THAT NIGHT, TOM KNOWLES was due as guest of honor at a dinner for Republican Party grandees. When the event had first been arranged, in the days when the Republicans had looked to be cruising to their first sixty-plus majority in the Senate since 2004, it had been conceived as an election-night celebration. Instead, it was going to be a wake. Many of the attendees had voted in their home states that morning and were flying in to be at the dinner with the prospect of a loss that appeared likely to put the number of Republican senators down towards fifty. There was even an outside chance the party would lose its majority.
At six o’clock that evening, Tom Knowles sat down in the Oval Office with Josh Bentner, his chief speechwriter, and Ed Abrahams to look over the speech he would be giving.
Bentner had spent just about the whole day on it. The speech was meant to be only about fifteen minutes long but even for a speechwriter as talented as him it was a challenge. He had shown Abrahams five drafts during the day and each time it wasn’t right. Knowles had considered canceling his attendance, but Ed Abrahams was dead set against that. He thought it would be seen as an act of cowardice that would seriously damage him within the party. But how much responsibility should he take? How much blame should he volunteer to shoulder? The truth was, Knowles felt that his responsibility for the implosion of Fidelian and the collapse it had inflicted on the markets over the last couple of days was minimal, if there was any responsibility there at all. There was no failure of regulation, no executive dereliction. He didn’t feel there was much more he could have done. No one could control the markets, not even the president. But the people who would be sitting in the room that night wouldn’t be just any audience. Their opinions, their attitudes, the willingness to put their personal prestige, political networks, time and money behind alternative candidates would play a big part in determining the kind of challenge he would face for the nomination in two years’ time. If this night had delivered sixty Senate seats, he would likely have got the nomination unopposed, a slam dunk, as Ed Abrahams liked to say. It wasn’t going to be a slam dunk now.
They needed to see humility. It takes a lot to turn a party against an incumbent president, but perceived arrogance in the face of defeat is one of the things that will do it. They also needed to see that he envisaged a way out. If a movement wasn’t going to start right now at the highest level of the party to put forward an alternative candidate for the nomination, they needed to feel strongly that in six months’ time the turmoil on the markets was going to look like a transient blip, not the turning point that ended eleven successive quarters of economic growth. Acknowledge some level of responsibility without tainting yourself as an electoral liability. Give a strong, positive view of the future without trivializing what had had happened that very day.
He picked up the latest draft of the speech and began to work on it with Abrahams and Bentner.
At six o’clock, Marion Ellman was at the traditional Election Day cocktail party given by the American UN representative for foreign ambassadors. She mingled dutifully, feeling like she needed the task of hosting the event about as much as she needed a trip to the dentist. François Dubigny engaged her in one of his flirtatious disquisitions. She excused herself to go talk to the new Saudi Arabian ambassador. Out of the corner of her eye she saw a huddle of Latin American ambassadors. She thought a couple of them were smirking at her. The party was a trial, to say the least.
Across town, Ed Grey was still in his office, still on the phone, and would be for hours. Red-eyed, exhausted, for him, election day was a battle for survival.
28
TOM KNOWLES RODE back to the White House with Sarah, who had been with him at the dinner.
The president’s relationship with his wife was pretty much a working relationship, had been for years. There had been infidelities, thankfully with women who turned out to be discreet even when the affairs were over. But Sarah had found out about them. At one point they had considered divorce, come right to the brink. Fortunately they stepped back. It wasn’t impossible that he might have become governor of Nevada as a single, divorced man with a history of infidelity, but it was inconceivable that he would have made it anywhere near the White House. Sarah herself had causes she cared for, and being first lady of Nevada, and then of the country, gave her opportunities she wouldn’t have had otherwise. She worked tirelessly on behalf of returned war veterans. She campaigned for rehabilitation programs for convicted drug offenders. Tom respected her for her work. He respected her for lots of things. It was possible that after they left the White House they would get divorced. On the other hand, they might not. They had settled into a mutually convenient coexistence that sometimes, not often, flared into something warmer.
‘I thought your speech was good,’ she said. ‘You hit the right notes.’
Knowles smiled ruefully. The mood at the dinner had been more wake than post-mortem, but that would come soon enough. People hadn’t said what they were thinking – not to his face, anyway. Over the next few days Ed Abrahams would work his networks to gauge the way reaction in the party was really developing.
They went separate ways at the White House, Sarah to the residence floor, Knowles to the West Wing, where he found Abrahams, Ruiz-Kellerman and Devlin all sitting in Roberta’s office, watching the results coming in. The remains of pizzas and sodas and coffees were all over the room.
He settled into a chair.
‘Where are we?’ he said.
‘Logan’s conceded in Florida,’ said Devlin.
‘What about Morrison?’
‘He’s not going to win. Buckley’s safe.’
‘Ogden?’
Devlin shook her head.
‘Looks like Anders in Ohio is safe,’ said Ruiz-Kellerman.
‘Were we worried about Anders?’
‘After yesterday, we were.’
‘Jesus Christ. What about the House?’
‘That’s borderline. The networks are calling it four to five seats either way. From the polls I’ve seen, I agree. It’s too close to call.’
Knowles let out a long breath. He looked at Abrahams. ‘This is bad.’
Abrahams nodded. ‘This is fucking bad.’
The president watched a bunch of pundits on the screen equivocating over who was going to control the House of Representatives.
Abrahams had spoken to Jack Harris, national chairman of the Republican Party.
‘What did he say?’ asked Knowles.
‘Nothing. What could he say? He’ll call you tomorrow.’
There was silence. The atmosphere in the room was grim.
‘Well, who needs sixty seats in the Senate?’ said Abrahams. ‘It’d just give Hotchkiss another lever to pull. He’d threaten to vote against us and pull his little band of acolytes every time he thought it would do him good.’
‘He already does that,’ said Devlin.
Abrahams smiled. ‘True.’
‘He’s going to love this. He’s going to fucking love this.’
‘I think we should assume his campaign starts today.’
‘So does ours,’ said Abrahams. ‘We’ve got two years to put this right. As far as Hotchkiss is concerned, we paint him as a rebel. Disloyal. He’ll go overboard. That’s what he’s like. Every time he makes trouble, we slam him.’
‘Ed,’ said Devlin, ‘his constituency wants him to be a rebel. That’s what they like about him. All those redneck anti-abortion gunslinging evangelical bigots don’t have any problem at all with him bringing our programs down.’
Abrahams laughed. ‘Roberta, you’re talking about the soul of our party! Look, when we had fifty-eight in the Senate he could play his games and it didn’t make a difference one way or the other. Now he does that and our programs fail. He does that, he’s got to pay a price. In their gut, Republicans hate disloyalty. His constituency might like it but everyone else won’t. Now, if he was a Democrat, they’d all love him for it. Not us. That’s how we get him.’
Tom Knowles stared di
sconsolately at the screen. ‘We got any good news about Uganda?’ he said suddenly. ‘Every day I get these reports and nothing’s happening. Weren’t we going to get some good news?’
‘Just as well we didn’t. Anything we got would have got lost in the noise of the last couple of days.’
‘We could use some now.’ Knowles looked at Abrahams. ‘Can we do something about that?’
‘I’ll talk to Gary.’
The pundits on the screen kept pontificating. There were four of them from various parts of the country on a split screen and the anchor was trying to keep control of the discussion.
‘Did anyone talk to Custler to find out why they didn’t take the offer?’ asked Knowles.
‘Susan’s talking to him. It’s obvious though, isn’t it? The markets worked it out. The Chinese let it fail. You look at what the market did today. Anything they could find with big Chinese government ownership, they dumped.’
‘Is that what happened?’
Devlin nodded. ‘Serves the Chinese right. Crashes the value of their holdings.’
‘What happened in Shanghai?’
‘Their market was down four per cent.’
‘Their investment funds will be buying to keep prices up,’ said Abrahams. ‘It’s an unwritten law. Shanghai never falls by more than four per cent in a day.’
Knowles still couldn’t understand why the Chinese president had refused to step in. Having to stem the fall in Shanghai by state intervention, however he tried to conceal it, did him no favors.
‘Zhang could definitely have made the PIC do what he wanted, right? Hell, I got the toughest bankers on Wall Street to make an offer for a bank none of them wanted to touch. And I told him what would happen. I told him there was no more. You heard me tell him.’
‘Maybe he’s trying to send a message,’ said Devlin.
‘What’s the message? Don’t call me up? Don’t disturb me after 9pm?’ Knowles paused. He found that suddenly he was fuming. ‘That guy, I tell you, I just hate dealing with that guy. If there’s one leader I’d like to send an exploding cigar to, it’s Zhang. Anyone ever seen Zhang laugh? It’s like they’ve botoxed him round the mouth.’
Ed Abrahams chuckled.
‘Probably wouldn’t smoke the damn thing anyway even if I did send him one,’ muttered Knowles.
Abrahams laughed out loud.
‘I wish you were the guy who had to talk to him, Ed. I’d hand it over to you gladly.’
‘I don’t think President Zhang would appreciate that.’
‘I don’t think he would either. I don’t think he appreciates anything.’ Knowles looked at the screen, which was showing a schematic of the projected seats in the House of Representatives with a surge of blue and the shrinking Republican majority in red. Knowles stabbed his finger at it. ‘You know, you’re forced to the conclusion that this was a deliberate, carefully planned conspiracy to make that happen.’
‘It’s an interference with our democratic process,’ said Abrahams, utterly serious now.
‘It is. It’s outrageous.’
‘Outrageous.’
‘What are we going to do about it?’
‘That’s something we need to figure out.’
There was silence.
‘Do we have any idea who leaked about Fidelian refusing the offer?’ asked Ruiz-Kellerman.
‘It was always going to come out,’ said Abrahams. ‘Enough people knew about it and the Street would have figured out there must have been a rescue attempt. The really damaging leak would be if they knew we’d spoken to Zhang. That would make us look bad. First, we have to go calling a foreign leader for help, then he refuses to give it.’
Knowles nodded. If that came out, it would make him look terrible.
29
ON THE MORNING after the election, with the sense of political turmoil growing by the hour, Marion Ellman was pulled out of her regular staff meeting for a conference call with Bob Livingstone, who was on a visit to the Philippines. Doug Havering, the deputy secretary of state, was on the phone from Washington, together with Steve Haskell in Beijing. A National Security Council meeting had been scheduled for Friday to discuss the events leading up to the Fidelian bankruptcy and Bob Livingstone wanted to put a State Department paper to the president ahead of the meeting.
Marion didn’t know why a matter like that would be an issue for the National Security Council or why State should be called on to give a view. Within the State Department, only Livingstone and the deputy secretary knew what had taken place between Tom Knowles and the Chinese president in the hours before Fidelian failed. Five minutes after the call started, when Livingstone had given his summary of events, Marion knew as well.
By the time she got home that night, having been waylaid by the British and Dutch ambassadors in a corridor of the UN building for an impromptu meeting on the South Africa resolution, Daniel was asleep and Ella was just about ready for bed. Marion read to her a little before she went to sleep. Then she checked her email and found a draft paper for the president in her inbox. She wouldn’t get any other time to look at it so she sat down to work on it right away with a warmed-up dinner at her desk. By the time she was done another couple of hours had gone by.
Dave was in bed, reading a book.
He looked up as she came in. ‘You done?’
She nodded and sat down on the bed. ‘I’m beat.’
‘You know our net worth fell another ten per cent today.’
‘Really?’
‘Yeah. That makes us around twenty-five per cent down on the week. Not bad. I thought your boss might want to know. What’s his name again?’ Dave clicked his fingers. ‘Knowles? Somebody Knowles.’
‘I’ll be sure to tell him,’ said Marion.
‘You know, you should read this.’ Dave closed the book and tossed it across to her.
It was Joel Ehrenreich’s book, which had arrived a couple of days earlier. Marion had left it on her desk, fully intending to look at it, but hadn’t had a moment.
‘It’s good,’ said Dave.
‘Have you read it?’
‘Parts. You should read chapter 5.’
‘Is that one of the ones Joel mentioned?’
Dave shook his head. ‘Trust me, you should read it.’
She got ready and came back to bed. Dave had turned on the TV and was watching it with the volume low. Joel’s book was still on the bed. She was tired but picked it up anyway. She’d at least glance at it, she thought, before she went to sleep.
The next time she looked up, Dave was lying asleep, mouth open, and the TV was showing the closing credits of the Late Show.
Chapter 5 was one of a number in which Joel dissected the strands of global enmeshment, as he called them. It dealt with what he called the corporate strand. It was customary, Joel argued, to think that the sphere of corporate transnational companies was the one most free of national influence. It was efficiency-maximizing and nation-neutral, stretching across political boundaries in search of the lowest costs and highest profits. Yet in reality, on one critical criterion, this wasn’t the case. An analysis of a hundred publicly owned US-originated transnational corporations across all economic sectors, none of which had any US government ownership, showed that fewer than twenty were entirely free of known ownership by foreign national investment funds, and over thirty had ownership exceeding twenty per cent – enough, in most instances, for those owners to exert a prime if not controlling interest over the company. The chapter went on to outline the evolution of this situation: the avid acquisition of basement-priced stock by sovereign investment funds in the aftermath of the financial crisis; the provision of capital to enterprises hungry for funding as the upturn started; the continuing incremental accumulation of stakes in key corporations as the recovery gathered pace and surpluses built in oil-producing countries like the Gulf states and manufacturer-exporters such as China; and the tacit acquiescence by western governments in this program of acquisition in exchange for sales of t
he huge volumes of government bonds that were issued in the years during and after the recession.
In effect, Ehrenreich argued, the last decade had seen a massive recycling of the profits from western consumption obtained by the world’s oil producers and manufacturer-exporters into ownership of the west’s major businesses by state-owned funds, creating a situation in which the main economic engines and wealth creators of the free markets of the developed world were, to an unprecedented degree, government-owned. What the US government had never wanted to have – state ownership of private enterprise within the United States – had been achieved by the governments of Saudi Arabia, Abu Dhabi, China, Russia, Singapore and Kuwait. In benign conditions, this was unlikely to be an issue. But who could tell how these governments might use these holdings in conditions of stress? The world had sleepwalked into a situation in which the politics of global enmeshment, with all its tensions and potential flashpoints, was embedded deep inside the world’s major transnational corporations.
Ehrenreich’s point wasn’t that this shouldn’t have happened, or that it should be reversed. The reality of free markets was that in order to function as markets they had to be free. His point was that this situation would create an inevitable series of tensions so long as the world’s global governance was unaligned with this and other thickening strands of global enmeshment. Every one of these strands was like a fault line. Sooner or later, if governance didn’t come into line with them, the tension in one of these faults would cause a quake.
Dave looked around sleepily. ‘You still reading?’
‘I’m done,’ said Marion. She closed the book and put it on her bedside table.
Dave turned off the TV. ‘What do you think? I’m not sure if he’s made a point of incredible insight or if he’s talking out of his ass.’
End Game Page 21
