Manhattan Reborn 1978

new York.

Early morning~

Manhattan, at the intersection of 42nd Street and Seventh Avenue.

Brotney Mejia, sitting in the car, saw a police car parked at the intersection on the left front, and felt a little strange in his heart.

10 minutes later

In front of a hotel just over 30 meters away from the intersection, Mexia saw a middle-aged man specially sent by Mr. Gardener to "lead the way" for her.

She followed the middle-aged man into the suite on the third floor of the hotel.

In the suite, Ezra Cremo, head of the CIA's New York branch, took the initiative to greet her and enthusiastically introduced her to several field colleagues who had just returned from abroad.

After a brief introduction and pleasantries, the "guide" left.

Ezra Cremo asked several colleagues to sit down first, then he pulled Mecia to the inner room of the suite, closed the door with her consent, and explained in a low voice.

"I'm sorry that I chose to invite you over at this time..."

"Today is Sunday, so they can only come back temporarily for one day, and they have to fly back in the afternoon or evening."

Mexia didn't speak, but first observed the room out of habit, then walked to the window and closed most of the curtains. .

Then, she found an angle to stand at that was not visible from the window, and asked with a smile.

"Didn't your CIA just start implementing the layoff plan?"

"Are they all so anxious?"

"Hehe~"

Claymo shook his head with a wry smile and walked slowly to the corner. While slowly taking off his coat, he showed the cautious Mecia that he did not carry any equipment with him. .

"Our previous director, Mr. George W. Pushk, was under pressure from all aspects before he left office, and he stubbornly insisted on not implementing any damn layoff plan."

"But after he left office, several funding applications submitted by our headquarters to Congress were all rejected."

"After the headquarters managed to hold on for more than a year, the new director could not withstand the pressure from all aspects. He held an internal meeting and decided to lay off employees!"

Claymore bent down and talked about his trousers, exposing his ankles and calves, and then patted his legs with both hands and said.

"The layoff plan you are talking about is the layoff plan of 10 field staff proposed by the new director in October last year."

"Toby Olga, do you know him?"

"She is one of the people who will be eliminated from the plan..."

Mecia looked at Cremo quietly, and when he saw that he was about to take off his sweater, he stopped him with a smile. .

Cremo nodded in gratitude, pulled a chair from the side and invited Ms. Mecia to sit down, and continued.

"As soon as this plan was proposed, it encountered various internal objections."

"So it was not until last month that the headquarters issued the final official layoff report."

"But on this list of layoffs, there are only more than 700 people who have returned to the headquarters from overseas to receive job recommendations~"

"The remaining more than 2000 people have found better places for themselves."

"So, our director proposed a plan to lay off 1 people within the year at an internal meeting at the end of last month."

"We will lay off 5000 people by the end of June, and another 5000 by the end of the year."

"This layoff plan will not only target field staff, but also include domestic headquarters."

"Oh~"

Mecia, who had no idea about these situations, nodded and asked: "How many people will be laid off at your headquarters this year?"

"At least a thousand!"

"Um... Are there that many people in your headquarters?"

"..." Claymore said with a more bitter smile and spread his hands.

"Since the end of World War II and the start of the Cold War, our CIA has only carried out a wave of layoff plans in 63 when President Kennedy was assassinated."

"Each year, we recruit a varying number of new people to join us, and the total amount of funding we need is also constantly growing."

Mexia smiled, raised her eyebrows, and joked: "So, you are like a greedy fat man who never knows how to lose weight?"

"Hi~ That's right!"

Claymo took a deep breath, pointed behind him, nodded and said: "The eight of them just want to find a suitable person for the job as soon as possible before the headquarters weight loss plan is officially issued."

"Understand~"

Mexia nodded in agreement: "If they don't think about themselves in advance, they will fall into a particularly passive situation."

"Yes!"

The expression on Claymo's face slowly turned cold, he turned his head and looked at the floor not far away, and whispered: "You have never worked in a similar organization, so you may not be able to understand the urgency in their hearts."

"Only people like them who have actually worked on the front line know best how cruel and helpless it is."

"Okay..." Mexia obviously didn't want to continue this "heavy" topic and said directly.

"I need to talk to each of them individually."

"it is good!"

"I'll make arrangements outside." Cremo looked happy and stood up and walked out of the room without any delay.

Mexia looked at his back disappearing at the door, and quickly overturned her original plan~

Before the end of the year, another 1 people will be laid off!

How many people are available here?

hehe~

----

Manhattan.

42nd Street, in front of Wildfire Bar.

Cui Yingying held Susan's arm and watched Polly Sidrich's car drive away quickly. Her eyes couldn't help but fall on the breakfast shop being renovated across the street. .

Susan also followed her gaze, looked at the breakfast shop, and said with a smile: "We'd better wait for the people arranged by Polly to come over before we go there."

"Okay." Cui Yingying thought about her own thoughts and nodded slowly.

Susan, who was also worried, slowly swept her eyes across the street, and finally landed on Old Hawke, who was walking from a distance.

"Hey ~ Long time no see, Hawke!"

"Yes!" Old Hawke nodded happily, pulled his grandson Little Hawke beside him, and said with a smile.

"When we had dinner at the Wildfire Restaurant two days ago, we were still saying that you might be coming back..."

"Oh?" Susan turned her head to look in the direction of Wildfire Restaurant and smiled.

"Are you having a dinner together? Who is there?"

Old Hawke hugged his grandson with a smile and explained: "Yes..."

"I know!" Little Hawk next to him suddenly jumped in front of his grandfather and raised his hand.

"The two Mr. Sidrich specially prepared a lot of seafood for us..."

After Susan finished listening, she looked at Cui Yingying and asked in a low voice.

"They want to invite your master to come to New York to open a restaurant. Is that the case?"

"should be."

"Oh..." Susan nodded suddenly, and immediately thought of her mother and brother, and asked Old Hawke.

"Little Hawke and my brother Little Johnny are in the same school, right?"

"Do you know where the principal of their school lives?"

"Um... I can find someone to ask." Old Hawk glanced at his grandson and did not ask any questions out of curiosity. Instead, he shook his head feeling very sorry.

"Okay! I'll trouble you then." Susan thought for a while, and thought it would be better to let Old Hawke come forward to inquire, and nodded.

"It's okay." Old Hawk took his grandson Little Hawk, nodded to Cui Yingying, turned around and walked away quickly.

Susan looked at the two people leaving, and suddenly remembered that she could ask Superintendent Alston from the Auxiliary Police Office for help in handling the matter of transferring schools for her brother. .

----

Houston, Texas.

West of downtown, 19 Piney Point Village, Piney Point Village, Memorial District.

in the study.

When Professor Bartley opened the door after getting up early, he was surprised to find that David was already sitting behind the typewriter, concentrating on "coding". .

He walked slowly to David's side, looked at the typed stack of manuscripts, and asked with a frown.

"You... stayed up all night last night?"

"It doesn't count..." David nodded without stopping.

"Yesterday, I originally wanted to go home and have a good rest."

"But after I went back, I felt like a lot of inspiration for writing a book burst out in my head, and I couldn't control it even if I wanted to."

"so.."

"So, you came back and hid here all night writing last night?"

David slowly stopped what he was doing and smiled: "I just wrote for a while before midnight and this morning."

"Tutor, you should be familiar with the monetary policies implemented by the Federal Reserve Bank of America, right?"

"Please help me take a look, here...here...and here. Am I making a mistake?"

"Um.."

Professor Bartlet took out his glasses from the drawer, walked to the window and sat down, looked at it quietly for a while, and nodded slowly.

"Just when you have written this, I will tell you about the Federal Reserve Bank of America~"

"Okay!"

David took the paper and pen from the side, shook his head relaxedly a few times, and pretended to be listening carefully.

Professor Bartlet chuckled, crossed his legs, and whispered in the morning light.

"The main responsibility of the Federal Reserve Bank when it was first established was to serve as a lender of last resort, provide liquidity to domestic banks, and prevent another bank run event similar to that of 1907."

"But it did not do this before the Great Depression. Instead, it contributed to the outbreak of the Great Depression in several aspects."

"After President Roosevelt took office, the Fed's influence and credibility have hit rock bottom."

"Almost everyone is clamoring for the government to dominate the Federal Reserve and implement monetary policies that are beneficial to the country."

"So~"

"I roughly summarize the milestone events in the history of the Federal Reserve Bank since its establishment in 1913 as..."

"In 1942, the Federal Reserve could purchase and hold U.S. Treasury bonds in accordance with the law."

“In 1951, the Federal Reserve Bank of America and the Treasury Department signed the Treasury Agreement.”

"In 1977, after lengthy meetings and negotiations between the Federal Reserve Bank of America and the government, the Federal Reserve Bank of America Reform Act was finally introduced."

"Let's talk about 1942 first."

"1942 was a very special year."

"The attack on Pearl Harbor forced the United States, a non-participating country in World War II, to join that cruel war."

"War is a giant beast that swallows gold!"

"At that time, the United States had just experienced the Great Depression, and the economy was in a period of recovery and growth~"

"President Roosevelt asked the Federal Reserve Bank of America to purchase a large amount of gold as an important asset reserve and at the same time assist the government in controlling interest rates so that domestic factories and companies can more easily obtain financing loans and resume production."

"But when the war came, people discovered~"

"If the U.S. government cannot reach a consensus with the 12 Fed branches, they will simply not have the money to launch a war."

"So, in 42, President Roosevelt finally reached a consensus after more than two months of tug-of-war negotiations with the presidents of 12 Federal Reserve Bank branches."

"The Fed can purchase and hold U.S. short-term Treasury bonds in accordance with the law."

"Treasury bond interest rates must be controlled within the lowest standards acceptable to the government."

Professor Bartley raised an index finger to David and said with a smile: "This is the war bond that people often mention later!"

"The word war bond has now become a symbol in people's memory."

"But at that time, if the Fed and the government could not reach a consensus, they would spend a large amount of gold to buy war bonds."

"The United States simply cannot achieve the miracle of rapid economic growth for more than 20 consecutive years~"

"From 42 to 51, in the asset structure chart of the Federal Reserve Bank of America, the proportion of assets held by gold decreased rapidly, and the proportion of government bonds continued to rise~"

"Until 51, when most of the national debt was about to mature, the asset structure chart of the Federal Reserve Bank of America showed a [-]-[-] split between national debt and gold."

"However, during and after World War II, the Federal Reserve was unable to have the power to formulate independent monetary policies and play the role of a national central bank in regulating the economy."

“The reason for the Treasury Agreement signed in 1951 was that the government required the Federal Reserve Bank of America to continue to maintain a low interest rate policy, which resulted in the Federal Reserve Bank of America being unable to control inflation by raising interest rates.”

"William McChesney Martin Jr., then chairman of the Federal Reserve Bank of America, conducted many rounds of negotiations with the government and finally led to the signing of the Treasury Agreement, laying the foundation for the current relatively independent Federal Reserve Bank of America."

"From 1951 to 70, William McChesney Martin Jr. served as president of the Federal Reserve Bank of America for five consecutive terms."

"He is the longest-serving chairman in history."

"During his tenure, he once said a famous saying: The job of the Federal Reserve Bank is to remove the big wine glasses from the table at the beginning of the banquet!"

"Also~"

"In 1946, after World War II, there was another event that still has a strong influence today~"

"The Employment Act of 1946 signed by President Truman after the war."

"Under this bill, the federal government must be responsible for coordinating and leveraging all of its programs, policies, authorities and resources to provide beneficial opportunities for people looking for work."

"The bill also provides for the establishment of a Council of Economic Advisers (cea) to formally authorize the government to formulate fiscal and financial policies aimed at preventing economic recession and maintaining full employment."

"Because most of the economists at that time were firm supporters of Keynesianism..."

"The strategy proposed to the government by this group of economic consultants working at CEA is to continue borrowing, printing, and spending money to pursue a deficit economy."

"In the 50s, the intermediary indicators controlled by the Federal Reserve Bank of America included net free reserves, three-month Treasury bill interest rate and the total currency ratio, and the importance of indicator control was determined in this order."

"Judging from the results, the Fed has better control over the first two indicators, but worse control over the monetary aggregates."

"This led to three economic crises in the first 10 years."

"In the 60s, the Phillips Curve was gradually accepted by scholars in the economics field."

"Phillips found that unemployment and prices have an alternating relationship and that they may coexist. This is a denial of Keynes's view."

"When unemployment is high, prices will fall. When unemployment falls, prices will rise. Inflation is caused by wages and costs. This is the cost-push inflation theory."

"And this discovery attracted the attention of Paul Samuelson at the time."

"He found that when the price in the Phillips curve is replaced by inflation data, unemployment and inflation also have an alternating relationship. Low unemployment corresponds to high inflation, and high unemployment corresponds to high inflation."

"He believes that this relationship provides a menu of options for governments that have experienced the Great Depression. The government can find a so-called optimal point on this curve that can ensure full employment and acceptable inflation levels."

"Afterwards, his findings gave hope to politicians who were having a lot of headaches in Washington."

"After some research and discussion, they concluded that maintaining a certain level of inflation is conducive to economic development."

Professor Bartley couldn't help laughing at this moment.

He recalled the "determined" expression of his old friend Paul Samuelson more than ten years ago, shook his head slightly and said.

“In 1961, John F. Kennedy became president, which kicked off the Great Inflation.”

"Three of Heller, Paul Samuelson and Thoreau, then chairman of the Council of Economic Advisers (cea for short), believed after research that Keynesianism and the Phillips Curve could help them unlock the secret of precise regulation of economic wrinkles."

"Kennedy, a loyal supporter of Keynesianism, was advised by the trio to adopt a fiscal policy called countercyclical."

"This kind of policy will increase government spending and reduce stimulus to stimulate the economy and promote employment when the economy is in recession; when the economy is overheating, the government will reduce spending and raise taxes to curb inflation and debt."

"In 1963, CEA Chairman Heller helped President Kennedy formulate a tax reduction bill."

"But before Kennedy could get the bill passed in Congress, he was assassinated."

"His successor, President Lyndon Johnson, signed the bill shortly after taking office."

"Soon after that, Lyndon Johnson decided to escalate the Vietnam War and increase government spending."

"CEA Chairman Heller began to fear that the implementation of these policies would lead to rising inflation, and suggested to the president to raise taxes. After being rejected, Heller decided to resign!"

"President Lyndon Johnson signed a series of presidential decrees in 1965, which promoted many government investments~"

"Martin, then chairman of the Federal Reserve Bank of America, couldn't sit still..."

"He went to Lyndon Johnson with the Treasury Agreement and asked to raise interest rates to curb inflation...but he was rejected!"

"Lyndon Johnson asked Martin to follow the government's wishes and cut interest rates to fight inflation...rejected!"

"After Nixon came to power, he was very dissatisfied with Martin, the strong man standing between the government and the Federal Reserve Bank of America. He forced Martin to resign as chairman of the Federal Reserve Bank of America."

"The person who succeeded Martin, after receiving many warnings from Nixon, asked the Federal Reserve to start cooperating with the government to continuously purchase national debt and issue additional currency."

“Until the sudden outbreak of the last oil crisis, inflation had reached the point where it was gradually getting out of control~”

"Nixon also had to become the first president in American history to voluntarily resign because of the Watergate scandal."

After Professor Bartley finished telling these real anecdotes from history, he smiled and showed his hands to David.

"After hearing this, you should also understand... In the more than two decades after the Treasury Agreement, the Federal Reserve still has not been able to get rid of the influence of the government, let alone achieve the independent monetary policy power it originally wanted."

"So in 1977, our current President Warren White passed the Federal Reserve Reform Act and formally gave the Federal Reserve the dual responsibilities of maintaining employment and stabilizing prices that the government has always insisted on."

"At the same time, the Federal Reserve will also be relatively independent in assuming the responsibility of formulating monetary policies to curb inflation."

Professor Bartlet slowly put away the smile on his face, looked at David seriously, and finally started to talk about the "main topic".

"The organizational structure of the Federal Reserve Bank can be roughly divided into three parts: the Federal Reserve Board of Governors, also known as the Board of Governors of the Federal Reserve System; the various branches of the Federal Reserve Bank; and the Federal Open Market Committee."

"The council has seven permanent members and is a federal government agency. Its office is in Washington, D.C., where the government is located."

"Each branch is under the jurisdiction of the Federal Reserve Board of Governors due to the constraints of the Federal Reserve Act."

"But these branches are basically operating independently, and have also established their own monetary policy research departments and economic data statistics groups."

"For example: your last memorandum was handed over to the department group within the New York Fed responsible for studying EU-Belgium policy."

David recorded this "key point" in his notebook and nodded.

Professor Bartley continued: "Finally, there is the Federal Open Market Committee (FOMC) that Wall Street often refers to."

"The FMC is mainly responsible for determining the latest monetary policy and achieving a balance between economic growth and price stability through the control of monetary policy."

“Previously, the government hoped to control the increase in supplies and prices through administrative orders, but failed.”

"More importantly, as long as the employment rate falls, the unemployment rate rises, and the economy shows signs of recession, the government wants the Federal Reserve to launch relevant monetary policies to stimulate economic growth and temporarily put inflation down."

"And it is precisely this kind of operation by the government that pursues the perfect law in the Phillips Curve, but ignores the key points of the real curve!"

"The Phillips Curve has temporarily fallen off the altar, and Keynesianism has also been criticized by the media and other economic schools."

"Monetaristism believes that the amount of money in the economy determines the direction of the economy and inflation in inflation."

"When an economic crisis breaks out, the Federal Reserve can stimulate the economy by printing money to increase the money supply." (This is what is often mentioned in the news - quantitative easing policy.)

"On the contrary, when the economy is overheated and inflation is too high, the Federal Reserve can reduce the circulation of money to respond." (This is often said in the news - the Fed shrinks its balance sheet.)

"Milton Friedman made some modifications to the Phillips Curve theory."

"He believes that the historical relationship between unemployment and inflation can only be viewed in the short term."

"In the long run, there is still a natural unemployment rate, which is not necessarily related to inflation, which explains why stagflation occurs."

"So, many experts and scholars who support monetarism give a solution to big inflation: control the total supply of money and credit, and stop looking at excessive employment and unemployment indicators."

Professor Bartlett stretched out his right hand to David, wanting to hear what "feelings" he would give after listening to this.

David fiddled with the pen on his fingertips, looked down at the notebook, thought for a while, and said, "I think that if the Federal Reserve wants to solve the current problem of stagflation, it must first clarify a major premise."

"Use all means!"

"Oh?"

"Tell me about it~" Professor Bartley asked with great interest.

David sat back in his chair and smiled: "I know many people believe that global inflation caused by external factors such as the oil crisis cannot be controlled by the Federal Reserve's monetary policy."

"But people have developed inertia expectations for inflation, and at the same time they have completely lost confidence in what the Federal Reserve Bank of America and the U.S. government have done in recent years."

“So in order to break this pessimistic expectation and re-establish its image, the new chairman of the Fed must send a clear and strong radical signal to the outside world!”

"The Fed will follow the monetarist theory and directly aim at controlling bank reserves, allowing interest rates to float freely with the market, and withdrawing the previously printed money from the circulation market!"

"Of course~"

"Such a radical strategy will definitely lead to an increase in the volatility of interest rates. In the short term, inflation will rise instead of falling. It may even bring the U.S. economy to the brink of collapse, etc., which is a result that many people do not want to see."

"but!"

"Fiscal and monetary policies tend to be too stimulating too early or too restrictive, and the result is the long-term inflation we have now."

Professor Bartlet looked at David who stopped quietly, frowned and thought for a moment, nodded and asked.

"Be specific."

David blinked quickly, looked at his mentor and smiled bitterly: "What do you want to hear...?"

"What do you mean I want to hear it?" Professor Bartlet laughed out of anger.

He raised his finger and pointed at the "little slippery head" and scolded: "We are the only ones here, just say whatever you want!"

"Hey~"

David shrugged "obediently" and said cautiously: "If the Fed wants to control the growth rate of the currency quantity in the international currency market, the actual operation will be very difficult!"

“The Federal Reserve should use the traditional method of adjusting the federal funds rate and bank reserves, and allow the federal funds rate to adjust freely according to market needs. Only by gritting its teeth and persisting can we see very obvious effects within three years.”

(The federal funds rate is the rate at which banks lend money to each other overnight.)

"and also!"

"The Federal Reserve must increase the discount rate by at least 1 percentage point while implementing this set of monetary policies!"

(The discount rate is the loan interest rate provided by the Federal Reserve Bank of America to domestic commercial banks.)

"Because, the higher the discount rate, the less banks borrow from the Federal Reserve Bank of America, and the bank reserves will be correspondingly reduced, and the money supply will gradually decrease~"

Professor Bartlett narrowed his eyes slightly, looked at David and asked in a low voice: "You just said it yourself, how serious the consequences of implementing this set of monetary policies will be!"

"But you still think so...right?"

"Yes!" David nodded firmly.

Professor Bartlet let out a long breath, turned his head and glanced at Toby Olga who was "hiding" outside the study door, and whispered.

"President Warren White's economic advisory board and the chairman of the CEA have recommended to him the latest candidate for the chairman of the Federal Reserve Bank of America."

"But after these people met the president, they all rejected the president's invitation..."

"Now, the position of chairman of the Federal Reserve Bank of America has become a hot potato, and everyone is avoiding it~"

"After discussing with my old friends and Paul Samuelson, we all think that Paul Walker is a very good candidate!"

"Hi~"

David couldn't help but widen his eyes and asked breathlessly: "You want...?"

"Correct!"

"I would like to recommend to the president, Paul Volcker!"

"I will also tell him what you just said!"

"I think that after listening to your suggestions, he will definitely regard you as the person who best understands his thoughts."

"Haha..." David laughed twice and touched his nose with his hand, not knowing what to say.

He never dreamed that his mentor would take the initiative to recommend that big, stubborn old man with a tough style to the president.

But this. .Is it too early?

If Paul Volcker really accepts this appointment, it will be considered as a disguised verification of historical inertia. .Does it also exist?

David slowly calmed down from the "excited" mood just now and thought seriously.

And the look he showed, from Professor Bartley's perspective, is a bit intriguing~