Chapter 24

By 4:30 that Saturday afternoon, President Kathleen Lehrer had been in a briefing by her War Cabinet about the situation in Mexico for over an hour.

"Well," said the President, responding to the latest report about the leaders of the Mexican uprising which had just come in, "all might not be as bleak as we feared."

"Why do you say that?" asked Ted Reynolds.

"If Jorge Guerrillero and Maria Velazquez are really the leaders of this uprising, that is a hopeful sign," replied the President. "I have known both of them very well, both personally and professionally, for about ten years. I have been involved with helping them with their project to help the poor in the barrios since my first trip to Mexico City, and had raised money for them and had taught classes to adults and children enrolled in their program while I was there on summer vacations. I was also able to help start a scholarship program through Temple University to have a graduate of Temple's Latin American Studies Semester program spend a year-long internship program there working with the people in the barrios. In fact, a very good friend of mine is there right now working with them."

"What is your friend's name?" asked Reynolds. "If you would like, I'll send an advisory to the embassy about him or her in case something should happen."

"His name is Steve Stone, and he is working as a doctor in the barrios. He recently graduated from the University of Pennsylvania Medical School, and wanted to put his knowledge to work where it would help people who normally cannot afford medical care. Steve is very street smart, and I doubt if he would run into trouble, but I would appreciate it just in case he should. But I would like it handled through normal channels and not as some sort of emergency situation."

"Okay."

"By the way, Ted, have you heard yet how many heads of state will be here for the funerals on Monday and Tuesday?"

"President Alexandrov just informed us that he will be here. The heads of all of the N.A.T.O. countries will be here, as will the leaders of every country in Latin America, except Cuba, Paraguay, Bolivia and Chile. I don't know about Mexico at this point, but right now I doubt it. China, Japan, South Korea, Australia, Indonesia, Thailand and New Zealand will all be here, as will many of the countries in sub-Sahara Africa. India and Israel will be here, but the other Middle Eastern countries were doubtful."

"That's understandable," commented the President. "Did the leaders of the other members of the Group of Seven say when they would be arriving or who they would be bringing with them?"

The British, Germans and Canadians will be arriving tomorrow and will be bringing their Foreign, Defense and Finance ministers with them. Italy and France will be here Monday and Japan will be here first thing Tuesday morning. As far as I know, their contingents will be similar to Britain, Germany and Canada."

By 5:00, the most powerful figures in the financial world were beginning to arrive at the White House and were being escorted to the Oval Office, into which they were immediately admitted.

"Gentlemen, thank you for coming on such short notice," greeted the President. "I'm afraid that the worst case scenario that you outlined for me last night might be under way, although it is still too early to tell for sure. As you know, there has been a coup in Mexico, accompanied by rioting. The situation there is very fluid; anything could happen."

"Now, we had a report, which has not been confirmed yet because communications have been disrupted, that among the things that the demonstrators have been demanding are more U.S. aid for the poor and a cessation of payments on all foreign loans, particularly to the fat, rich Yanqui bankers, until poverty is ended in Mexico and children there are no longer starving. Gentlemen, if the faction that is calling for a halt to loan payments comes to power, we are in serious trouble."

"Can our banks withstand such a massive default?"

"If there are massive runs, no way," answered Fed head James Courie. "With the banks being closed Monday and Tuesday because of the national days of mourning, we have an extra two days in which to work. We must assume the worst and hope like hell it doesn't happen. So, I am prepared to release $250 billion into the banking system, to be used as emergency on-sight reserves, to try to cushion against massive runs. By doing this, we are running the risk of creating runaway inflation, but if the banks start closing, the whole system might collapse."

"I feel that if we can hold up for two or three days, the public will start to regain confidence and ease the pressure on the banks. I will send word out to all of the Federal Reserve Banks and have them start shipping funds to the member banks."

"Jim, it must be emphasized to the banks that these funds must be held as reserves, to be used only when a run threatens the solvency of the bank," insisted Treasury Secretary Donald Conway. He then looked at Richard Doté from the I.M.F. and Hans Geldt from the Bank of International Settlements.

"If Mexico defaults," continued Conway, "the whole international banking system could come tumbling down. If we are to overcome this crisis, international cooperation will be necessary. It is imperative that we prevent any currency from collapsing. In other words, if there is a run on the dollar because of this, European central banks will have to help us support the dollar in order to avoid a total disruption of the international financial system."

"But, Mr. Conway, if you turn on the printing presses in order to save your banks, we will be left holding worthless paper," pointed out Geldt. "If we have to move to support the dollar from a total collapse, that may require massive payments of gold, which will seriously weaken our own currencies, threatening us with massive inflation as well. We have the responsibility to our people not to become too exposed or too vulnerable. You are asking us to do just that! And what can we get in return?"

"You can expect us to do the same thing for you if the roles were reversed," answered Courie, "especially if such a collapse could bring down the whole system. If Mexico defaults, we could be in serious trouble, but I think the system will survive. We then must pray to God that no other large debtor nation, such as Brazil, Argentina, Nigeria, Indonesia or the Sudan defaults, or else we are in a shitload of trouble."

The room was silent for a moment as everyone pondered the seriousness of the situation. The President then turned to Hans Geldt and addressed him in perfect German.

"Herr Geldt, will you assist us? This is only a contingency plan in the event of a Mexican default and a massive run on our banks. These funds will be delivered to the banks on the condition that they will only be used if a massive run threatens its solvency. Otherwise, the funds will not be placed into circulation because such a move would almost certainly set off massive inflation. If the worst does occur, and Mexico does default, we will have to work together, or else we will all go under."

"Ich verstehe," replied the head of the Bank of International Settlements and the Bundesbank, "but I still don't like it. But I don't think we have much choice. It is in our best interests to avoid a collapse too. We will explain this to the other central bankers and I will work with you to ensure their cooperation. They'll probably grumble a lot, but they'll go along."

"Danke schön," replied the President. "You don't know how much I appreciate your help."

"I will start contacting them when I leave here so that they won't be caught by surprise," added Courie. "I'm sure they're expecting it anyway, but I think it will make it easier for them to go along with our plan if they know about it ahead of time."

"I agree," said the President. She turned to the Chairman of the Federal Reserve Board. "Jim, I think you should contact them first, and have Herr Geldt talk to them after you have explained our predicament."

"Yes, Madame President. I think their response will be better if they hear about it from us first."

"Now," continued the President, "all we have to do is come up with a long-term plan that will correct the systemic problems that brought us to this." She paused for a moment before continuing. "But, I want to get through the next week without a total collapse first. Either way, we have to do something that will ensure that we are not placed into this situation again." She paused. "So, we have the short term plan pretty much ready to go, with the Fed turning on the printing presses and hoping like hell we don't need to release all of that money into the economy. Hopefully, that will be enough for the short term, and hopefully over the next several weeks we'll be able to come up with the long-term plan."

"Herr Geldt and Monsieur Dotè, will you gentlemen be in Washington Wednesday morning?" asked the President.

"Yes," replied both men.

"Good." She then turned to James Courie. "Jim, will you be in town Wednesday?"

"Yes, Mme. President."

"All right. Jim, I would like you to prepare for a meeting that I hope will not have to be called. If Mexico defaults Tuesday, we will meet here Wednesday morning. Jim, I would like you to contact the other central bankers and try to have them here for the meeting. Hopefully we will know by 10:30 or 11:00 Tuesday morning what's happening."

"Don," said the President, addressing her Treasury Secretary, "I would like you to contact the other Finance Ministers and explain the situation to them and request their assistance in the event of a default and subsequent run on the dollar in order to prevent a collapse of the whole system. Also, ask them to stand by for Wednesday."

The President looked around the room, pausing for a moment at each person. "Obviously, all of this information is to remain totally privileged, eyes only for Finance and Foreign Ministers, central bankers and heads of states. We must keep this as quiet as we can in order to avoid a financial panic. I want to anticipate a worst case scenario and try to prepare for it as well as we can and then hope like hell it doesn't happen. That is all we can do, and the only way we might be able to pull it off is if we can keep it quiet."

"Now, I would appreciate it if you would be able to keep me informed of further developments. If any of you are questioned by the press, tell them that I will comment on the coup in Mexico in my address tonight. Thank you very much for your help. You do not know how much I appreciate it."

It was almost 6:30 when Kathleen Lehrer left the meeting, checked her messages and asked Anna Escrito to contact Gary Wilson and to have him meet her in the private dining room to go over the speech before Anna left for the day.

As she entered the residential part of the executive mansion, the President encountered her daughter and her son.

"Are you all right, Mom?" asked Sara Lehrer with a worried look.

"You look pale, Mom. You're not coming down with the flu or anything, are you?" asked Marty, who was also concerned with his mother's appearance.

"No, I'm just tired. You two have heard about what happened in Mexico today didn't you?"

"That's all that's been on the television for the past two hours. They showed the riot, then where the soldiers mutinied and shot down the Mexican President's helicopter. It was horrible."

"Mom, one of the reporters said that the people were rioting because the Mexican Finance Minister had been acquitted of bribery and stealing millions of dollars that had been borrowed by Mexico from our banks despite huge amounts of evidence against him. How can anyone be so greedy, especially with so many people being so poor and not having enough to eat?"

"I don't know, honey. I just don't know. If only the people who serve in government would realize how much they hurt the image of their government and how by doing these types of things, they lose the confidence of the people in their government. That is one of the things we have to combat here as well. People in this country have been hearing a lot about corruption in the government and fraud by government contractors quite a bit over the past twenty to twenty-five years. Too many people in this country have become apathetic and cynical about our government. As a result, disenchantment has grown, and more and more people have dropped out of society. Pressure builds, sometimes to the point of explosion. That's what happened in Mexico. That's what I want to avoid here. Ah, here comes Gary. I invited him to join us for dinner so that we could finish the speech for tonight."

After introducing the speech writer to her children, they proceeded to the dining room, ate, and finished the speech. Gary Wilson then went to retype the speech while the President went to take a shower to refresh herself before her nationwide address.

The high pressure shower head, which Lyndon Johnson had had installed because of his insistence that a shower should be stinging and invigorating, did the trick; the President felt alive again. Hot, stinging water playing on her breasts, nipples and vulva began stirring feelings that had remained stifled for a long time.

Since her very painful divorce, Kathleen Lehrer had erected a shell around herself in an attempt to keep from being hurt again. She had only allowed one man to penetrate that shield since that time, and even with him she would not allow herself to become too emotionally involved. The fact that Steve was in Mexico City working in the barrios trying to help the poor, and was only able to visit her once or twice a year, enabled her to maintain that emotional distance and maintain her perspective about her relationship with the younger man.

Reluctant to remove herself from the pleasurable sensations of the shower, the President finally shut off the water and began drying herself. She then stood in front of the mirror for a moment, admiring her body, which had not changed, except for the fuller breasts of a mature woman, since she had been a teenager. Snapping out of her reverie, she then went into the dressing room, put on her bra, panties, pantyhose, and slip, dried her hair, and began applying her makeup in preparation for her address to the nation. A firm believer in not overdoing makeup, the President kept it simple, using just enough to enhance her dark blue eyes, high cheekbones and strong, yet feminine jaw, and applying just enough powder to keep her face from being too shiny in the glare of the bright lights required for the television cameras. Upon completion of the application of her makeup, the President then donned a simple black dress, which she wore because the country was mourning the victims of the Capitol bombing.

Listening to the news on the radio as she dressed, she was thankful that the possibility of a default by the Mexican government had not been mentioned. On top of everything else, she did not want to contend with a financial panic if at all possible, which is exactly what would happen if the worst case scenario that had been outlined to her earlier came to pass. She was hopeful that the measures decided upon at the meeting would be sufficient to stave off any panic that might occur.

Before leaving her bedroom, the President called her speech writer to have him meet her at the Oval Office for a last review of the text of the speech. She then turned off the radio, shut off the lights, and proceeded to the Oval Office in order to complete preparations for her first major address to the American people.

When she arrived there, she found technicians setting up and testing their equipment. Looking around at the organized confusion, she spied Gary Wilson trying to stay out of the way. She walked up to her speech writer, tapped him on the shoulder, and led him off to the small study off of the Oval Office where they reviewed the speech.

At ten minutes before 9:00, an aide stuck her head into the study to notify the President that she was needed for a sound and lighting check. When that was completed, she sat behind her desk, quietly talking with the technicians. The director notified the people assembled in the Oval Office when it was thirty seconds until air time. The room was silent. Fifteen seconds. Ten seconds. Five, four, three, two one. You're on. A male voice could be heard saying, "The President of the United States."

Kathleen Lehrer looked into the camera that had the red light on top lit and began.

"Good evening. I have requested this time this evening to inform you about what has been happening in the thirty seven hours since I became your President. That period has been the most intensive learning experience of my life. I am now acquainted with many of the very serious problems that we face; we are now beginning to get a handle on what those problems are and we are trying to come up with solutions to them."

"First, I would like to address two events that are occurring outside of our country that will have an impact on what we do. I would like to express my condolences to the families and friends of the President and Vice President of Mexico, as well as the other victims of the tragic uprising that occurred there today. We deplore the violence that was committed."

"I have placed all of our military forces along the Mexican border on alert to prevent any fighting from spilling over our borders. I would like to emphasize that these forces are on alert solely as a defensive measure and to protect the sanctity of our borders. As long as we are not attacked, or our allies are not attacked, we will not intervene in Mexico's or anyone else's internal affairs. We are however, available to help stop the fighting wherever and whenever we can be of assistance."

"Ambassador Garcia has not been in contact with representatives of the new government yet, but we are hopeful that such a meeting will be arranged as soon as possible and that this crisis will be resolved soon and with as little bloodshed as is humanly possible."

"We are currently conducting negotiations with Russia regarding the conduct of the war with Iran and our upcoming joint actions against the murdering mullahs. We are insisting on several conditions, especially mutual withdrawal from Iran at an agreed upon time after the cessation of hostilities. In the meantime, until we reach agreement, both sides will continue with air attacks and long distance rocket and artillery attacks in order to prepare for further action."

"We are hopeful that the war will be a short one. But, it must be remembered that we are fighting against a fanatical enemy who has many followers and who believe that to die in war will enable them to automatically go to heaven; therefore in addition to calling up the reserves which I have already done, I am federalizing the National Guard and resuming the draft in order to ensure that we have enough manpower to meet our needs. Conscientious objectors will have the opportunity to provide alternative community service in lieu of service in the military."

"Because of the turmoil in the Middle East, there is a very real probability that there will be an interruption of oil shipments. Because of this, it is imperative that we conserve energy and begin developing renewable and non-polluting sources of energy. We are in the process of developing a comprehensive energy policy that will address our short term needs during this crisis, as well as fulfill our long range goals of energy independence. I will be speaking with you again in more detail at a future time."

"I would now like to turn my attention toward the greatest threat to the stability of our society, the sorry state of our economy, especially the obscene budget deficits that have been plaguing this government. Deficit spending has traditionally been the way to revive a sagging economy. Unfortunately, when deficits get too large, inflation results as the government prints more and more money to pay its bills, rather than raise taxes which would lower the deficits, but tend to slow down the economy. Interest rates tend to rise as the government, which has first crack at available money that could be borrowed, soaks up a growing portion of that money just to pay the interest on its debt. Those interest payments are now the single largest item in the federal budget."