by D. R. Bell
Monday, 4/25/2022, 7:07 p.m. PDT
Response came from the Beijing office. Ferguson’s e-mail had been analyzed and found “sixty percent credible.” This must have meant that some of the information could have come from publicly available sources, but there was also information not publicly available, giving credibility to Ferguson having something. Fai actually liked this percentage assigning; it fit into the world of nothing being black and white, only shades of gray. It was difficult for a total stranger with no inside knowledge to get to sixty percent within three days. Fai had at least a reasonable probability proof that Ferguson was involved and that the agents pursuing him from Seattle were on the right trail.
But there was another piece of news from Beijing that added a new dimension to the game. Julius had contacted MSS. He was not happy about Seattle’s attack but still wanted to do business, albeit at double the price. Beijing was concerned that even paying out one man still left the second one to sell to someone else. Human greed thought Fai. Possibly Ferguson got hold of the file and now wanted all the money, not realizing that Julius was alive.
But Fai had to consider a more ominous possibility: that the Julius/Ferguson team continued working together, that they were planning to conduct their business directly with Beijing, and he—Fai—was a puppet to be eliminated as a lesson to the higher-ups. The colonel called in his team, went over the evacuation plan, and told everyone to double the precautions and keep an eye out for any suspicious activity in the area. After letting everyone go, he called Goa Chon back. Goa Chon was an explosives specialist and the colonel told him to wire the house.
After building up the defenses, Hsu went back to his computer. He responded to Ferguson requesting a meeting. Then he made a move in his replay of the Fisher - Spassky 1972 game. It seemed like Spassky had a better option in the thirty-fifth move that could have saved the game for him.
Monday, 4/25/2022, 7:12 p.m. PDT
“What is prudence in the conduct of every private family
can scarce be folly in that of a great kingdom.”
— Adam Smith, The Wealth of the Nations
Frank came in carrying a shoulder bag and wearing a big smile. “It seems you might be able to get your girl back tomorrow. Allow me to open a good bottle of wine in anticipation. I had had my eye on this bottle of Stags Leap Cab ’14 for some time. I brought two just in case, plus a bit of food from a deli on the way.”
As they situated themselves in the living room with wine glasses and small plates, Frank looked at his glass against the light and commented, “A bit of snobbishness that I allow myself. I truly enjoy a nice glass of wine, not just because it became fashionable some time ago. Moving to California was helpful in that sense. I can drive up to Central Coast or take a short flight to Napa. I know it’s a bad thing to say, but thanks to the financial crisis, good wines became cheaper and easier to get. Plus, the weather is great and I am much closer to my children. My ex-wife moved them to the West Coast when she remarried, and I didn’t get to see them nearly enough. The only problem with being retired is boredom. I started losing my joie de vivre. So I very much appreciate you involving me in your adventure. I know our luck will be turning soon. But enough about me.” Frank took a sip and asked James, “What were you talking about before I came? I don’t want to interrupt.”
James laughed. "Believe it or not, we were discussing whether the American people would care about the truth if it’s ugly.”
“And your conclusion?”
“We did not come to one.”
Frank nodded. “I was rereading Alexis de Tocqueville’s Democracy in America. He understood how unique America was, because it built a society that did not evolve around the government. He warned that the danger to such a society comes from within, from acquiescing to a soft tyranny of a benevolent government.”
“What tyranny?” David protested. “We are a democracy!”
Frank shrugged. “You can be a democracy without true liberty. The more people depend on the government, the more society is covered by a net of rules, the more ‘equality under the law’ gives way to ‘fair share and equality of outcome’ while the actual inequality only grows, the less effective is the liberty. Yes, you have democracy in that you go and vote periodically, but the liberty is illusory because the bureaucratic state behaves the same regardless of who nominally is in power.”
“And one way to reduce liberty and allow a bureaucratic state to grow was in spending trillions that we don’t have,” James interjected.
“Spoken like a true old-school economist,” Frank said, and both he and James laughed.
David politely munched on one of the snacks that Frank brought and picked up the conversation. “But we had to spend the money in order to provide essential services.”
James shook his head. “My dear David, how is it fair for the government to spend year after year the money it does not have and has no chance of repaying? Who’s going to pay this debt but the younger generation? Yes, of course, there were people saying that deficits don’t matter. Someone can always find a scientific-looking argument for whatever point of view suits him or her. In the end, economics must be grounded in common sense. Otherwise, it’s just an exercise in perpetuating self-delusion. Throughout history, nations have committed financial folly thinking that they can have something for nothing. We were taking goods from the rest of the world, and we were paying for them with money being created out of thin air. At some point there was a price to be paid, the only question was when and how.”
“But don’t we have to take care of others? Share the wealth? Isn’t this a good, humane thing to do?” David asked.
“I agree that as a society we should take care of those that can’t take care of themselves. But in order to share the wealth, we have to be able to continue creating it. Thomas Jefferson said that a wise government “shall restrain men from injuring one another, but leave them otherwise free to regulate their own pursuits of industry.” And he also warned us that “the natural progress of things is for liberty to yield and government to gain ground.” We kept expanding government’s role. And every time government bureaucrats would get involved in yet another part of our country’s economic life, they would proclaim that it was essential that they continue managing it.”
“Many a revolution started with sharing wealth,” chimed in Frank.
“Yes, and once the looting was over, despots arose. If wealth could be created out of thin air by governments printing money, all countries would be prosperous. Wealth is not there to be handed out in a ‘fair’ manner according to a code that some politician holds. It is created by individuals, not government bureaucrats.”
David shook his head. “I’m sorry, but I always believed that government should help people.”
James tilted his head to one side. “Your heart is in the right place, but it’s the wrong question to ask, at least of an economist. The real question is: how should the government help? As Milton Friedman once said, to maintain a free society you may have to put up with temporary evils rather than try to do something about them and make things worse. When I was teaching, I tried to describe this in the way that young people could relate. Remember how in The Lord of the Rings Gandalf refused to take the Ring of Power because he believed he’d use it to do good but the power he would wield would lead to terrible results?”
“Yes,” David said, “I remember that part.” He figured by now that James had quotes for every occasion.
“Gandalf knew that he did not have the wisdom to wield such power. Nobody does. Most attempts to redesign economic systems started with a desire to do good, but the results were almost invariably bad. Ability to run the state is like having this ring of power. It’s a folly, a comforting but false philosophy, to assume that the business of running a modern economy and finance can be left to a small group. Just as Adam Smith recognized long time ago.”
“James, our young friend is talking about compassionate government. Are you saying t
here is no role for compassion in the matters of the state?” Frank was enjoying the discussion. He opened a second bottle, his normally pale cheeks flushed with color.
“OK. You tell me: how far should the state go in taking care of its subjects and at what price?”
“Well, I am all for compassion and ethical behavior,” Frank said. “We have to do the right thing because we have to do the right thing.”
James shook his head. “Compassion is a noble feeling, and it works just fine in simple situations. But in the complexity of economic life, the answers are not quite so obvious. The government is not capable of determining every single decision in a way so as to increase the overall welfare. Noble intentions won’t compensate for the impossibility of the task. How do we decide which compassion is wise and which is foolish?”
Frank refilled their glasses. “Perhaps the measure of wise compassion is whether it produces the maximum well-being for everyone involved.”
“And how would one decide on what produces the maximum well-being? It’s not possible for anyone to possess all the virtue and knowledge in order to do that.”
Frank smiled. “Yes, I know. But it sure has not stopped people from trying. I guess you’re saying that the power of unexamined virtue is a dangerous thing.”
James nodded. “It’s a paradox that we have to live with. Democracy is like a plant that can only flourish in the right conditions. If we don’t allow for inequality, democracy dies. But it will also die if the inequality becomes too extreme. If we don’t let people fully exercise their material strivings, the society loses the vitality that only comes from self-interest. But if we lack the spiritual strivings, the material pursuit will destroy the society through greed. Human nature needs both. And when we try to transcend that nature, no matter the intent, we create nightmares.”
He smiled and finished his wine. “David, don’t pay too much attention to us. We are two tipsy and cranky old guys quoting a bunch of dead men. I think that crankiness and tendency to preach rise in proportion to the dimming of sexual desire, that’s why old people are this way. People have tried to master society for thousands of years, and will probably always continue. In the end, the Caesars are forgotten while the thinkers and the writers are remembered.”
Frank stood up. “Let’s drink to that. And to those that seek the truth and refuse to conform. Thank you for the company. It’s getting late, and I suspect we’ll have a busy day tomorrow.”
Tuesday, 4/26/2022, 8:58 a.m. PDT
A car with only a driver left the house at about 8:20. One of the unmarked cars was following it now. The LAPD management was hesitating, but Megrano did not want to wait any longer. The two adjacent houses showed no sign of occupancy and most likely were empty. He and Chander and half a dozen SWAT officers entered them through the neighboring houses, while trying to keep the residents there quiet. Megrano tapped his bulletproof vest for good luck and gave a signal.
He, Chander, and the SWAT team climbed the walls on both sides and surrounded the house. Megrano knocked on the door. “Police! Open Up!” There was no answer. They broke down the door and rushed inside with the guns drawn.
Tuesday, 4/26/2022, 9:26 a.m. PDT
James and David were on pins and needles that morning, waiting for a call from Megrano. The night before, David tried to continue reading The Master and Margarita but found it impossible to focus. He got through a couple of chapters in the second part, finally meeting Margarita herself. As James had told him, she sold her soul to Woland and agreed to host the Great Ball, in hopes of reuniting with the Master. David could not go further.
He kept checking e-mail, but there was nothing from Thomas Mann aka Julius. They stayed around Bowen’s house, absentmindedly trying to research Forex trading intricacies, but their minds were elsewhere. A TV was droning on in the background, tuned to Channel Five, a local station.
Rising excitement in an anchor’s voice penetrated David’s consciousness. “Special report!” was breathlessly announced by a blonde woman in her thirties, clearly not accustomed to big news happening during her shift. “Big explosion in Malibu!” Video from a hovering helicopter showed a row of houses on a narrow strip of land between PCH and the ocean. A big plume of smoke rose from one of the houses, surrounded by cars, fire engines, and ambulances. The anchor screeched, “PCH is closed in both directions, the number of casualties unknown!”
David felt like a bag of ice was poured over his body. “Megrano and Maggie,” he murmured, stunned.
He and James watched the TV silently. The picture on the screen switched to a couple living a block away. Presumably this was as close as a reporter could get. The couple appeared to be in their fifties and looked happy to be on TV, but they obviously had no clue what was going on, and had nothing to say except, “There was a big explosion!” The reporter kept extending their fifteen minutes of fame by asking inane questions such as, “How big? How would you compare it to an aircraft flying over?”
Bowen clearly could not take it anymore and stormed out of the living room.
They tried calling SMPD, asking for Megrano and Chander, to no avail. Unconfirmed reports started appearing on the Internet that it was a SWAT operation gone badly, with police suffering significant casualties. Frank called, and after him, Oleg.
Then a response came from Thomas Mann / Julius: “So, you survived so far. Who is the woman and why should I care?”
David was not in the mood: “She is just an innocent person who was caught in this. You have what they want. How much is human life worth?”
The man on the other end must have been at his computer because the answer came back quickly: “Is she your girlfriend?”
David: “No. Just a person who was trying to help me when I was running for my life.”
A reply came: “I am sorry to hear that. But I am not sure what I can do to help.” David: “You have the information they need. You can trade with them for her life.”
After a few minutes: “Sorry, I can’t do that.”
David: “Why not?” He waited for the next reply, but the conversation was over.
Instead, an e-mail came from acegik: “Now that your attack has failed, I reiterate my suggestion to meet. If we don’t hear from you, in twenty-four hours, we will kill your associate.”
Tuesday, 4/26/2022, 11:08 a.m. PDT
“In the midst of chaos, there is also opportunity.”
— Sun-Tzu, The Art of War
Fai Hsu liked good execution, and he liked being able to outsmart his opponent. Looking at a TV screen in the Hidden Hills safe house, he was pleased with accomplishing both. Thanks to his anticipation of the opponent’s move, they were able to detect surveillance of the Malibu house early in the morning. And thanks to their preparation the night before, they snuck out right under the noses of the attackers. It also helped that Beijing warned them that based on the intercepted computer traffic at LAPD there was an attack coming. By then Hsu’s team was ready to go. They left in the SUV that appeared to have only one person, but five others, including Margarita Sappin, were hidden on the floor of the second and third rows. One person was on rotation of watching Ferguson’s house, and two getaway cars were waiting in Topanga Mall’s parking structure. These two people left the day before and stayed in Hidden Hills. One of the cars cut off the pursuers in the structure. By the time police found the SUV, it was parked and empty while the team was halfway to the other safe house. Fai knew he inflicted harm on Ferguson’s team. His superiors in Beijing would know about this success and his star would rise. Perhaps he wouldn’t have to go into the field anymore. “General Hsu” had a nice ring to it.
He’d considered getting rid of Sappin back in Malibu. There was additional risk in bringing her along, and he was not a man to take on unnecessary risks. But he knew she was of value to Ferguson and the game was not over yet. Now he was glad he’d kept her alive, he had an extra piece to play in the match. Hsu felt more comfortable than at any point since the start of this operation. H
e had the upper hand.
It was good to feel this way. Perhaps this operation would earn him the long-awaited promotion. He tried “General Hsu” on his tongue. He was a winner. And so was his country. His parents never finished high school and toiled their lives in poverty. His grandparents lived and died in their villages; no schools for them at all. His great-grandmother lost her family in the Nanking Massacre in 1937. Foreigners had dominated his country for centuries. But now … after the USA broke up, China would be unquestionably the strongest country in the world, with the largest economy and the most sought-after currency. And he would join the top echelon, the select few that would determine the world’s affairs. “General Hsu,” he tried again.
Tuesday, 4/26/2022, 11:47 a.m. PDT
David found James in the kitchen and told him about the messages. James gave him a dejected nod. David sat at the table, took a few deep breaths, and reminded himself to focus. One step at a time. They needed more Schulmann information to keep the game going, perhaps even to trade information for Maggie. Assuming she was still alive, thinking positive. They’d managed to convince the kidnappers earlier that they had something, but they wouldn’t get much further by blindly searching the Internet, at least not in the time they had. They had to find some actual files of Schulmann’s. David figured he probably hid his work somewhere safe but might have left some work-in-progress, downloads of his research at SEC. Of course he’d been dead for almost two years. David thought, I wonder what are the archive policies at SEC?
David asked James to get Frank on the phone. “Frank? David and James here. Did you know anyone who worked in IT at SEC?”
After a brief pause, Frank said, “Yes, SEC has a large Office of Information Technology that runs the whole EDGAR system, processing financial information from all listed US companies. I worked with them often and know a few people there. I was friendly with Fred Womack, their second-in-command. But he was only a few years younger than me. I don’t know if he is still there. Why are you asking?”