Chronopunk: A novel (Episode 10)
If you went back in time, what knowledge would you gift the past to save the future?
Chapter 31
Court (2009)
“Borrowing money means you have to pay it back. Somebody has to pay it back, doesn’t it?”
Deborah stares at Ben Bernanke, who sits in the witness stand, his face devoid of emotion.
“Mr. Chairman, what does borrowing money mean to you?”
Bernanke’s expression reveals a hint of superiority and contempt. His voice takes on a slightly higher pitch, as if making an effort to sound especially clear.
“It’s a fundamental concept in finance. Credit has existed since the dawn of commerce. There’s nothing unusual about it.”
“Yes, Mr. Chairman,” Deborah continues. “But in commerce, money is borrowed for inventory or investment—productive assets. You, however, are buying bonds from banks whose assets are worth far less than their liabilities. You’re paying well above market value. There’s no future payoff here.”
“There might be,” Bernanke interjects.
Deborah falls silent.
“There might be a payoff. We believe many of the real estate assets backing those bonds could regain their value. Right now, there’s a liquidity crisis, and we’re stepping in to ease the pressure on the markets. This is an investment in the future.”
Deborah remains still, locking eyes with Bernanke but saying nothing.
Mody, sitting beside her, shifts in his seat, growing restless.
‘Come on, baby, say something. Nail him!’ He whispers to himself.
But Deborah remains stoic. A slight twitch flickers across Bernanke’s face.
“We consider QE an investment in the future of our country.”
‘Bingo’, Deborah thinks. ‘Finally, he did it. He shot himself in the foot.’
“Since when is the Fed in the business of investing?” she fires back. “I wasn’t aware we had a planning bureau tasked with managing public money. Or do we? Do you have a five-year plan? Did you consult with Soviet bureaucrats on this?”
“Objection…!”
Laughter ripples through the tense courtroom. Deborah turns to the jury.
“Okay, just one more question.” She pauses. “Would you find it appropriate if I took it upon myself to mortgage your future paycheck for an investment today—an investment you never asked for and have no say in whatsoever?”
She lets the words hang for a moment, then nods.
“No further questions, Your Honor.”
Chapter 32
Present (2006)
Mody stands up and begins writing on the whiteboard.
“We’re looking for three words: invest, save, and distribute. If we can prove that Fed officials ever used these words in the context of QE, we can turn the jury around. They have no authority to invest.
Even after the 1977 amendment to the Federal Reserve Act—when the Fed’s mandate expanded from price stability to full employment—it still wasn’t granted the power to invest. Investment requires a clear expectation of return and a defined amount of capital. Most importantly, it requires choosing a winner.
Chapter 33
Court (2009)
“Mr. Chairman, you’re opening a Pandora’s box here.”
“Objection,” the Fed’s lawyer interrupts. “This is purely hypothetical.”
“Objection sustained.”
Deborah nods. “Alright, no boxes opened. Let’s be precise. The Federal Reserve is choosing to buy assets at prices significantly higher than what the market is willing to pay. Is that correct?”
“Yes, but—”
“Excuse me, Mr. Chairman. No buts. Are you overpaying for these assets?”
“Objection. This is conjecture.”
“Objection overruled. Mrs. Fidler, please continue.”
“Thank you, Your Honor.” Deborah turns back to Bernanke. “So, you’re paying above market price. Who’s paying for it?”
Bernanke meets her gaze. Silence hangs in the air.
Deborah remains stoic. Bernanke doesn’t move. The silence stretches. A flicker of anger and unease crosses his face. Still, Deborah holds her stare. Neither of them speaks.
Then, she strikes.
“Who pays, Mr. Chairman? Whose money are you throwing at those insolvent banks? We’d like to know.”
Bernanke folds his hands, glances down, then looks up and finally speaks.
“The American people chose to establish a central bank. And it’s our job to keep the markets intact. So, to answer your question—it’s the American people.”
"Interesting. The American people? Which ones, exactly? Could you point out a few examples of these 'American people'?"
Deborah raises her hands above her shoulders, forming quotation marks with her fingers.
"Objection!” Bernanke’s lawyer screams.
“Overruled."
"Who are these people? Have you spoken with them directly? Were you directed by elected officials to represent the American people? And, more crucially, did future generations—who will bear the weight of your decisions—authorize you to act on their behalf?"
Bernanke regards her with unruly consternation, his expression tinged with defiance.
"I serve as the Chairman of an institution founded nearly a century ago to guide the financial economy of the United States. This responsibility was entrusted to us by the American people, carried out by the dedicated men and women who have served since 1913. At times, the intricacies of financial markets require us to act in ways that may seem enigmatic. Yet our ultimate purpose remains unwavering: to enhance the lives of Americans. That is the oath I took, and it is the commitment upheld by every employee under my leadership."
"With all due respect, Mr. Chairman, I’m not here for a history lesson on the Federal Reserve. My question is simple: do you have evidence that your actions align with the wishes of those you claim to represent? This lawsuit challenges your institution’s decisions—specifically those you’ve made as Chairman—to embark on quantitative easing, which we assert is an intergenerational Ponzi scheme. A scheme that will burden future generations. We stand here on their behalf, to prevent you from violating their property rights."
Deborah’s momentum surges. She feels that familiar 2 a.m. rush tingling up her spine as the bass of "Inner City Future" drops, transforming the crowd from scattered dancers into a unified, pulsating mass, swept up in full "whoop whoop" mode.
"We’re here to stop an escalation of government deficits and debt that could ultimately devastate the U.S. economy and destabilize liberal democracies worldwide. Beside me sits Mr. Mody Massraoui, the plaintiff, who has brought this lawsuit against the Federal Reserve for violating his property rights."
Sweat begins streaming down Mody’s back.
"Mr. Massraoui has initiated this lawsuit to represent the interests of future generations. Your quantitative easing policy sets a dangerous precedent, paving the way for persistent deficit spending in the United States. By 2024, the nation’s debt will exceed its annual GDP, with yearly budget deficits soaring into the trillions. Interest payments alone will outstrip funding for most entitlement programs and, in time, eclipse even our defense budget. You are laying the foundation for our country’s ruin, and we are here to put an end to it."
"Objection. Speculation."
"Objection sustained."
"Mrs. Fidler, please remain focused. You’re veering off topic and speculating about future outcomes."
"Your Honor, I will demonstrate that my claims are not mere speculation. By 2023, the government’s budget deficit will exceed one trillion dollars, job creation in the U.S. will be overwhelmingly driven by the public sector, and our national debt will surpass nominal GDP."
"All your claims are nothing but baseless speculation. You have no authority to forecast U.S. budget deficits over a decade into the future. That’s the role of the Congressional Budget Office, and their projections starkly contradict yours."
Bernanke’s lawyer fires off an animated rebuttal to Deborah’s accusations. Deborah, unfazed, fixes her gaze on Bernanke, disregarding the lawyer entirely. Silence falls over her once more. No words, no sound. The lawyer, clearly anticipating a spirited counterattack, stands momentarily adrift, caught off guard by the stillness enveloping the courtroom.
"Your Honor, the defense moves for a mistrial. This case hinges on speculative predictions about budget deficits, which is not our domain. My client is tasked with steering the nation through a severe financial crisis. As Chairman of the Federal Reserve, his duty is to ensure price stability and full employment—goals we are far from achieving. Prices are dropping, unemployment is climbing, and he is simply fulfilling the mandate entrusted to him by the American people. What is the purpose of this proceeding?"
"Because the plaintiff has presented a case that Mr. Bernanke’s actions infringe upon his property rights, violating both the Fifth and Fourteenth Amendments to the U.S. Constitution. I’d appreciate it if the defense refrained from deciding which cases merit this court’s attention—that’s our prerogative," the judge retorts, his voice carrying a barely veiled edge of irritation.
"Actually, Your Honor, if I may seize this moment to bring our friends here up to speed on the law," Deborah says, pivoting sharply toward the defense section. She strides to her desk, retrieves a sheet of paper, and begins to read aloud.
"The Takings Clause of the Fifth Amendment to the United States Constitution declares: ‘nor shall private property be taken for public use, without just compensation.’ Moreover, the Due Process Clauses of both the Fifth and Fourteenth Amendments safeguard individuals from being stripped of their property without lawful procedure. Mr. Bernanke, you opted to purchase bonds using funds that belong neither to you, nor to the Federal Reserve, nor to the U.S. government. There was no due process, nor has there been any mention of fair compensation. The plaintiff contends that your actions establish a precedent that will perpetuate further violations of the property rights of Americans—especially those of future generations. That is precisely why we stand here today: to shield the property rights of those yet to come from the intergenerational Ponzi scheme you’ve set in motion with quantitative easing. We seek neither criminal penalties nor to sully your reputation, Mr. Bernanke. Mr. Massraoui simply asks this court to order an immediate cessation of QE and to erect a robust bulwark defending property rights, barring any American institution from repeating such actions in the future. You are tampering with the Constitution, Mr. Chairman—a step that cannot be undone. That’s why we must halt it now, before it spirals beyond control."
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