drawing up the bill, but we need your backing,” Elliott added.

“That is very generous, Elliott. Are you sure about that?”

“I’ll put it in writing if you wish.”

“That’s not necessary. Your word is good enough for me.”

Elliott stood and said in a very direct and formal manner, “Thank you for taking the time to chat with me Mr. President. I’ll await word on your decision.”

Chapter Nine

Eddie Kelley climbed from the shower, quickly dried off, and studied his sturdy figure in the mirror. The angry pink scars from the hail of shrapnel he’d endured dotted his physique. For a moment he thought back to his years chasing the Taliban around Afghanistan.

“For what?” he asked for probably the hundredth time.

James Lally called from the living room of their rented suite at the Comfort Inn in New Braunfels, Texas, “Dude, you gotta get out here and see this. It’s all over the evening news. Maria Baritromo just said upwards of ten thousand prisoners have escaped.”

Eddie strolled from the bathroom with a towel around his waist, grabbed a beer from the fridge and stood in front of the television.

“Is it just me or is Maria Baritromo hot as hell?” Eddie asked.

“Yeah, yeah. Look at that hole in the prison wall in Phoenix! Did those guys use a Patriot missile or something?”

“Sub-standard construction,” Eddie replied. “They saved a few pennies on concrete by not filling the voids in the center of each cinder block.”

“Let’s see what they’ve got on another channel.”

“No, not my Maria.”

“Sorry.”

“Damn, good-bye Maria.”

The CNN news anchor was stating in shrill tones, “Local police forces are overwhelmed. Governments are calling in the National Guard. There are rumors the feds may send in the army. There are upwards of twenty thousand criminals released on the streets of our cities.”

“Wow, the number of escapees just doubled,” Eddie said.

James switched the channel again. Bill Maher was laughing with the other members of his guest panel.

“I don’t see the big issue. Calling in the National Guard? Nonsense. Let me ask you a question? If you were a prisoner who just got a get of jail free pass, what are you going to do? I’ll tell you what you’ll do. You’ll buy a six pack and find the nearest street walker. After that you go visit mom, and after that you get another six pack and find the nearest … ! Anyway you get the picture. I don’t think these guys are the threat they’re being made out to be.”

The show goers burst into laughter.

James laughed as well saying, “I love Bill Maher. He’s always so right on.”

“He does have a unique view. I’m bushed. I’m going to hit the hay. If Elliott calls wake me.”

“Sure thing. Good night.”

“Good night.”