“Yadda, yadda,” Lowell said. “We’ve all read Fair Game.” (Liar. In his resentment of the fuss made over it, Avery’s husband had never brought himself to read past a few pages of the introduction.)
“I’ll grant you this much.” Tom was making an almighty effort to remain affable, for which Avery was grateful. “’Kay, for the last several years inflation has bounced between 3 and 4 percent. I realize that to experts like you folks, I’ll sound dumb as a coal shovel. But the figure I tripped across the other day came as a shock to me: with 3 percent inflation, the dollar halves in value every twenty-three years. That’s from Fed money printing. So when I don’t control what ‘my’ money is worth, maybe it isn’t really mine in the first place. At best, it’s a loan. Which Krugman can zap into ashes while it’s still in my pocket, like a superhero.”
“I’m afraid that’s a layman’s reading, Tom.” When amateurs trod on his patch, Lowell rarely heeded Avery’s admonition that he would better beguile his companions by acting humbly receptive, not haughtily authoritative. “And too simplistic. Inflation has to be kept positive, to prevent deflation, which is the real bogeyman. Most of that 3 to 4 percent hails from rising commodity prices, not loose monetary policy. In fact, increasing the monetary base has had all sorts of benefits for our economy. Everyone got so excitable about quantitative easing back in the teens. What happened? Jack. Most of the cash seeped, profitably for everyone, to emerging markets.”
“Look, I won’t argue about money supply, which is outside my purview.” Tom was now sounding testy. “I was trying to make a point about these airport searches. Because in the olden days, meaning two months ago, you could take what was, by popular conceit, delusional or otherwise, your money out of the country or back in again, as much and as often as you wanted. So I don’t see why y’all are getting het up about these terrible, criminal businessmen”—tear-ble, crimnal bidnessmin—“who have the gall to try and transport their own cash overseas, when in October the same behavior was perfectly legit.”
“I thought there was a limit,” Avery said. “Like on those Customs forms—”
“Lotta people misunderstand that, hon,” Tom said. “Before Alvarado’s Renunciation Address, you only had to report carrying over ten thousand dollars on a FinCEN 105. So long as you declared it, carrying more than ten grand over the border wasn’t illegal, and they sure as hell didn’t take it away from you, either.”
“Hold it—are they confiscating the cash at the airport?” his wife Belle asked in horror—very restrained horror, since Belle Duval would remain contained and understated in the midst of an asteroid collision. Her attire was typically subtle: a creamy faint-pink top with a beige pencil skirt, a thin white scarf adding a subdued dash. Her voice was quiet; her makeup was quiet; her not-quite-blond hair may have been recently touched up with highlights, but the do itself—soft and neat—was quiet as could be. Yet Belle’s was a smart quiet, her reserve an attempt to withhold judgment.
“Yup, all smuggled goods are impounded,” Lowell said. “I gather these confiscations of cash are getting immense emotional, too. Fainting. Shouting matches.”
“Worse,” Ryan said. “One guy lay on the floor and sobbed. They had to carry him out. A woman in front of us—big enough you wouldn’t want to cross her—got into a fistfight with one of the agents. Before they took his wad off him, another guy tried to set the money on fire. Meanwhile someone at the next machine over was ripping up thousand-dollar bills—which is also a federal offense, and just compounded the charges.”
“Anything but let someone else have it,” Lin Yu said. “Gosh, makes you think that wealth doesn’t have an improving effect on people.”
“Currency seizure is making a fortune for the feds,” Tom said. “It’s basically an ‘airport departure tax,’ except they get to charge whatever a passenger is packing. Minus that hundred-dollar allowance, of course. So gracious of them to let you keep a little something for a hot drink.”
Avery basked in Tom’s soothing provincial accent: eh-uh-paht depah-chuh taxes, hunner-dollah allownse. So many Warshingtonians, as Tom would say, were blow-ins from elsewhere that friends born in the region were blessedly anchoring. Tom made her feel she lived somewhere in particular.
“Call it a tax, then,” Lin Yu said. “Probably the first taxes the douche bags have ever paid.”
“You have a doctorate in economics,” Belle said to Lin Yu, politely but firmly. “You must know that’s not likely the case. People of means pay the vast proportion of federal income taxes—”
“I’ve always admired that ‘airport departure’ gambit,” Lowell said, keeping conversation light as he poured another round of wine. “Popular in Africa. You have to pay to be allowed to leave. Like being held hostage. It shows a healthy humility about the state of your nation: ‘We know you’ll fork over just about anything to get out of here.’”
“Pretty soon,” Tom said quietly, “we may be willing to pay just about anything to get out of the United States.”
Sharing her husband’s wish that this early in the evening the gathering not get too dark, Avery intervened. “Think about it: no way are those TSA officers hanging around that much hard cash without picking an occasional twenty off the floor.”
Lowell chuckled. “More than a twenty. I heard the New York airports are feeding frenzies. But what gripes me is that hundred-dollar limit. You can’t get a taxi home from the airport with a hundred bucks.”
“But why are so many people trying to get cash out of the country,” Belle asked, “at the risk of having to forfeit it all?”
“Foreign exchange in the US is suspended indefinitely,” Ryan said. “Since the initial crash, the dollar has been dropping, oh, two-tenths of a percent or so almost every day. The über-rich are frantically trying to bundle their booty to London or Hong Kong—anywhere they can convert it to another currency that will hold its value. Bancors, usually—whose value is going up slightly, to Alvarado’s chagrin.”
“But if the value of the dollar outside the country is so low,” Belle said, “why consolidate the loss?”
“These are greedy people,” Ryan said. “For whom anything is better than nothing.”
“What’s so ‘greedy,’ Tom said, “about wanting to safeguard some tiny fraction of the worth of money you may have worked hard to earn?”
“Oh, please,” Lin Yu said. “Do you know anything about the people we’re talking about? The only ‘hard work’ they do is poke at a fleX to check their hedge funds, or—even more debilitating—transfer the proceeds after some squillionaire parent dies. They’re not digging ditches.”
“It can be a mistake,” Belle said carefully, “to throw the upper middle class and the ‘über-rich’ in the same boat. The moderately well off may not, as you say, dig ditches. But they often put in quite long hours and may still struggle to pay mortgages and tuition—”
“Not the poor little rich people routine!” Lin Yu cried. “I’ve heard the tear-jerk stories—about how all over DC the affluent can’t afford childcare anymore. Well, the nannies are losing their jobs. I know where my sympathy lies.”
“Ever notice, with these folks,” Tom murmured in Avery’s ear, “how injustice only applies to the hard-up? Nothing unfair can possibly happen to you if you own more than one pair of shoes.”
Having recently earned her doctorate, Lin Yu worked at a nonprofit, the Real American Way (on the left and right alike, outfits trying to co-opt patriotism all sounded the same). Alas, the redistributive policies that RAW promoted—vastly higher property, inheritance, and upper-bracket income taxes; a blanket 2 percent wealth tax on all cash, investments, and tangible assets—were the very policies from which anyone in a position to give money away would recoil, and the organization was chronically underfunded. So on her do-gooder salary, Lin Yu was unlikely to have experienced a vertiginous drop in net worth during the last two months. Like Tom, Avery was queasy about these heedless opinions, which applied exclusively to other people and co
st their advocate nothing. Those ready refills of imported Viognier notwithstanding, Lin Yu’s hosts were another matter. Oh, Avery had no idea how severely their family’s circumstances had been damaged; with his expertise, obviously Lowell handled that side of things, and she’d been too frightened to ask for specifics. Yet she could still feel the wind in her ears, as if riding an elevator in freefall. Making a note to herself that inviting Ryan and Lin Yu had probably been a mistake, she slipped away to sear the fish.
I was telling Avery earlier this evening how much it breaks my heart to see all these panicking bastards scrambling out at the bottom of the market,” Lowell opined at the head of the table.
“If it’s the bottom,” Ryan countered from the foot of the table.
“That very anxiety is a trap,” Lowell said. “Suckers slosh in when the market’s frothy, and freak when it tanks. The key is to keep your nerve. I’ll want credit for this later, Biersdorfer: the dollar’s going to recover and then some. So will the Dow.”
“A century ago,” Ryan said, “the Dow only returned to its pre-Depression valuation after twenty-six years. In that long, you’ll be in your mid-seventies.”
“I’ve had it up to my eyeballs with this superstition that history is repeating itself at a tidy base-ten interval,” Lowell said. “Whole sectors of the economy are hale, and with the dollar so devalued our exports will undercut Vietnam’s.”
Avery wished her husband wouldn’t stab at his bluefin so distractedly; that ginger dressing had come out smashing. And she thirsted for a change of subject. It was all her patients wanted to discuss as well, or the few who showed up: what had happened to their investments. So drear.
Ryan shook his head paternally. “You’re kidding yourself, Stackhouse. Stocks are only headed further down. It took three solid years of unrelenting decline for the Dow to drop to its nadir in late 1932. From 381 to 41, remember? You should get out while you can still rescue some spare change.”
“Thanks for spreading the gloom, Biersdorfer. It drives prices knee-high, making this the time to buy,” Lowell insisted. “I’m scarfing up every depressed large cap I can.”
Avery’s ears pricked up. “You’re what?”
“Picking up bargains. Nothing you don’t do at Macy’s, my dear.” Macy’s came out with an incipient lisp. He’d had a fair bit of wine. Everyone had. The whole evening had been laced with the End of Days hysteria that drove Avery’s younger brother to a muddy field in Gloversville, but which drove normal people to drink.
“I may not know the fine points of our situation,” Avery said, hardly savoring her own tuna, “but gambling whatever pittance is left on more plummeting stocks is insane.”
From the chair opposite, Belle caught Avery’s eye. Trying times maybe, but it wasn’t seemly to conduct marital spats about money at table.
Avery shot her friend a returning glare. Fuck decorum. She and Lowell had three kids in private schools who would all expect, and had a right to expect, Ivy League educations. The mortgage on this townhouse was massive. All that at stake, and what did her husband do? Act optimistic in order to feel optimistic, as if by playing the Pied Piper of Pollyanna he could lead everybody else, and history itself, into la-la land. Usually, he was determined to be right for the sake of his pride. Now he was desperate to be right for the sake of their survival. But really, really needing to be right rather than merely wanting to be right didn’t affect being right, as opposed to fatally off the beam, by an iota.
“The slide has already slowed,” Lowell told his wife.
“If you’re so sure everything will turn out pink, why’d you order me to Chase in November to clean out our accounts? Remember, when they finally re-opened the banks?”
Lowell blushed. She was embarrassing him, in public, on purpose. “What I remember is you didn’t do it.”
“I wasn’t going to spend all day in the rain in a line that snaked around an entire city block, when by the time I got to the counter they’d be out of cash anyway. But you were the one who made fun of everybody afterwards. The ones who stood outside banks in the rain.”
“I only made fun of the people who lined up to pull out their money after the Fed promised to provide liquidity,” Lowell said coldly. “And after Alvarado clarified that bonds may have been voided, but Federal Deposit Insurance remained in force. Before that assurance, it was rational to worry that some banks would fold.”
“They ‘provided liquidity’ by printing money,” Tom said quietly, to no one in particular. “And they’ll cover FDIC claims by printing more.”
“What I’ve found fascinating,” Belle said, diplomatically directing the conversation elsewhere, “is the difference between the way Americans rallied around FDR, and how the public has responded to the gold recall from Alvarado. People are simply refusing to cough it up.”
“I had one patient so indignant,” Avery said, “that she wanted to go out and buy some gold, under the table, just so she could refuse to hand it over.”
“Fortunately, most compliance doesn’t rely on probity and patriotism,” Ryan said. “ETFs, mining stocks, bullion on deposit—the Treasury neatly commandeered everything on the record in one fell swoop.” He smiled. “Compensation was deliciously risible. A stunning laying of waste to what economic survivalists imagined was the ultimate safe bet.”
“Yes, it was like the Darwin Awards,” Lowell said. “Species eliminates ninnies clutching arcane medium of exchange like teddy bear. Man, that poor fool Mark Vandermire must be busted.”
“On the QT,” Avery asked the table, “anyone here slip a tinkling baggie into the rose bed?”
“Theoretically,” Belle said, glancing at Tom, “I can see why some couples might withhold their wedding rings.”
“I really thought Alvarado should have exempted rings,” Avery said.
With a nod toward Ryan and Lin Yu, Lowell said, “The left would have squawked about sports stars and Wall Street wives keeping engagement rings the size of bowling balls.”
“But all that government propaganda,” Tom said, “’bout how we been ‘attacked’ and we all have to ‘pull together’ and make ‘sacrifices’—it hasn’t worked. I loved the InnerTube video of that sumbitch flinging jewelry off the Golden Gate.”
“Some of the pushback is anti-Lat,” Lin Yu said. “Those videos are always of white people. It’s significant that it’s Alvarado’s policy. They won’t abdicate gold to a foreigner.”
“Americans have despised the federal government since way before Alvarado, hon,” Tom said. “The main difference this time is they got good reason. At Justice, we been charged with going after gold scofflaws, and I got to say I’m uncomfortable with the job. I thought I grew up in a country where you could own gold, or silver, or mud, or bancors—whatever stuff you took a fancy to long as it wasn’t, like, heroin. In a truly free country, you should prob’ly be able to buy heroin, too. This policy rubs me the wrong way. I don’t relish being dragged into enforcing it.”
“The US has confiscated assets en masse since the advent of income tax,” Belle countered reasonably; she’d drunk noticeably less than everyone else. “And never mind lousy old money. Historically, Uncle Sam has taken your sons.”
“Speaking of which, there’s a rumor going around,” Lin Yu said, “and it’s leaking from more than one department. I’ve heard the whole reason the administration has called in the gold is to give it to the Chinese. To buy Beijing off. To keep from having a war. To prevent, you know, even an invasion.”
It felt a little awkward. Lin Yu was American born and bred, but she bore the countenance of divided loyalties. Badmouthing Lats or peoples of scale, of course, was beyond the pale. Yet ever since China replaced the US as the world’s largest economy, suspicion or even outright loathing of the Chinese had achieved an unnerving acceptability. It seemed that no matter how right-on America grew, one group or another would be designated as okay to hate. In a pinch, you could round on the bigots themselves—which is why Avery was scrupulous a
bout keeping it secret, even from Lowell, that she hadn’t voted for Alvarado.
“I gather that’s why we didn’t only default on foreign-held debt,” Belle said. “If American investors took an even worse hit, we were less apt to start World War Three.”
“Not sure I’d credit that rumor about the gold, Lin Yu,” Lowell said. “Beijing doesn’t have that big a beef. Turns out the bancor was in the works for years—and Christ, where’s all that American surveillance when you really need it? That’s why Beijing started quietly buying shorter-term securities with their current account surplus. Their dollar holdings were in three-month T-bills by the end, and plenty of the bills had matured. The Chinese were ready to be welshed on. Which is the best evidence yet for their having actively conspired to crash the dollar.”
“’Kay, but …,” Tom said. “Sorry for the cliché: Beijing does still care about face.”
“Screw the gold. Let ’em have it.” Lowell said. “What matters is the bancor. Now, I still think it’ll prove another euro. These ideology-driven currency unions never work, and we could be back to the dollar as the world’s leading reserve currency in a couple of years. But meanwhile prohibiting American companies from holding bancors is catastrophic. Corporations can organize shell companies, but small business is being crucified. How are they supposed to import bancor-denominated commodities?”
“Alvarado is playing a game of brinkmanship.” Everyone turned to the doorway. It was Goog. “He figures if he can deprive even American allies access to the US market, he can strangle the baby currency in its crib. But the American market is smaller comparatively than it used to be. So the question isn’t whether we can live without them, but whether they can live without us.”
The Mandibles Page 10
