The meeting had been called on short notice, and attendance was mandatory.
Everyone from mid-level account executives on up were there—even the field office managers from as far away as Baltimore. Todd Gray and the firm’s two other telecommuters were also corralled into the meeting by the management.
It was important, they said. So Todd dutifully packed his best suit. He drove from Bovill to the Pullman-Moscow airport, took a commuter flight to Seattle, and then a United flight to O’Hare. He rented a car and checked into the Marriott, where he usually stayed on his quarterly trips to Chicago. That blew the entire first day. With the two-hour time difference from Idaho, it was 7 p.m. by the time he got to the Marriott and clicked on Fox News. There was lots of bad news on the television. He watched the news for a half hour and then started making phone calls and sending e-mails to his friends in Chicago. He spoke in urgent terms. After a fitful night’s sleep, he sat through a full day of meetings that started with a 7:30 a.m. working breakfast. This early start time for a major meeting was unprecedented at Bolton, Meyer, and Sloan.
The firm had brought in two consultants for the daylong meeting, a Russian from Florida, and an Argentinean from NewYork City. Both were considered subject matter experts on high inflation. Both were well-seasoned accountants, and both had lived through it in their home countries. Triple-digit inflation. Todd heard from one of the mid-level managers that the consultants were each paid twenty thousand dollars for the day.
He also mentioned that a third expert, from Zimbabwe, could not attend due to a foul-up with his visa application. Todd regretted this, knowing that with the recent 15,000 percent annual inflation rate and where ten zeroes were knocked off the currency, the Zimbabwean would have had the most recent subject matter expertise.
The Argentinean was on loan from Peat Marwick. His name was Phillipe y Bordero, and he was far more informative than the Russian. He talked about his experience in Argentina in the 1980s, when inflation ran as high as 100 percent per month as well as the economic crisis of 2002. He went on to describe how president Raoul Alfonsin had instituted a thousand-for-one currency exchange. He mentioned that his firm had to run daily calculations to compensate for the inflation. Sometimes twice a day for the bigger accounts. He went on at great length about how the firm would park money in “day accounts” and shuttle money quickly into dollars to protect the money from “El Inferno” —the inflation that was burning up the Argentine peso.
The Russian arrived an hour late, with loud apologies, claiming that his flight had been delayed. Todd mumbled to himself, “Great. He could have flown in last night, all expenses paid. We pay this guy twenty grand, and he doesn’t even get here on time.”
The account executive sitting next to Todd snickered in agreement.
The Argentinean was cool and deliberate. In contrast, the Russian was a manic speaker. He chattered about what things had been like for Russian accountants in the 1990s. His discussion soon degenerated into a rambling discourse on bribes: bribing the Moscow police, bribing the tax officials, bribing the Federalnaya Sluzhba Bezopasnosti (FSB)—the main successor of the KGB, bribing the Russian mob.
On some topics, the Russian was succinct. He said forthrightly, “You’ve got to figure out which is the most stable currency, and exchange into that currency as quickly as possible, before your local currency melts away. At one point in time in Russia we had 1,800 percent inflation. It was madness to leave it in rubles for more than a few days. For us then—at the time—the safe haven was greenback dollars. For us now, I dunno. Euros maybe. Swiss Francs maybe, but it’s got to be something more stable than these cruddy dollars. Latest figure is 115 percent and climbing. To be fair to your clients, and to be fair to your firm, you’ve got to get all incoming receivables out of dollars very, very quickly.”
Todd never caught the Russian’s name. It was something multisyllabic and unpronounceable, ending in “ski.” One thing that the Russian asked soon after he arrived made Todd sit up and take notice:“Where are the security men? No guards in the lobby? You’ve got to increase security! You handle just account ledgers and thumb drives and data disks now, but pretty soon you are gonna be carrying around a lot of cash. So you need a couple of big guys with guns. Get the biggest, meanest looking guys you can find. And mean looking guns. One guard for the parking garage, and one or two for the lobby. Trust me. You won’t regret it.”
After the catered lunch, there was a convoluted question from the far end of the long conference table. It was about how they should go about calculat-ing daily depreciation of a currency and precisely how aggregates should be derived. Phillipe y Bordero was about to answer, but the Russian spoke first.
He said something that astounded Todd and everyone else in the room. He said, “Just make something up that sounds reasonable. You’re talking about a fast-moving target. Who gives a sheet? Make something up.”
At that point old man Meyer cleared his throat. He was obviously perturbed. He retorted, “We aren’t going to ‘make up’ anything. We are going to develop a set of accounting practices that will compensate for the inflation.
We will use elaborate computer modeling and projections if need be.” The Russian was nearly silent for the rest of the day. It was clear that Mr. Meyer did not get his twenty thousand dollars’ worth from the Russian. The day ended with nearly as many unanswered questions as it had started.
Todd took a 5:30 a.m. flight back to Seattle the next morning.
Todd was shaken from his reverie by the stewardess, who was walking up the aisle, making sure that none of the passengers had left anything behind. Todd stood up and carefully extracted his one and only bag from the overhead bin.
He never checked luggage on his trips to Chicago. Todd was the last passenger off the plane.
Since he didn’t have any checked baggage, Todd was in his Dodge pickup within five minutes after getting off the plane. Parking was right out in front of the little Pullman-Moscow air terminal. It was quite convenient, compared to O’Hare with its lineal miles of glittering concourses, dozens of baggage carousels, and several square miles of parking lots that charged twenty dollars a day. Fifty minutes later, Todd pulled in the gate of his property. Shona ran alongside the pickup, yipping and wagging her tail. It felt very good to be safe at home.
Mary ran out the front door and gave him a long hug. They talked while he unpacked.
When the Crunch came, it did not arrive without warning. By the turn of the century, Federal spending was out of control, and the debt and deficit problems were insurmountable. By 2008, with the global credit market in freefall, bank runs and huge Federal bailouts were becoming more frequent. Collectively, the bailouts were a massive, unstoppable hemorrhage of red ink. The debt and deficit numbers compounded at frightening rates. But it was too agonizing to confront them, so they were ignored. A report by the Congressional Budget Office was alarming. It said that just to pay the interest on the national debt for the year, it would take 100 percent of the year’s individual income tax revenue, 100 percent of corporate and excise taxes, and 41 percent of Social Security payroll taxes. Just before the Crunch, interest on the national debt was consuming 96 percent of government revenue.