Fiscal Fiasco: A Dia Fenner Economic Thriller
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About this ebook
Andrew Demshuk
Michael L. Walden is William Neal Reynolds Distinguished Professor and extension economist in the Department of Agricultural and Resource Economics at North Carolina State University. He is author of seven books, including Smart Economics: Commonsense Answers to Fifty Questions about Government, Business, and Households. He also produces a daily radio program and writes a weekly syndicated newspaper column.
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Fiscal Fiasco - Andrew Demshuk
Copyright © 2014 Michael L. Walden and M.E. Whitman Walden.
All rights reserved. No part of this book may be used or reproduced by any means,
graphic, electronic, or mechanical, including photocopying, recording, taping or by any
information storage retrieval system without the written permission of the publisher
except in the case of brief quotations embodied in critical articles and reviews.
All characters are the creation of the authors, and any resemblance to real people is purely
coincidental. Corith College, CiFSRO, AmericaOne Bank, the North Carolina Association
of Financial Planner, and the Hotel Florentine are fictional creations of the authors, and
R.H. Clemmons was not a Treasurer of the State of North Carolina. There are antique
fairs at Liberty, North Carolina, but no auctions to the knowledge of the authors.
This is a work of fiction. All of the characters, names, incidents, organizations, and dialogue
in this novel are either the products of the author’s imagination or are used fictitiously.
iUniverse books may be ordered through booksellers or by contacting:
iUniverse LLC
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views of the publisher, and the publisher hereby disclaims any responsibility for them.
Any people depicted in stock imagery provided by Thinkstock are models,
and such images are being used for illustrative purposes only.
Certain stock imagery © Thinkstock.
ISBN: 978-1-4917-3549-7 (sc)
ISBN: 978-1-4917-3550-3 (e)
Library of Congress Control Number: 2014909480
iUniverse rev. date: 05/20/2014
Contents
1. LIGHTS OUT
2. RANSANKED
3. THE MISSING NUMBERS
4. SURPRISE
5. CLEAN-UP
6. EUROPE ON THEIR MINDS
7. PRESSURE
8. IT’S PERSONAL
9. AN ALTERNATIVE
10. AVA ARRIVES
11. BETH COMES THROUGH
12. THE AUCTION
13. GOLDMINE
14. ROAD TRIP
15. CENTER STAGE
16. OUSTED
17. CHOOSING SIDES
18. TARGET
19. CONFESSION
20. PLANS
21. SURPRISE ANNOUNCEMENT
22. RECONCILIATION
23. CLOSING IN
24. DUELING DATA
25. OFFERS
NOTES
To our parents, who taught us more than we realized.
1. LIGHTS OUT
The game was everything she’d heard it would be. A nail-biting fourth quarter had the score now tied with 45 seconds to play. Perhaps the greatest rivalry in college basketball—maybe in all of sports—the Duke University Blue Devils versus the University of North Carolina Tarheels—had come down to less than a minute. The ACC championship was on the line and with it an automatic top seed in the upcoming NCAA tournament.
Nobody in old and cramped Cameron Indoor Stadium on the Duke University campus minded the heat—or noise—from almost 10,000 fans—all of whom were now on their feet screaming wildly. Dr. Lydia Fenner—Dia to her friends—was among them. Dia hadn’t attended a college basketball game since her graduate school days at Cornell—and—she had to admit—ACC basketball was several notches above the game played between the Ivy League schools.
Watch the full-court press put on by the Blue Devils,
said Jeff Talley in her ear, shouting to be heard above the clapping and yells of ‘defense’ by the decidedly pro-Blue Devils crowd. Krzyzewski’s teams are known for their intense harassment of the opposing team’s ball handlers, especially in tight games. They’re looking for a steal and easy lay-up.
Although Jeff had brought Dia to the game, it wasn’t exactly a date. Jeff headed the Center for Financial Services Research and Outreach (CiFSRO for short!) at Duke University, where Dia was taking a sabbatical from her job as Associate Professor of Economics at Corith College in Virginia. CiFSRO offered her the opportunity to study and conduct research on the kinds of financial issues that had sent the country on a fiscal tailspin during the Great Recession.
But won’t Duke have to worry about the…
Before Dia could finish her question, all the lights in the arena suddenly went out.
Her immediate reaction was unsettling; she instantly grabbed Jeff’s arm. Silence overcame the spectators, but it wasn’t long before small lights—mostly from cell phones—were flickering in the stands. Dia could faintly see the two teams gathered around their coaches, looking as bewildered as everyone else. Amazingly, the fans remained quiet.
Suddenly the public address system crackled to life. Ladies and gentlemen, there has been a temporary power failure
. Dia thought to herself, "Seriously? Humph, tell us something we don’t know. For the most part possessed of a friendly attitude and engaging personality, Dia was also known for impatience and sometimes sarcastic wit.
Please remain calm, continued the announcer in a soothing tone, almost as if addressing Dia personally.
Crews are already working to restore the power. We hope to resume the game and finish play, so we ask you to stay in your seats."
This sort of thing happened all the time when I was in college,
said Jeff in a normal tone now that there was only faint chattering in the arena. Not that the lights were cut, but there were all kinds of pranks done both by my college and our closest rival. Some of our guys were constantly stealing the other college’s mascot and, of course, the other college’s fellows would figure out a way to get back at them!
Dia chuckled. Yeah, the pranks I remember at Cornell mainly involved paint, so I guess they were fairly tame by the standards of other schools. Cornell did benefit—or lose out depending on your perspective—by being several hours away from rivals like Harvard, Yale, and Penn.
Just then two movements caught Dia’s eye. Some large portable lights were being rolled onto the basketball floor, which Dia assumed were battery powered. The players from both teams were now up and moving about at each end of the court. Duke coach Krzyzewski and UNC’s Roy Williams were in an animated discussion in the middle of the court, both shaking their heads.
The other action was at the top of the arena, where a couple of workers were crawling on their hands and knees toward the large overhead lights, presumably checking connections and voltages along the way. Dia hoped their salary compensated for the obvious risks they were taking.
The game’s downtime let Dia’s mind wander and recollect where she had been in her short professional career since receiving a Ph.D. in economics from Cornell University in upstate New York. Her first job at the U.S. Treasury Department put her at the center a plot to flood the U.S economy with dollars, thereby creating massive inflation and a crash of the dollar’s value. Fortunately, the plan was foiled at the last minute, but not before both Dia’s life and career were put in jeopardy. Thinking she would escape to the quiet life of an academic in a small college town, Dia next took a position teaching economics at Corith College in the Virginia foothills. Still, even in a sleepy little college town, danger and intrigue followed her in the form of political corruption involving renewable energy.
With tenure now granted at Corith, Dia used the reward of a semester away from teaching to take the research position at CiFSRO. The financial crash of 2008 was now the ‘hot topic’ in economics, and Dia wanted time to study this—hopefully—once-in-her-lifetime event. But she also had a personal reason for doing a sabbatical at CiFSRO. Dia’s mother—Ava—was now almost 70 years old and living alone in Ohio with only Social Security, a modest private pension, and a small amount of savings for support. Dia wanted to focus her intellectual energies on the financial challenges, including financial scams, facing the elderly and retirees.
Dia was pulled back from her musings when a loud cheer suddenly erupted from the crowd. The lights were back on! Everyone looked relieved and excited to watch the remaining seconds of the game. The players were now gathered around their respective coaches for their final instructions. As soon as the building crew finished sweeping the floor, the game would restart.
After giving a smile and ‘knuckle bump’ to Jeff, Dia took advantage of the few minutes before the game resumed to check her cell phone for any late text or email messages. She kept both her phone and keys in a separate zipped compartment of her purse. As she pulled back the zipper and reached in the pocket, her stomach tightened and her jaw dropped. Both Dia’s phone and keys were gone!
2. RANSANKED
Are you sure you had your phone and keys in your purse?
Jeff gently asked. One look at her face and he knew the question had been a bad one.
A dose of the famous Dia-sarcasm was released. "Well, yeeees, with the ‘yes’ drawn out for emphasis.
Who goes anywhere without their cell phone these days, and how would I get back into my apartment without my keys?"
Jeff quickly realized he had ‘crossed the line’ with his ill-advised question and sought to make amends. Of course, that was a stupid question. Let’s look around and under the seats in case your purse was knocked over during the black-out
. Both of them knew the odds of a zipped compartment coming undone and then re-zipped by itself were nonexistent, but they searched anyway.
It was hard to concentrate because everyone was again on their feet and screaming as the seconds of the game clicked away. But Dia now had zero interest in who won. A headache was beginning to form. She just wanted to find her keys and phone and get back to her apartment. What started as a fun evening away from economics, numbers, and statistics had turned into a nightmare. Losing a cellphone in today’s world was like losing—or giving away—almost all your private information. Locks and keys could be replaced, but contacting numerous companies about potentially stolen passwords and account numbers was going to be a time-consuming hassle.
As predicted by Jeff, Duke’s man-to-man pressure forced a Tarheel turnover. With only 10 seconds remaining, Duke inbounded the ball to a player at mid-court, who proceeded to dribble and pass once, get the ball back, then push up a jump shot from the left corner that was all net just as the clock buzzed the end of the game. Duke won by two points!
Caught up in the excitement of the cheering crowd and trying to distract Dia from her missing phone and keys, Jeff shouted, What a game! That has to be the best basketball game I’ve ever seen. These teams were so evenly matched—it’s fitting the game ended the way it did.
Dia barely heard Jeff. Already problem-solving, her brain had left the game. Getting a new key for her apartment was really not a problem. But she was dreading the necessity of buying another phone and then adding all her contacts and apps. After all, she was a true Millennial, and Millennials lived by their phones, although Dia not as much as her students. When students changed classes at Corith College, no one talked or looked at passers-bye because everyone was either typing or reading a text message. Dia was enough older that she still enjoyed the personal contact of actually speaking to someone face-to-face.
She kept returning to one thought. The really scary thing was that she kept so much personal information on her phone, including financial data and personal identification numbers. Of course, it was password protected, but that didn’t stop Dia from worrying about some bright hacker breaking in to it and stealing her identity.
Dia and Jeff were now making their way down the steep steps of Cameron Indoor Stadium to the lobby, and Dia was totally silent. After a few minutes Jeff softly queried, Dia, are you OK?
This time repressing her urge to snidely state, ‘What do you think,’ Dia answered, Thanks for being concerned, Jeff. I’ll be fine. I’m certainly worried about who might have my phone and what they might do with it, but I’ll handle it. First thing tomorrow—better make that tonight—I’ll call as many of my credit card companies, banks, and other financial institutions as I can and tell them what happened. This way they can put a fraud alert on my cards in case anyone tries to use them. And who knows? Maybe I’ll get lucky and someone found my phone and turned it in.
Just as she said that, Dia looked around in the lobby to see if there was a ‘lost and found’ sign. But the small area was too jammed with happy fans moving in a large wave to the exit doors. Even if Dia wanted to go in a different direction, it would have been virtually impossible to move against the tide of humanity.
Dia and Jeff walked silently to the parking lot. Jeff drove a white-colored Prius. He loved the high gas mileage, but he often had a hard time finding his car in a large parking lot because it seemed like almost every other car was either white or a Prius.
Attempting to break the stony silence and Dia’s obvious pre-occupation, Jeff decided to change the conversation to vehicles and economics. As they both settled in the front seat, Jeff reminded Dia of a recent controversy in North Carolina about car buying. I really wanted to buy a Tesla. They’re an all-electric car with a range of 300 miles. One of the problems of electric cars has been their short range between recharging—maybe only 50 or 60 miles. But Tesla solved that problem.
Concluding it would be good to pursue his obvious attempt at a distraction, Dia replied, Then why didn’t you buy a Tesla? Was it too expensive?
Jeff smiled, glad that Dia was ready to talk and happy to discuss something that interested both of them. Tesla’s are expensive—around $100,000 with some options, but that wasn’t the issue.
(Dia thought to herself—interesting—spending $100,000 for a car isn’t an issue for this guy.) It was that North Carolina wouldn’t let me buy it.
No way!
Dia said. Now she was genuinely curious about the content of the conversation. A strong tenent of economics was that consumers are best served by free choice and open competition between sellers. In only limited cases did it make economic sense for governments to restrict what consumers wanted to purchase.
Well,
started Jeff, like most states, North Carolina has laws restricting who can sell vehicles, where they can sell them, and how vehicles are sold. In fact, dealers are granted territories in which another dealer selling the same brands cannot operate.
Dia was astonished. She hadn’t owned a car in Washington, and upon moving to Virginia had only bought a beat-up used VW from a graduate student who left for a job in New York City, where cars are a liability. She never had a reason to really study the car-buying market. Aren’t these laws a restraint of trade and a violation of the Sherman Anti-Trust Act?
Jeff was happy to add something about economics to his obviously very smart colleague. No, because states get around the federal statutes by arguing those laws only apply to inter-state trade, and the auto dealer laws only pertain to sales within a state.
Sounds like a stretch,
answered the skeptical Dia.
I know, but the federal courts have upheld the state laws,
continued Jeff. Dealers claim the laws prevent cut-throat competition and promote stability in the car-buying market.
"What they really mean is the laws preserve their higher-than-needed profit margin. And, of course, the dealers aren’t familiar with—or they conveniently ignore—Schumpeter’s argument that our economy moves forward with doses of creative destructionism, which is just a fancy term ‘for out-with-the-old and in-with-the-new’."
Jeff nodded in agreement. If we followed the auto dealers’ view of the economic world, we’d still be using rabbit-ears on our TVs instead of cable and satellite. State laws would have kept out the cable and satellite companies because they took business away from the local broadcasters.
Another part of Dia’s personality—which had both pluses and minuses—was to intensely pursue a topic until she was satisfied with all the answers. The serious look in her eyes indicated all thoughts about her missing keys and cell phone were temporarily gone, and she was laser-focused on the economics of the retail auto market.
So, were you not able to buy a Tesla because North Carolina denied them a dealership in the state?
queried Dia.
No, the law doesn’t go that far.
Jeff was multi-tasking by answering Dia’s questions while maneuvering through the heavy traffic exiting the Duke campus. Tesla only sells vehicles over the internet. North Carolina law says a dealer must have a physical presence in the state to sell a car. Dealers again argue this restriction helps car buyers by insuring a dealer-provided service center is always available to provide maintenance and repairs
.
Again, I’d say that’s a very self-serving argument.
Dia was actually thinking of a much stronger term, but since Jeff was technically her boss and they were just getting to know each other, she didn’t want to come across as unprofessional. If enough people buy Tesla’s and they need servicing, are we to think that no enterprising mechanics would learn how to fix them? I don’t think so! In economics, where’s there’s a demand, there will be a supply.
Dia’s last statement was said very forcefully. Hey, I’m on your side.
Jeff didn’t want him—the messenger—to be