The Return of Elliott Eastman

by Ryan, Ignatius

  Later that same afternoon the heads of all the major banks held a news conference. Blankenship was the spokesperson, flanked by the rest of his cronies. He read from a prepared text.

  “Due to the nature of the economic situation in the United States, what some call the ‘jobless recovery’ or ‘The Great Recession’, we at all the major banks as of this moment are reducing the interest rates on all outstanding credit card balances to 7%. It is our way of saying, ‘we understand, America’. We’re all hurting and we’ll do our part. It is our intention to hold these rates this low for at least three years, and possibly more if we can.”

  Not one of the faces behind him, nor Blankenship himself, showed any great joy in the announcement. Each anticipated their vast holdings of company stock would plummet. Some had even sold off immense numbers of shares. Their fears proved to be well founded. Investors howled. By late that afternoon even the blue-chip stalwart Bank of America had seen its shares fall from $51 to a low of $38 before rebounding to $42.

  Something little watched in the aftermath of these two huge announcements was a statement by the head of Sallie Mae that he was reducing the rates on all the outstanding student loans to 7% as well. Kenny Borel looked equally as uncomfortable as the bankers had.

  Eddie Kelley and James Lally, still ensconced at the Comfort Inn, didn’t miss the speech. They jumped, whooped, hollered and gave each other high fives.

  Chapter Fourteen

  Elliott Eastman groaned as his cell phone on the night stand rang. It was five in the morning. He pressed the button and said, “Hello, Elliott speaking.”

  “Can you hold for a moment sir? The President would like to speak with you.”

  Leaning back on his pillows Elliott explored his right side with his hand, pressing in here and there to determine the extent of the area where pain registered. As his hand slipped below his ribs he gasped in pain.

  The President came on the line at that moment and heard the gasp.

  “Is everything okay Elliott?”

  “Yes, it’s fine. Good morning, Mr. President.”

  “I wanted to pass along the good news. I’ve spoken at length with my cabinet and advisors. We’re going forward with the Transaction Fee Bill on one condition. I’d like to meet with the chairman of the Securities and Exchange Commission and you at the White House at your earliest convenience. I would also like to hear from your experts from Harvard, Stanford and MIT. I want to hear it straight from Sam Goldman that he backs the idea. I’ll have the head of the Treasury Department and probably the chairman of the Congressional Budget Office here as well.”

  Elliott was silent for a moment and then said softly, “I’ll be there Paul, but I was hoping to keep my name out of this so the fewer folks you invite the better. They can still vet the plan in great detail after we have concluded our meeting.”

  The President was silent for a moment and then said, “I understand your wish to remain anonymous, but perhaps you can be an impartial observer and merely say a few words. I promise your name will not be bandied about to the media.”

  “Thank you, I think it’s important I keep a low profile. Paul, I have a question. Was it the ten million dollar donation to your re-election that swayed you?”

  The President paused again.

  “I’d be lying if I said no, but it’s more than that. Did you see Blankenship’s speech last night? They’re stepping up. If the banks are stepping up then now might be the time to cut the oil company and farm subsidies. It might be time to go for the whole economic package. I could be remembered as the president who finally brought it all together, the president who brought us back from the brink. I’ll be honest with you Elliott, I’ve seen the numbers. We are on the brink. This is the time and the place to get America back to what it should have been all along, and this is the way to do it, with big, bold ideas. The Transaction Fee will be the centerpiece. I’ll be honest, I’ve had some of my people explore the numbers and it looks very promising. It looks as though what you have suggested is easily within our grasp and doesn’t impact the average Joe.”

  “Okay, you don’t need to be speechifying to me. You already had my vote, but don’t forget the spending cuts. It’s the other side of the bill and is equally important.”

  President Paul White laughed more freely than he had in a long time. It was good to hear, Elliott thought.

  “Okay, okay. I’ll contact Sam Goldman at the SEC and see when he can make it and get back to you.”

  A short while later Elliott was in the shower, having taken another six Advil, and in spite of the pain actually found himself whistling softly. The president was on board!

  Chapter Fifteen

  The response was overwhelming. Within twenty four hours, thirteen thousand former prisoners had reported to the nearest police station. An equal number of parolees inquired as to whether they might be eligible for some of the training programs. Robert Dale, the lawyer who had initiated the news conference, duly completed the purchase of the former prison and handed off the responsibility for hiring the necessary contractors to modify the existing structures to an architectural firm. A team of hand-picked former educators made recommendations for the hiring of teachers, administrators, personal trainers and health technicians.

  Again Elliott’s army of writers began expounding in various forms of media regarding the amazing willingness of people to try to better themselves. On the other end of the spectrum, the right wing argued the case that it was the prospect of reduced sentences that was the single biggest motivator behind the surprising response of the escapees to turn themselves in. This angered Elliott to such a degree that he brought three dozen mobile classrooms onto the prison grounds and took in an additional five thousand parolees who sought free educational opportunities.

  Most of the evening news programs carried it as the lead story.

  Chapter Sixteen

  Samuel Goldman, the head of the Securities and Exchange Commission, and Elliott Eastman were ushered into a closed door session in the White House Situation Room. An enormous 38 foot long highly lacquered Red Oak table dominated the room. It could easily seat eighteen people to a side. The walls were adorned with no less than a dozen fifty inch Hi-Def television screens with a full video set up on the far wall. Pitchers of ice water and glasses dotted the table.

  Elliott recognized most of the faces of the men already around the table. Introductions were made and he was offered a cup of coffee. It was a virtual who’s who of the Washington financial world. The Secretary of the Treasury Anthony LaScala was there as well as the Chairman of the Federal Reserve Ken Kenake, the President and Vice President, several scholars familiar with constitutional law, and leading economists including Paul Crugmann. The room was abuzz in conversation in low tones until the President tapped the side of his coffee cup with his spoon.

  “Gentlemen, you all know why I’ve called such a hasty meeting. Obviously I feel it is of the utmost importance to review this proposal in depth before proceeding. I believe it would be best for the esteemed Mr. Elliott Eastman to open the meeting by reiterating his proposal in great detail.”

  Elliott gave the President a look as if to say “what part of low profile did we not understand?”

  Most of the men in the room knew the story of the Master Sergeant. He’d refused many an offer of advancement, many a suggestion by his command officers that a rank of colonel or at least lieutenant was more appropriate for him. He’d refused them all to remain in the field with his men. That is until he was badly injured, had the lower portion of his right leg removed, and was forced to leave the service. Since then he’d become vastly wealthy and earned a reputation in the Senate as a tenacious fighter for the rights of the common man.

  The President took a seat while Elliott set aside the notepad he had in front of him, opened his brief case, pulled out a thick manila folder and set it on the table.

  “Perhaps a little back ground is in order before commencing on the nuts and bolts of the plan.
I’ve had my staff working on various issues for the past few months, and they are some of the brightest minds in the nation. A staff, I might add, consisting of some of the best and brightest from Harvard, Stanford and MIT. Together they’ve determined the single greatest threat to our national security is our massive, and I might add growing, national debt. Foreigners could stop buying our treasuries, and they are in discussion to do just that, leaning towards a currency basket including the British pound, the Chinese Yuan and others. If that were to happen our interest rates, in order to make our currency more attractive to foreign investors, would soar to 8% or perhaps 9%, or even higher. This would crush our economy. Lending would cease. No homes, cars, or appliances would be sold. Short term borrowing for company finance, new machinery and payroll needs would stop. Essentially our economy would grind to a halt. Within six months starvation, food riots and general anarchy would ensue. Now bear in mind, to pay off 18 trillion in debt simply cannot be done by raising taxes. The tax burden would be a crushing weight on the common man and this scenario leads to the same result, anarchy. This team of brilliant economists came up with a new source of tax revenue, a very modest transaction fee I might add, that when coupled with some sensible spending cuts would eliminate our debt within five to seven years. I’ll repeat: it would eliminate our debt in seven years, possibly less.”

  Elliott stopped speaking for a moment and studied the faces turned towards him. He opened the folder in front of him and handed a single sheet of paper to each man in the room.

  “You will find before you a basic statement addressing a flat fee transaction tax on all stock transactions on the two largest U.S. stock markets; the NASDAQ and the New York Stock Exchanges. Recent computations suggest there are 928 million daily transactions in the U.S. with a buyer and seller for each side. The fee structure is $10 for trades over $1000, $100 for trades over $100,000 and $1000 for trades over $1,000,000. These fees will also apply for the futures and derivatives markets which amount to $703 trillion worldwide each year and are growing. This will generate almost 1.4 trillion dollars a year in additional revenue which will be applied first to the national debt and then to Social Security.”

  Ken Kenake, the Federal Reserve Chairman and former CEO of JP Morgan interrupted saying, “you must realize that almost every president since Ron Reagan has considered such a tax and shelved it.”

  “I’m aware of that. The World Futures Industry indicates there were 3.961 billion daily futures contracts executed in 2016, the last year for which figures are available. Of that, 42% were originated in the U.S., or 1, 653 billion contracts, each worth many millions of dollars. A $1000 transaction fee on each of them, an amount they wouldn’t even feel, would generate another one and a half trillion dollars annually. This is a vastly different world than the one Ron Reagan faced. There are five trillion dollars in dollar foreign exchange transactions daily. Commodities, another two trillion daily trades, derivatives, another fifteen trillion dollars in trades and mind you those are daily trades. Half the products we’re discussing didn’t even exist when Reagan was alive. JP Morgan alone holds 90 trillion in derivative contracts. Think about that gentlemen. That’s six times the entire Gross National Product of the U.S. It is a changed world. We are awash in capital and a lot of it, probably close to 60%, isn’t taxed at all.”

  There were murmurs around the table.

  Ken Kenake spoke up. “You do realize that Sweden tried the very thing you’re suggesting and they lost most of their derivative and bond trading to the London exchanges.”

  “I’m aware of that situation. That was in 1995, a few lifetimes ago when the total world and derivative volume was $17 trillion. Now it is $703 trillion. There must be great profit for that market to grow so huge in less than two decades. Sweden is a small country located quite close to London, one of the biggest financial centers in the world. If companies want to move out of the US because of a miniscule transaction fee so be it, but they will not be allowed access to our capitol markets. I think they’ll see the light and pay the fee. Now most of the world is in favor of a transaction fee. In 2011, before Greece, Spain and Portugal defaulted on their debt; the whole Euro zone was pushing for a transaction fee to solve their financial issues. US Treasury Secretary Tim Guttner shot it down. They needed the US to participate and we punted. The Euro zone almost went ahead on their own and imposed a transaction fee, but in the end couldn’t put it together. We all know how Europe suffered after that.”

  “Still, Sweden was a failed experiment,” Kenake insisted.

  “Ken, I understand there are going to be reservations, but most of those have been generated by the financial community. In 2010 350 economists, including Nobel Laureate Joseph Stiglitz and Jeffery Sachs, from 35 countries signed a letter urging the G-20 to adopt a financial transaction fee. Angela Merkel of Germany, god rest her soul, Gordon Brown of England and Nicholas Sarkozy of France all came out in favor of the fee approach. Frankly, it’s only the US and their enormously influential financial sector that stands in the way of successfully implementing this plan.”

  Elliott concluded with a sharp glance at the Treasury Secretary.

  “Duly noted,” Kenake said.

  “Now, included in this proposal would be a sunset provision, probably about seven year’s duration or until the deficit is eliminated. Although, I will add, I have spoken with the President,” he nodded in Paul Whites direction, “and he and I are personally in favor of extending it for the purpose of making Social Security solvent again. This would serve two goals; addressing the current crisis with Social Security and garnering the popular vote in this country.”

  “Gentlemen, and please correct me if I am wrong Mr. President, but I believe the President stands ready to make this the centerpiece of his re-election campaign, but there is another part of the plan. I’ve spoken with Bob Gates, the former Secretary of Defense, and he stands ready to cross the country giving stump speeches in support of what we intend to call the ‘War on the Deficit.’”

  Elliott paused for a moment and took a sip of water.

  “This is the other side of the ledger,” Elliott said pulling a second sheaf of papers from his brief case.

  “That is cuts to the spending side of the ledger. Do you know we have 1,118 military bases around the world? Again, I’ve spoken with Bob Gates and Secretary of Defense Bruce Holland and they are in agreement that almost half of these are redundant and superfluous. Hell, just one of our super carriers has more firepower and personnel than many of these bases. The savings from eliminating just four hundred of these bases is close to three hundred billion a year and we must not stop there. We must dust off some of the cuts that have been proposed time and time again over the years. Why do we send three billion a year to Pakistan, a country that reviles us, 1.3 billion to Egypt, six hundred million a year to Colombia, as well as many others? Those should go immediately. Personally I’m in favor of eliminating farm subsidies that would save 25 billion a year. Oil companies don’t need subsidies and tax credits from the American people. I’ve spoken with Dick Henghold, Director of the Office of Management and Budget. He and the President’s staff are putting together some numbers, but I imagine it could come close to two trillion a year in savings if properly enacted. I’m leaving the scope of the cuts up to the President and his staff, but I think cuts are a mandatory part of the whole package.

  “In summary, our proposal to the American people is decisive. It’s a massive source of revenue enhancement, but not on the backs of the average American family. In fact, it’s on those they perceive as fat cats, the money guys shuffling trillions each day, so it’s painless to the American people and it’s temporary. Seven years is the blink of an eye in the history of a nation. This is an idea whose time has come. Thank you very much.”

  Elliott sat down, exhaustion creeping into every muscle in his body. Again a sharp pain like a punch in the gut hit his right side. He bent forward slightly in his seat. Bob Gates leaned towards him with a look of
concern on his face. Elliott straightened quickly and held up a hand holding Gates at bay. Not another man seated at the table noted anything different about the former Master Sergeant.

  The head of the United States Treasury, Anthony Lascala, rose to speak. “Elliott, gentlemen, I applaud the former senator’s eloquence and leadership, however I must caution all of us from becoming overly optimistic. Congress has shot down, time and again, proposals that are far less reaching than this. I believe much of this proposal is what we desperately need to do, but I doubt you’ll find a single congressperson to sponsor such a sweeping bill and few to support it in its entirety. You’ll have the banking industry, the Futures Industry of America and all the military contractors against you. You’re talking an army of lobbyists going against you.”

  “I’ve considered this and I intend to push back. If a congressman resists, we’ll expose him and the lobbyists backing him to the American people. We need to do this and we need to do this now,” Elliott replied.

  “And just how would you expose him?”

  “Leave that up to me. I’ve had my people conduct a poll recently. It was a phone call survey to five thousand families across the nation. The margin of error is 3 to 6%. 73.3% are in favor of the basics of this plan, with 18% undecided and 8% against it. When we included the Social Security funding portion of it the numbers changed dramatically. 92.7% approved of it with 3% against it and 3% undecided. I feel safe in saying that assuming the President runs on this platform you are almost assuredly looking at a president who will win a second term quite handily. Lastly my economic team is exploring the possibility of a National Referendum. This is the age of the Internet, Facebook, Twitter and others. A National Referendum could be completed more easily than at anytime in history. We don’t have the answers yet, but it’s looking like a simple yes or no text response may be sufficient, rather like voting for ‘Dancing with the Stars’. A National Referendum, or even the threat of one, should motivate Congress mightily because it hits them where it hurts. It hits them in the smug assumption of their power. It hits them by bypassing them completely and taking the questions directly to the people. The American people deserve better than they have received in the last thirty years as Congress has kowtowed to the power of the corporations. It is time for change, and the time is now.”