As stock markets around the world are plunging, various financial executives are claiming before Congress that it really wasn’t their fault and that they deserved their multimillion dollar golden parachutes and million dollar salaries and bonuses. At least one former executive was being retained as a “consultant” at a million dollars a month while, days after the AIG bailout, AIG executives held a resort retreat in California, to the tune of something like $440,000. Now, admittedly, what’s a few hundred thousand after you’ve blown billions, but it does tend to make voters and taxpayers a bit irritated.

The Federal Reserve and the Treasury keep pumping billions into the system, and what happens? Not much, because, as of the moment, the banks in general still refuse to lend. That means that either they’re so far away from meeting their reserve requirements that they can’t lend or that they have decided that they can’t make loans because they can’t trust anyone. Either way, that suggests a certain lack of competence in bank lending departments. To get around this, the government is now beginning to lend to corporations directly, based on commercial paper, so that these corporations have the cash to meet payrolls and pay suppliers.

Many years ago, I knew a banker who made the statement to the effect that, “I don’t lend on numbers and financials; I lend on people.” Interestingly enough, his children still carry on the family tradition… and that modestly sized bank is also still quite solvent. Years ago, he knew what most modern finance types don’t seem to have learned — anyone can juggle figures. It’s harder to juggle character, but with all the regulations, it’s also more and more difficult to judge character without facing a lawsuit for some form of discrimination or another.

Even so, there’s more than one kind of arrogance behind the financial and credit collapse. In addition to the executive pride and arrogance and privilege and clearly undeserved multi-million dollar salary and bonus package mindset — call that personal arrogance — there’s another kind. It’s the arrogance of the financial analyst, and the technical types who were so convinced of their models and the fact that nothing could go wrong.

Except… it did… and so badly that the entire world is going to suffer. Pension funds have already, on average, lost 30-40% of their value; housing starts are the lowest in decades, while foreclosures are the highest; credit card debt and failure to pay are skyrocketing; state budgets are plummeting; and the economy is closing in on losing more than a million jobs this year, and that’s before more than half of the bad debt has even surfaced.

And these executives, seemingly to a man, and most of them are men, have the nerve and arrogance to claim that they did nothing wrong? Yes, Americans have been spoiled. As a nation we over-borrowed and overspent. BUT, none of those in charge of lending and finance ever spoke up and said, “Hold it. You can’t borrow any more.” Nope. Instead, they flooded the market with unasked for credit cards and marginal home equity lines of credit based on over-inflated housing values. They increased credit card limits, and often made home loan prepayments or refinancing impossible, all the time relying on finance models most of them, under questioning, couldn’t possibly even explain, let alone justify in practical or moral terms. They also created so-called hedge funds that were so highly leveraged that it appears most, if not all of them, will be out of business before the meltdown is over, all the time seeking higher and higher returns, and ignoring the simple fact that the stock market, as a whole, cannot grow, over time, much faster than the sum total of economic growth, inflation, and capital inflows.

And now, when it’s all coming crashing down, they have the arrogance to say that they did nothing wrong in lending more than the people of the nation could possibly repay and in profiting personally from those excesses. And the worst of it seems to be that the executives who’ve replaced the ones who failed seem to have inherited the same arrogance that caused the problem.

One of my soon-to-be-published novels recently received a review which essentially said that the book was engaging and well-written, but the conclusion was perfunctory because it “leaves unresolved the larger issues of the role of magic in public life and the position of women in society.” Oh? And exactly how many reviewers would think of criticizing Jane Austen for not resolving the position of women in society? Or Tolkien for not resolving the issues of the role of magic in public life?

In case you haven’t gathered, the book is The Lord-Protector’s Daughter, and in it, the protagonist is faced with a nearly impossible situation where she must fight an extraordinarily chauvinistic culture and the expectations placed on her in order just to survive. She does more than that, but it’s clear that the reviewer expected one young woman to totally change society in less than half a year. I’m not bringing this up because I’m more than slightly irritated at the denseness of the reviewer, which I am, but because many readers — and reviewers — of F&SF exhibit what I’d call a “save the world expectation.” This expectation is endemic, so far as I can tell, only to two genres — thrillers and F&SF. No one expects Hercule Poirot to save the world, only to solve the mystery. In virtually all so-called mainstream literature, the characters may not even be able to save themselves, let alone the world. In romances, the characters only have to save each other.

Now… I’m not saying there’s anything wrong with F&SF books where characters save or destroy worlds, or galaxies. I’ve certainly written some. What bothers me is the expectation that this must always happen… or the book is somehow unfulfilling. I’m certainly not the only one to notice this, either. As a matter of fact, the sometime author, editor, and critic Matt Cheney made this observation about another of my books, Archform:Beauty:

Finally, I was particularly pleased with the resolution of the central plot elements. Though the mystery is solved and the bad guys get taken care of (and two of the characters even find love and at least momentary happiness), the triumphs of the novel are primarily personal. For the police and politicians, it was all one crisis among many, and for most of the citizens it was just a good news story for a day or two. What we, the readers, see is that for a handful of people, life has changed, but the world around them has not. Even though things are different for these characters, they still have to work their way through the world, they have to get through their days, they have the remaining moments of their lives to live. That, it seems to me, is a courageous ending for a book of this sort, perhaps even a subversive one…

Anytime a scholastic genre critic like Matt has to note that a book that doesn’t “save the world” is subversive, it certainly suggests to me that we have too many world-savers and not enough books that “merely” provoke thought… or heaven forbid, entertain without saving or destroying worlds.

But then, as someone categorized as “subversive,” I suppose I’m being optimistic when I hope that readers — and reviewers — won’t be disappointed when my characters don’t always save or transform the world.

I’m old enough to recall when one of the fads sweeping the country was “paint-by-the-numbers” kits, where anyone could produce a reproduction, at least of sorts, of a famous artist by simply matching the number on a tiny jar of paint with the number printed on a cheap canvas stretched across cardboard and dabbing each number with the correspondingly numbered paint.

The older I get, the more I’m seeing our society structure itself along similar lines. It seems like everything is analyzed “by the numbers” and then either quantified, evaluated, or replicated… according to the numbers. Vital services — such as medical care, road and highway maintenance, public safety, and education — are evaluated in terms of their cost-effectiveness for populations as a whole. The problem is that all too many people and situations don’t fit the numerical models. And numerical models seldom result in excellence, any more than paint-by-number kits resulted in great paintings.

In education, students’ futures are effectively being determined more and more by standardized tests, and teachers’ effectiveness is being measured more and more by the performance of their students on those tests. Besides the problem that there are students who test well beyond their real-life abilities and those who test below their potential, and the corruption of the system into teaching to the tests, there’s the even larger problem that the tests are designed to measure the ability to succeed in “intellectual” settings and occupations, and there’s also a tacit assumption that the abilities measured by those tests are the only ones that count. Now… I confess. I’m one of those who did well on tests, and to the test-designers and analyzers, I’m proof that the tests “work.” At what? Such tests are excellent at identifying a set of skills useful for perhaps ten percent of the population. twenty percent at most. And what about all the others?

I’m sorry, but, as well as I may test, you don’t want me trying to repair your leaky faucet, or your home wiring. I’m a good painter and a barely passable wood-worker, but keep me away from the mechanical side of your automobile or almost anything else. Yet the numerical, test-taking educational experts are acting as though it only takes people like me to run everything in society, because, by acting as though their tests measure all that is important, they effectively ignore those who don’t fit in a narrow numerical model.

I’m more than happy to pay experts in fields other than those I know… but experts like that are getting harder and harder to find. The problem is that, in our zeal to evaluate education “by the numbers,” we’re not steering those students who aren’t “intellectually” inclined to fields in which they could be both successful occupationally and financially. We’re treating every one of them as either intellectual successes or failures, because that’s what the numbers say.

In medicine, the numbers pressure for cost-effectiveness by the government and by insurers has resulted in fewer and fewer doctors who going into “general” or family practice, and those who do end up being pressured into seeing more and more patients for shorter and shorter visits… just to pay the costs of modern high-technology medicine. Reports are coming in showing that, in community after community, doctors are limiting the number of Medicare patients because the combination of excessive paperwork and low-mandated reimbursement results in their losing money on such patients… and in fact the inflation-adjusted real earnings of “family doctors” are declining, largely as a result of cost-effectiveness measures developed by the numbers and imposed on medical general practitioners.

On the other side, as I’ve noted in a different light in earlier blogs, the emphasis on financial success, by the numbers, has played a significant role in the housing/credit/mortgage melt-down, because almost everyone in the financial sector was focused on maximizing short-term yields and returns. Call it high finance by the numbers.

From the media to elite institutions, more and more, those lauded publicly are those who have been financially successful or who have been so and donated large sums of money, not necessarily those whose contributions to society cannot be easily quantified. Bill Gates is a figure known-world wide, because of the staggering “numerical success” of MicroSoft, but I can’t even recall the names of the men whose pioneering work in transistors at Texas Instruments made that success possible, and I doubt most Americans could.

All this emphasis on the numerical and quantifiable neglects some very basis aspects of life and society.

No student was ever touched — or inspired — by a number. No patient was ever healed by a number. No criminal was ever physically apprehended by a number. No fire was ever extinguished by a number. But excessive emphasis on numbers — from the stock mania of the 1920s that led to the Great Depression, to the body counts in Vietnam, to the dotcom and housing booms and busts of the last decade — has always led to one form of disaster or another.

Long years ago, when I was first involved in politics, my mentor was a courtly political operative named, believe it or not, Robert Lee. Bob Lee had an impressive record of masterminding unlikely political success stories, but he understood the basics of practical politics better than anyone I ever knew. He provided two basic insights about politics, among others, that have stuck with me and seem particularly apropos to the current situation. The first was, “Don’t mistake money for results.” By that he meant that too many politicians and political operatives concentrated on fund-raising when the goal wasn’t to raise money, but to get more people to vote for your candidate. In the end, what counted was not how much money you raised, but how many votes you got. The second point was that to win any political race, “you have to give people something to vote for.”

The current bailout effort in Washington, D.C., failed Bob Lee’s tests on both counts. The question isn’t how much money you pour into the bailout effort, but how you get the people and their representatives to support it and vote for it, because without support, all the money isn’t going anywhere. The second point is even more important. The way the issue was formulated, it didn’t give anyone much to vote for, but it gave them a considerable number of things to vote against. The administration failed to make the point that our entire credit/banking system is at risk and why it is. Because it did not, those who opposed the bailout weren’t voting against a solution. They were voting against excessive executive compensation and Wall Street extravagance, against using tax dollars to bail out Wall Street at a time when Wall Street’s mistakes have pulled down the entire economy, against a finance system that requires poor or middle-class borrowers to pay escalating mortgage costs while rewarding financiers, against a system that is perceived as destroying American jobs while granting multimillion dollar bonuses to those behind that destruction, and against a system that rewards crooked financiers while underpaying teachers, police officers, firefighters, and hundreds of other vital and underpaid occupations.

If the current Congress and Administration really want to stop the crisis, they need to give people something to vote for, and a reason to support their “reform package.”

Here are a few suggestions. First, cap total executive compensation for any company being bailed out at a mere 100 times the pay of an average worker in the company[as opposed to the thousand plus multiple in some cases], and also make any compensation paid above that amount in any other company in the USA non-deductible for tax purposes. Second, not only continue the existing prohibition on naked short-selling [the principal contributing factor to a number of corporate failures], but require any brokerage firm which does so to be closed for violating the law and [in case future administrations decide to turn a blind eye, as has the present administration] make any violation a cause for civil recompense and quintuple damages. This will get the attorneys working for the public good instead of against it. Third, limit the amount of mortgage payment escalations in adjustable rate mortgages to something approximately realistic [perhaps no more than a 10% increase in payments annually] and eliminate excessive prepayment penalties. Fourth, eliminate the securitization/bundling of sub-prime mortgages with other classes of mortgages. If the bankers and lenders want to bundle mortgages, let them do so, but make them bundle like with like. That way the risks are out in the open. Fifth, enact specific reserve requirements for all classes of debt, including CDOs and other collateralized obligations. Sixth, make violations of these provisions criminal offenses.

I’m sure other thinking individuals could come up with proposals that both make sense and which would garner public support, but these are a few that should be considered. There are other approaches, including a government-backed restructuring of debt markets with more private investment that might work as well… but whatever solution is next proposed must explain the positive benefits.

As for the argument that the financial community won’t like these… well, aren’t you the ones asking for rescue? Shouldn’t the taxpayers who are underwriting the rescue be the ones setting a few terms, particularly since the financial community hasn’t shown much fiscal or moral responsibility lately?

When I was writing an earlier blog, I ran it through the spell and grammar checker, and the grammar checker came up with three errors that weren’t, and suggested three very ungrammatical fixes. At first, I couldn’t figure out why, until I realized that I’d used a complex sentence structure with parallel subordinate clauses. Now, I obviously have nothing against technology per se, but this incident got me to thinking about the implications… and to a writer like me, those implications are between annoying and frightening.

It’s clear that the software doesn’t work nearly so well with complex phrases. Is that because it’s not worth while to design it to that level of complexity? Or that it can’t be? Either way, the end result isn’t good, because it’s applying simple rules to complex phrases, and that’s one of the biggest problems with most technology, especially when the user understands neither the entire field in question nor the limits of the technology. But, as in the case of word-processing software, technology often allows the marginally competent to look like the competent — until something really goes wrong.

These days, more and more young writers are relying on software to clean up their work, and every time I read manuscripts for a contest [which I do upon occasion] I’m reminded of this… and the fact that very few of them truly understand their native language.

Another problem that plagues me is the autoformatting feature of Word, especially when I have to go back three lines and put in a hard return so that I don’t end up with an after-the-fact indented paragraph. I mean, after all, I didn’t indent that paragraph when I typed it out. The software all of a sudden undid — or redid — what I did because I didn’t conform to its programming. This is a recurring problem with all computer-based systems. They do what you tell them to do, not what you intended to do, and, sometimes, they even do something that you had no idea they could do, and that you certainly didn’t plan on. The problems begin when there are features you don’t know are incorporated in the system. You think you’ve told the system to do one thing, but your instructions are reformulated by the system. This is an annoyance in word-processing, but it can be a disaster, as in the case of the Mars probe that crashed because there were conflicting measurement systems programmed into the navigation systems, systems of which some of the scientists programming the deceleration were unaware.

And, of course, just about the time I’ve finally worked through and understand most of the glitches in a system, some hot-shot programmers and profit-motivated executives re-design the software… and before all that long I’ll be forced to learn another new and improved system with unknown quirks or glitches, whether I want to or not, because sooner or later, things like the latest printers don’t have printer-drivers for the old software, and because I tend to burn through printers, that limits my choices. And that irritates me, especially since “new” is often not better. I can count on it to be more complex, but not necessarily better, and certainly not simpler… and that’s unfortunately true of most technology.