What hath Bill Fair wrought?
Only the greatest self-inflicted business crisis in our lifetime, that's what.
Fair's path to business infamy started innocently enough: He and his business partner Earl Isaac invented the FICO credit score.
The little number that misrepresents our past and controls our future.
FICO first appeared in 1956: A time when the movie "A Beautiful Mind" showed us the promise of a new science called Operations Research. Fair and Isaac were just of the few of the academics who told us we could predict anything with the right mathematical information.
In the Soviet Union, this was not just a science, it was a religion - much to their later regret.
Our regrets have taken a bit longer.
Fair and Isaac thought they were giving bank managers a tool - one among many - to manage risk. They had no idea 55 years later idea federal regulators would turn it into an all-powerful monolith to automate credit decisions.
But that is what they have done.
As a result, if business owners have a ding or two on their credit, bank managers have no authority to lend their money at their risk - even if they have done business together for generations.
If they do, that puts their entire bank at risk from the unwelcome gaze of federal regulators.
This is the single impediment to kick starting our economy is stalled: The local roofer and carpenter and drywaller and painter cannot get working capital and credit to start and finish a job where they have submitted a winning bid. Even a government job. So they do not work.
Here is a typical example: After 30 years in the painting business, Joe turned the business over to his family, moved to Florida, and in between rounds of golf, took a flyer on a few condos. That didn't turn out too well.
So Joe went back to work. This time bidding on public contracts. Despite a great record in his community, Joe could not get bonding or working capital because of his now diminished credit score.
If, at this point, you are asking what does missing a few payments on a Florida condo have to do with his ability to finish a job to paint the local city hall, you get it: Absolutely nothing.
This is a true story that we see every day at the surety bonding company I co-founded. Federal regulators are using credit scores to choke off lending and kill small business owners all across the country.
Funny how one day federal lawmakers say they are doing everything they can to help small business. The next day, regulators undo it all.
These banking regulations can be fixed administratively by any President who cared to take a few minutes to figure it out. And a whole generation of small business owners can get back to work.
We are not talking about loading big banks up with more lousy loans. But local loans to local customers from smaller regional banks never had anything to do with the financial markets collapsed in 2008.
Yet they are the ones burdened - punished, really - for the sins of the big institutions that long ago stopped acting like banks and started acting like hedge funds.
No one is suggesting we ignore the actuaries. Nor is this another government give away.
That is not the way small business owners think. They just want to stay in business - and wonder why their government is doing so much to stop them from doing just that.
Robert Berman is CEO of Cinium Financial of Rock Hill, N.Y.