Interview with Jeffrey Schlaman

Subprime Factor
Jeffrey D. Schlaman
Synergy Books (2008)
ISBN 9780981546254
Reviewed by Richard R. Blake for Reader Views (7/09)

Today, Tyler R. Tichelaar of Reader Views is pleased to interview Jeffrey D. Schlaman, who is here to talk about his new thriller novel, “Subprime Factor.”

Jeffrey D. Schlaman is a former auditor and California CPA who currently works as a finance executive in the UK. “Subprime Factor” was inspired by the current credit crisis and fallout from the burst of the housing market bubble. A native of Auburn, California, he currently lives in England with his wife, Stacey, and their two children.

Tyler:  Welcome, Jeffrey. I understand “Subprime Factor” foretells the economic crisis we are currently in and also the creation of the Federal Reserve. Can you first tell us a little bit about the background of the novel, historically, in terms of when you started writing it—did you foresee the economic situation of today, or was it just good timing?

Jeffrey:  Thanks, Tyler. I started writing the novel in August 2007, just after the DOW hit its historic high. I had been watching the housing bubble and the stock market bubble for some time and had been telling everyone I knew how crazy this was for three or four years. I had started to lose credibility with friends and family I had advised against buying houses and staying out of the stock market. None of the mainstream media seemed to be acknowledging that anything was wrong. If it weren’t for a few bloggers—Ben Jones, Michael Shedlock, Max (Sacrealstats.blogspot.com) and a few others, I would have thought I was crazy. Thanks to them, I was confident my take on the markets was real, and I had the book finished in time for it still to be “prolific.”

Tyler:  Why do you think most people, especially the mainstream media, or even the players on Wall Street, didn’t foresee what was coming or chose to turn a blind eye to it?

Jeffrey:  Much like the dot-com boom, or the Tulip Bulb mania in Europe in the seventeenth century, we were caught up in a mania. Looking back, it is obvious things were wrong, but people were caught up in this debt bubble and anecdotes and slogans (like “they aren’t making any more land”) overcame logic and historical analysis. The ‘experts’ were drunk with all the money they were making. One of my favorite quotes of the time was from Chuck Prince, the then CEO of Citigroup, who nearly marked the peak of the bubble in 2007 when he was quoted saying:  “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” He acknowledged the problems that were coming, but basically said he didn’t care.

Tyler:  In writing “Subprime Factor,” did you hope to shed light on this situation, or did you just want to use it for a good story?

Jeffrey:  My intention was definitely to warn people about the severe economic consequences that were coming down the road, and, maybe even more importantly to explain why. The book was published just a few days before the bailout bill, making some of the warnings too late to matter. But I still believe most of the consequences haven’t been felt yet. Now, more than ever, it is time to be very careful with your finances.

Tyler:  How did you decide on the title “Subprime Factor” for the book—what did you want it to say to people as their first introduction to the book?

Jeffrey:  To be perfectly honest, I wanted to name it “The Crunch” but my publisher insisted on something else. We agreed on “Subprime Factor.” Subprime mortgages were still seen as the culprit of the tightening economy at the time, and were big in the news. We now know that subprime loans were just the tip of the iceberg.

Tyler:  Will you tell us about the situation the main character, Doug Boyd, finds himself in at work that begins his trouble?

Jeffrey:  Doug Boyd is an honest, hardworking accountant, who has put his career above all else. He takes his job, and profession, seriously, and he refuses to bend the rules in order to please his bosses or his clients. Public accounting is an interesting profession in that its sole purpose is to give an independent opinion—but the client still pays the bill. It is the only profession I know of that has this kind of role. And at some level, there will always be this conflict in the profession. Management hires the accountants, the board oversees the audit, but the public, or outside stakeholders are the ones who really rely on them. I believe that whenever the group that controls the hiring is different than the group that relies on the service, there will be an issue.

Tyler:  What kind of company does Doug work for, and how does that effect his job and what he’s asked to do at work that he refuses to do?

Jeffrey:  Doug works for a public accounting firm. As I mentioned, his real responsibility is to the investors and the public, but his paycheck comes from the company that he is hired to audit. Doug refuses to drop his ethics to make his boss happy, even at the cost of his career.

Tyler:  Do you feel Doug’s situation is similar to that of other people in the financial world where dishonesty is becoming more and more apparent?

Jeffrey:  Definitely. When your paycheck—your livelihood—depends on a flawed system, it is only natural to protect that system. Sometimes consciously, sometimes subconsciously. I heard one time that humans can rationalize anything, if it benefits them.

Tyler:  Will you tell us a little about each of Doug’s friends who go camping with him?

Jeffrey:  They are all regular people. Flawed, corruptible, caught in between real life and a need to be seen as successful. Martin, the blogging conspiracy theorist, is the most idealistic. But he is alone, broke, largely ignored, and so far out there that he is unable really to be part of society. Phil is an FBI agent, who devotes all his time to his idealistic job, but is heavily in debt, and has engaged in mortgage fraud himself. Paul, the mortgage and real estate broker, plays by the rules he believes he has to in order to get ahead. He feels entitled to a better material life, and will sacrifice his friends, his integrity, anything to get it. All the characters are likeable and dislikeable. I based them all on myself.

Tyler:  That’s interesting, Jeffrey. As a writer of fiction myself, I feel all my characters represent parts of me, or parts that could develop in me given certain circumstances. Besides obviously your financial background influencing the characters’ development in terms of their jobs, did you find it disconcerting in some ways to base the characters on yourself since some of them are dislikeable?

Jeffrey:  I tried to make the characters human, and while they are all based on different aspects of myself, the aspects are taken to extreme to make them more interesting. And I admit, like most people, there are some pretty dislikeable aspects to my personality.

Tyler:  Who are the people out to get Doug—is it his boss, or are there bigger players involved?

Jeffrey:  You have to read to find out. The main protagonists are Doug’s boss, the CEO of the investment bank and the Secretary of the Treasury. If you read very carefully, you will note some inferences to the groups that really hold the power in the world—those that control the government.

Tyler:  Are we talking along the lines here of conspiracy theories—they are great fun in fiction, but do you feel in your novel they mirror any reality—should we then take any part of the book seriously?

Jeffrey:  There are some vague inferences to groups that I would classify as purely conspiracy theories. When I’m signing books, I usually include the following message:  “Sometimes the conspiracy theory is conspiracy reality.” If you look back at how the Federal Reserve was formed, it is clear to me there was a conspiracy. People denied that the PPT (Plunge Protection Team) existed just eighteen months ago, but now it is widely acknowledged that this group of people has enormous power to manipulate the economy—and it isn’t done in secret anymore. Keep in mind the book is fiction and not all of it should be taken seriously, but the lessons and situations very closely resemble reality.

Tyler:  Obviously, “Subprime Factor” is a thriller, but would you classify it as anything more—would you say, for example, it is educational for readers, or is it just good entertainment?

Jeffrey:  I hope so. My main purpose in writing the book was to educate the public on some of the key economic principles on which our economy is based. These are principles that are obvious, and understood, but rarely mentioned. Most business majors and MBAs have no idea how money is created or how the government checkbook works. These are extremely important issues, rarely debated. If the American public all understood these principles I think things in government would change very quickly.

Tyler:  Jeffrey, would you say you’ve been influenced in your writing by any other authors, books, or films?

Jeffrey:  By far, my favorite author is James Clavell. Though he wrote fiction, he has taught me so much about history and how the world works that it is incredible. I also am a big fan of Douglas Adams—I love a good laugh. When I was writing the book, I envisioned the cheesy movie “Office Space,” but the topic was much more serious. Several edits later, it is more serious than humorous.

Tyler:  Will you tell us a little about your writing process? Where do you first get your ideas and how do they process through to the completion of a novel?

Jeffrey:  I started the process by identifying key business issues I wanted to expose. Then I developed characters who would be involved in those issues first-hand. I chose the settings based on my hometown and places I have spent a lot of time, and locations with historical meaning. Once the key people and places were established, I developed the story as best I could. I had a lot of help from numerous people. My first draft and the final draft are very, very different. Fortunately, the final draft was much better.

Tyler:  Do you have plans to write any more books, and if so, will you tell us about them?

Jeffrey:  I won’t say yes or no, but there has to be an issue that I am passionate about. I don’t want to waste my time or the readers’ unless I feel like I can help them learn.

Tyler:  Obviously, you were passionate about today’s economic situation. Do you have any advice for our readers once they finish reading “Subprime Factor,” such as other resources or books to read to learn more about our nation’s economic background, or personal decisions they can make to improve matters?

Jeffrey:  The best personal decision that people can make is to be very cautious about spending and skeptical about letting others manage their money. I would also encourage them to learn about the Federal Reserve Bank and think hard about the role it plays in society today. The daily newspaper is filled with more unbelievable business and economic news lately than I could have even imagined writing two years ago. Our world is changing fast, and I’m not convinced it is for the better. I hope the public pays attention, and acts accordingly.

Tyler:  Thank you for joining me today, Jeffrey. Before we go, will you tell us about your website and what additional information our readers can find there about “Subprime Factor”?

Jeffrey:  Please see the website at www.subprimefactor.com and read the book. I believe you will be educated and entertained. Thanks, Tyler, for taking the time to interview me.

Tyler:  Thank you, Jeffrey, for the educational and entertaining interview about “Subprime Factor.” I wish you much luck with your book.

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