A Glass of Wine Among Friends

Manhattan, New York — Edward was the first to speak. “So, Walter, this is a lovely place, but why do I feel like you brought me here to steal my money?”

From behind a polished mahogany bar, Walter Morganstern pours dark red wine into crystal port glasses.  “Eddie, you haven’t had any money since the crash of ’87, but I invited you anyway.”

Six men, four in suits, two in jeans, all except Walter in their forties, sit in Walter’s personal library — surrounded by hard bound books, some collectibles, mostly law, history, economics, and philosophy.  No fiction, no paperbacks.

“Yes, but the millions he has buried in real estate are harder to steal.” This was Patrick Fitzgerald, founder of New England Energy — the youngest of the group.

“Sure, millions  . . .  unless he tries to sell it.”  This was Al Sabo, CEO of USAMortgage.  “For that you need buyers.”

“Sure, Al, but lenders like you make your fortune lending to companies who don’t need a lender — just a hiding place. I’d love to introduce you to some REAL buyers. Walter, if you didn’t have the best wine collection in Manhattan I wouldn’t have time for this. But what are these rich guys doing here? John doesn’t even drink.”

Walter places a glass of 1948 Taylor Floodgate in front of four of them, tea in front of John. “You’re all here because you have enough money to have decisions to make about this world-wide financial mess we’re in, and you’re young enough to actually care about the outcome. Pat, your twins are, what, Juniors at Yale?”

“Sophomores, and its Princeton.”

“Of course. My apologies. So for you — all of you — the future isn’t just somebody else’s problem.”

“So, what’s Al doing here?” Laughter and raised glasses all around.

“Hasn’t the mortgage crisis taught you anything? Buyers think they own things, but lenders know the truth, don’t they, Al?”

“Ah, the truth — and it ain’t pretty.  So, what ARE we doing here Walter?”

“We’ve got two more guests coming before we get serious.”

“UH-oh, Walter’s going to get serious on us.”

“If you saw the label on that port you wouldda guessed something’s up. Walter, not even you can get a bottle of 1948 Floodgate for less than $800.”

“If you know your labels that well, Al, you know that the best ports drop off a cliff after 60 years. He may have paid that much for it, but he couldn’t get that much for it today. Either he’s been saving it for us or he’s unloading it on us. Which is it Walter?”

“Nothing we bought in the last decade is worth what we paid for it; and that’s part of what you’re doing here.” A buzzer sends him off to answer the door. “I’ll be back. Pour two more of those, will you Ed?”

Walter comes back with his last two guests. “Gentlemen  . . .  you too, Sabo  . . .  I want you to meet a couple of people I went to school with. Lew Frazier’s the only one of us still selling anything in this economy, owns a small chain of grocery stores in Virginia — is it six stores, Lew?”

“A dozen.  People still gotta eat.”

“I think those of you who can read know Maureen.  She writes for the local fishwrapper. She’s here to remind us that we guys aren’t as smart as we think we are.”

“Yes, I’ve read your stuff. You and my wife gang up on me twice a week. Tuesday and Friday, right?”

“Glad you’re paying attention.”

“Lew, Maureen, his is Albert Sabo, our own token predatory lender.”


“An endearment, Al. This is Pat Fitzgerald, he’s trying to keep us warm this winter without bankrupting us.”

“Pleased to meet you.”

“Edward Faletti is a venture capitalist. He buys small software companies and tries to call it investing.”

“Don’t you have to make a profit once in awhile to call it investing?” More laughter.

“The snide one there, that’s Dan.  He’s a travel writer, sells tours to Italy, and makes fun of the rest of us. Says an economy based on products is doomed. Prefers to let other people pay his way to Europe twice a year instead. He sells experiences; says they hold their value better than commodities.”

“Sounds good to me. Walter, aren’t you going to let them sit down.  Here, have a seat.” Ed hands them each a glass. “His port is better than his manners, honest.”

Walter sits on a barstool. “I suppose I could ask all of you how your businesses are doing and you’d all give me bunch of numbers.  But if I asked if you were having any fun, I suppose I’d get a different answer.”

“Fun? Whoa, boy.  When was that on the menu?  I haven’t had ‘fun’ at work since  . . . ”

“Right, you can’t remember, can you?”

Remembers. “. . .  since I sold Al that bridge in  . . .   where was it, Al, Brooklyn?”

“OK, Walter, now that we’ve all insulted each other, what’s on your mind?”

Walter looks at each one of them. They have had some fun together over the years —and they’ve worked some serious problems.  They all thought of themselves as powerful optimists, capable of making a difference when the market needed an adjustment.  “So, let’s sum it up: nobody’s making any money, nobody’s having any fun, except maybe Dan here, and nobody thinks there’s much of a future for any of us.  Have I got it about right?”  Silent agreement all around.

“Future? It’s tough to see past the end of this bottle you’re pouring from  . . .  you’ve got another one around here somewhere, I hope.” Nobody laughs, so he drops the frivolity. “OK, I get it.  These are hard times.  But haven’t we pulled everyone out of hard times before?  At least once in this very room, if memory serves, eh Walter?”

“Yes, a couple of you were here in ’87 when we pulled a few strings and got the train back on the track.  And some of us know that Patrick’s grandfather sat with a similar bunch of guys at Hyde Park with Roosevelt back in the ‘30s.  Each time, somebody had the foresight — and optimism — to imagine a future even though it wasn’t obvious to most people that there was one. Would it surprise you to know that I invited you here for just that reason?  Who knows, if you guys are as smart as I think you are, maybe you’ll think of something that Maureen will decide is worth writing about.”

Walter peels back the first sheet on a large pad of flip charts on an easel in front of the bar and takes the cap off a blue marking pen.  “Here are the kinds of ideas we’re hearing [starts writing]. Now, I think we can do better . . .  perhaps we have an obligation to do better, eh?”

“Walter, forgive me  . . .  I know you’ve been around longer than the rest of us; but do you actually think a bunch like this can make a difference this time?  The world has changed a lot, don’t you think?  I can imagine what you want to do; but I’m not sure we can get there from here. We’ve heard plenty about being too big to fail, but is it possible that we’ve gotten too big to succeed?”

“When I was your age, Pat, that’s what I thought. Let me understand — you believe that the problems we have are too great, the solutions too decentralized, and the global economy is too big to get our hands around.”

“Sure, but it’s tougher than that.  I recall Professor Belotti telling us back in Econ 101 that the amount of money involved in macroeconomics is only part of the story. It’s the velocity of money that is at the core of both problems and solutions.”

“So, you believe that economic activity has gotten too fast for us to influence it?”

“With respect, Walter, when my grandfather was your age, that’s what he thought. The problem with the economics at work today is that it has gotten so slow that it barely moves. Many of us in this room survived the recession, at least so far, because we do have access to cash; but the cash we can lay our hands on today is the result of slowing everything down, laying people off, stopping the supply chain, letting inventories draw down, investing in nothing — sure that gives us all a pocketful of cash; but whatta you gonna do with it?  Al, here’s got money to lend, but who’s he gonna lend it to? Surely not people who are unemployed; not those facing foreclosure. Lew’s got money in the bank — but that’s because his payroll is two-thirds of what it was. Ed isn’t promoting new products because customers aren’t buying new products — heck, they’re barely buying his established products; and if they are, they’re paying bargain prices, right Ed?  So, lots of the people we do business with are holding on to cash because hiring people won’t increase sales, unemployed customers don’t get excited about new products, and lending money to optimists isn’t going to reduce foreclosures and bankruptcies — we tried that, eh?”

“So, Walt, what do you think we can write on those flip charts that will get people to save more and spend more at the same time?  What will we plan for the day when we wake up and realize that the federal budget goes almost entirely to pay the salaries of American employees; and budget cuts just toss them out of work?  What plan can we pour out of that bottle that will get the Congress to do anything to increase tax revenues to keep paying those salaries? If we cut the budget without increasing revenue, can  our unemployed workers produce products that the world will buy?  How long will other countries keep lending us money when they realize that our consumers can’t afford to buy their products?”

“We can all sound pretty smart when we ask the questions, Lew; but we don’t sound so useful when we get around to answering them.  The bottom line? — The one thing everybody needs is customers. Customers need to have jobs. Who has enough money to hire ten million people with little hope of return on the investment?  I don’t. Do you?”

The silence was complete and prolonged.  Finally, Walter put the cap back on his blue marking pen.  John put down his cup of tea.

After awhile, Maureen broke the silence.  “So, this is what you guys want me to write about?  That you can’t get there from here?”

More silence.

“Not yet,” Walter said. “We’ve got to wait until Dan plans his next vacation — then at least we’ll know where we’re going.”


3 Responses “A Glass of Wine Among Friends”

  1. Dan Faletti says:

    I haven’t yet figured out entirely how to operationalize these thoughts in the current environment (either real or as fictionally presented here), but I am currently operating on my default life maxims. They are two pieces of standout advice I have received in my lifetime plus one of my own.

    1. Don’t let other people decide your mood for you.
    2. Don’t blame other people for your problems.
    3. Every real world problem has a real world solution. How optimal a solution may be achieved depends on how much time there is and how much “will” can be brought to the table.

    I think there have been several conversations that were devoid of the politics, but when it comes time to decide what to actually “do” the politics seems to be consistently getting in the way (i.e. not enough “will” and too eager to blame). If the solution were presented truly devoid of the politics, I think the problem would begin resolving fairly quickly after the “best” steps were identified. I would try to get everyone to agree on the “best” steps. But, with each person already their own political self, it is truly hard to imagine the openness of the participants that would be required to go all the way to success.

  2. PapaDan says:

    Dan — Thanks for your comment. I know you well enough to believe that, if you found yourself in a conversation like this fictional one, you would have made an insightful suggestion that would have moved the conversation in a productive direction. Perhaps, you would have answered Maureen’s question a different way. Or you might have suggested something for Walter to write on his flip charts. What might you have said?

  3. Dan Faletti says:

    In response to the question “Who has enough money to hire ten million people with little hope of return on the investment? I don’t. Do you?”, I would state that we do not have to find such a person. What we have to find is 1000 people who can hire 1000 people and 40,000 people who can hire 100 people and 100,000 people who can hire 10 people and 400,000 people who can hire 5 people, and 1,000,000 people who can hire 2 people. The first step is for Walter to set up 5 flip chart pages for these 5 groups of “paired” people. Then the next step is to start identfying who the people actually could be, the employers and the employees. We need to assess what needs already exist or can be developed (e.g. the next big thing) and also assess what the skills are of the people who are currently out of work.