It''s 1982 in Ronald Reagan''s America, and the country is riding high on a seemingly unstoppable wave of greenbacks. Money''s flowing fast and loose, the Savings and Loans have been deregulated, and in a small town somewhere between Philadelphia and New York City, mild-mannered realtor Joey Stratford is about to "make billions" on the sweetest development deal to ever come down the Jersey pike-but he might have to sell his soul first.

That''s the scene set by Good Faith, the latest novel from Carmel Valley resident Jane Smiley, author of the 1992 Pulitzer Prize-winning A Thousand Acres, the best-selling equine romp Horse Heaven, and a host of other books, fiction and non. Smiley, probably the biggest name presently hiding out in Carmel Valley, has been praised as "a diverse and masterly writer" by The New York Times, while Time magazine wondered, in a review of Horse Heaven, "Is there anything Jane Smiley cannot do?"

Although she has written in all four major narrative forms-comedy, epic, tragedy and romance, a goal she set for herself years ago- Smiley''s writing style remains distinctly hers. It''s direct and unflowery, with a biting wit and snappy dialogue that is absolutely authentic.

In Good Faith, a Knopf publication to be released April 22 in an impressive first printing of 200,000 copies, the author''s lightly caustic voice is filtered through the consciousness of Joey Stratford, the novel''s protagonist and narrator. Newly divorced and eager to sample the sexual wares of the pre-AIDS suburban marketplace, Joey dabbles in adulterous waters with his business partner''s married daughter Felicity, while succumbing to the financial temptation offered by the smooth-talking, Italian-suited Marcus Burns.

Burns claims to have quit the IRS because, he says, taxes are for suckers too dumb to know how to avoid them; he''s "a guy who knows all the rules-which ones you can break and which ones you can''t."

There''s big real estate money to be made in the New York suburbs and Burns aims to make it-with Joey''s assistance. He quickly sweeps the dazzled Joey into his grandiose scheme to develop the historic 580-acre Salt Key Farm, and the hapless real estate agent''s life is never the same again.

Coast Weekly caught up with Smiley last week at her home high in the hills off Carmel Valley Road, where the author lives with four dogs and the youngest of her three children-her 12 ("or 13, I''m not sure") horses board nearby in Watsonville, close enough for her to ride every day. Smiley has lived in Carmel Valley since 1996, and in this house since 1999. She showed up for her interview wearing a baseball cap smashed down tight on her straggly blond hair, a white sweatshirt with the faded image of a horse''s head on the front, and skin-tight, dusty green jodhpurs. Obviously, once you''ve won a Pulitzer you don''t need to dress for reporters.

COAST WEEKLY: Where did you get the idea for this book?

JANE SMILEY: A Thousand Acres was set in the summer of 1979. Moo [a comedy about life at a Midwestern agricultural college] was set in 1989. So I wanted to write another book about the ''80s, another book about land use. Someone told me stories about real estate speculation in the ''80s, and I''ve always been interested in the Savings and Loans crisis; it kind of meshed. When I started in with this, I thought it would be fun to write about the Savings and Loans and about real estate speculation, especially because we''re in an era of real estate speculation again.

You think writing about real estate and banking is fun?

Yeah. It''s always fun to write about new things. It''s kind of a puzzle to put together the various parts of the subject. For me, it''s not fun to write about a young girl who falls in love and her boyfriend isn''t interested in her. What a bag of...It''s fun to write about money, it''s fun to write about greed, it''s fun to write about corruption and chicanery and scamming and scheming.

Was this based on any place you knew?

No. I lived in the Midwest and then in California. I''ve spent a month or two back East, and I went to college at Vassar, but I didn''t ever live there.

You say Joey lives an hour and a half from New York, but you never clearly state that the book is set in New Jersey. Is that intentional?

It''s set somewhere between Philadelphia and New York. Not far from New Jersey. It might be New Jersey. It''s definitely not California. You wouldn''t have the same kind of real estate speculation story in California, and you wouldn''t have people in California who were as unsophisticated as the people in this book.

How much research did you do for this book?

I read a good book about S&Ls, and I looked at a college book called Fraud 101, about typical scams accountants would look for. The thing that struck me in that book is the guy said the only job of the accountant is to make the books balance. It''s not their job to make them balance honestly.

You call your new book Good Faith, an ironic title, considering what happens in it. Do you believe that good faith still exists in the world?

It''s hard to think it does. So many people are ready to defraud the average taxpayer and the average consumer. My last book was about horseracing. I think we''re arrived at a really strange time in the history of the West, when horseracing is more honest than the general world. Horseracing is regulated. It has a long tradition as the place where unsavory people gather, where fraud is the order of the day, but it''s highly regulated because it takes place in a specific spot, and it has specific structures. Now horseracing is more honest than public life. That''s really saying something.

Why did you choose to write this book in the first person as Joey, a man?

I wrote a couple of novellas in the first person as a man: Good Will and The Age of Grief. An earlier novel, The Greenlanders, wasn''t written in the first person, but I imagined the main person, Gunnar, as the central consciousness of the book.

It was quite difficult to write as Joey, and I don''t know if it was because he was a man and it was written in a man''s consciousness, or if it was because he didn''t know what was going on, he didn''t know what was about to happen to him. My previous book, Horse Heaven, was in the omniscient third person and that was really fun to write because I could get into everybody''s head. I could know everything about the story and communicate whatever I wanted. In this case, I knew much more about the story than Joey did. I had to restrict myself to his point of view while writing, and be careful not to reveal more than I intended to. It was quite a technical challenge. It needed a lot of rewriting.

There are some pretty steamy sex scenes, and you write them from Joe''s perspective. Was it hard to write about having sex as a man?

No, I just changed ''penis'' to ''cock'' or ''dick.''

Women in your books are often marginalized, acting at the behest of men. But the women in Good Faith seem in charge of their lives.

That''s very much a feature of the ''80s. Women like Felicity, who had been married for 20 years, said, enough of that. Felicity felt the revolution had left her behind. She didn''t get to participate in all the exciting things that were going on. Women in the ''80s were testing themselves. I can''t even count the marriages that broke up for that reason. In the ''70s, single people were having fun. Then there was a group that was slightly older, whose children were elementary school age. In the early ''80s they said, look what we missed out on. They started having more freedom, and then Boom! Aids, VD, herpes.

I think of the ''80s as a horrible time.

Barbara Ehrenreich wrote a book about the ''80s called The Worst Years of Our Lives. When Ronald Reagan was elected, the results didn''t come in until really late. I went to bed and woke up in the morning and was holding my two-year-old in my arms when I heard Reagan had been elected. I burst into tears. I felt the kind of world I wanted to live in, a world of public interests and common aspirations and shared ideals and an end to racism and sexism, that world was being progressively dismantled by the Republicans. And it was cynically done. The ''80s were really terrible. There was a terrific flaunting of power and wealth and status. Look at the clothing people wore-women had these huge shoulder pads and those high heels and gaudy gowns. It was a time of wretched excess that was very off-putting.

There''s a very moralistic tone to the book. It''s been called a cautionary tale about the perils of excess and the need to set limits.

I look at the American Dream as a moral dilemma. What price do you pay for success? Is the American Dream about being rich and having all kinds of goods and a big piece of property in Orange County and a house in Hawaii? If so, then isn''t it a strange dream on which to base your existence? Or is the American Dream to be happy and useful and enlightened?

I grew up in the ''50s, and for my generation-I was born in 1949-people always asked you, what do you want to be when you grow up? There was an extra push to it, because we knew that children in Soviet Russia couldn''t be whatever they wanted to be when they grew up because they were communists. So the onus was on us not only to choose something ambitious, like to be president, but also to succeed. I remember that very distinctly. For people of my generation, Joey''s age, the idea that previous generations had of just growing up and becoming useful citizens, you could no longer do that. It didn''t prove anything to the Russians if you grew up and were a useful citizen. You had to grow up to be a Cold War hero. It''s been a terrible thing for the Baby Boomers. It means we are constantly driven by a sense of failure-you had all the opportunities in the world, and look what you did, you just became whatever you became. Why can''t Joey just be a Realtor in a small town, enjoying himself and not working too hard?

Did you always know you wanted to be a writer?

No, I was going to be a horse breeder until I was in college and it looked like that wasn''t going to happen.

You''ve said writing is a skill that can be learned by anyone, rather than a talent.

Not writing itself, but novel-writing. Writing itself demands a certain verbal fluency, but you can be a novelist without having verbal fluency if you have good insights into how people work, insights into psychology. There are plenty of novelists who are not good stylists but their work is compelling anyway because they have other kinds of novelistic intelligence. There are other novelists who are fabulous stylists but who don''t have a sense of the larger picture.

Most short stories and poems are primarily motivated by verbal fluency. That''s why poets and short story writers mature early and their early work is really interesting. They have a new way of looking at things, and they can express it. Lots of novelists mature late. Virginia Woolf is a good example, or George Elliot. Tolstoy didn''t publish until he was in his 40s. What they''re developing over those years is a larger conception of things, and the wisdom that carries the story.

I think that novel writing is more based on the things you learn rather than the things you''re born with. The thing that every novelist has to have is this overwhelming desire to write a novel: If they have that desire, they''ll become a novelist.

Who do you enjoy reading?

I''m currently doing a big project concerning the history of the novel, so I''m reading about 100 novels. Some of them I''ve never read before, others I have. I have been enjoying George Elliot and Dickens, my favorites for a long time, but I''m also enjoying Daniel Defoe a lot and Sir Walter Scott-I thought he was great. I didn''t enjoy Dostoevsky. I thought I would, because I always have before, but I didn''t. I enjoyed Trollope a lot. I''m just finishing with the 19th century and haven''t gotten to the 20th century, so I don''t know who I''ll enjoy there.

In college I loved Dostoevsky, and the Russian symbolists like Biely and Bulgakov. Now I think a lot of those novels seem forced.

They seem hysterical to me, like being at a weekend party with a lot of crazy people. I found that to be true when I was reading Wuthering Heights, a book I adored for years and years. I read it recently as an adult, and I thought it''s beautifully structured and there''s wonderful insights in it, but the life of most adults is not like that. The life of most children in middle school is. The kind of desperation of the story is very youthful, and I''m just not interested in that anymore.

Your people are very real, very ordinary. Yet they are not dull.

Right. Ordinary people are never dull, but the great dilemma of the novel is, how to write about an ordinary person and have it be worth an entire novel? Once you throw off kings and queens and knights and ladies, then how do you distinguish your protagonist from any other woman or man the reader might meet? If Joe Shmoe lives at 628 Ash St. in Ashtebula, Ohio, what would make him worthy of 500 pages of investigation into his inner life? A lot of novelists think he has to have some special quality, some undiscovered genius. Or the alternative is, he has to be just like me, the author. And those are dead ends, as far as I''m concerned. I think that what makes Joe Shmoe interesting is what happens to him. If he reacts in an authentic way, then he''s worthy of a novel.

What else are you working on now?

I''ve just finished the first draft of another horse book, a non-fiction book called Two Gals, A Horse and the Baby Jesus. It''s set around here and in Arcadia.

I was just going to ask whether you''d considered setting one of your books locally.

Actually, after I wrote [The All-True Travels and Adventures of] Lidie Newton, I thought maybe I''d have Lydie end up in Monterey. Instead of taking the short route from Kansas to California, I thought I''d have her take the long route from Kansas to England to Russia to Japan and then to Monterey. But that novel was kind of a failure commercially, so my agent said, don''t do it.

When will you start your next novel?

Probably another four years from now. I want to finish these other books first. It will be interesting to see what kind of novel I''ll write after I''ve read more than 100 other novels.

Do you have any interaction with the local arts community?

No. I mostly interact with the local horse community. I have 12 or 13 horses: two are racehorses and two went to the racetrack and tried it out and didn''t make it; two are very old brood mares who are waiting to be called up yonder; several are riding horses, show horses.

Do you find it inspiring to write in Carmel Valley?

It doesn''t really matter. Once you get to the point where I am, the motivating factors are the same as they are for anybody: You have to earn a living, you have to maintain your production, you have to keep at it. Those years where all those other factors come in-where you live, whether it''s a stimulating place, who else is there-those are way in the past.

How did winning the Pulitzer Prize 11 years ago change your life, other than you were able to give up full-time teaching?

That wasn''t exactly the reason I gave up full-time teaching. I don''t know, I got more famous, that''s all. And even that''s an intangible. The person herself never knows how famous or not famous she is. It''s not something you can feel or understand. The only way I have of gauging is, with each time I go out on a book tour, there are more people at a reading, or more people seem interested in my work. And sometimes people recognize me in the street.

What really changed my life was buying my first horse. And I might have done that without the Pulitzer. I bought the horse because I had a baby. It was the summer of 1993, the baby was 18 months old and I was bored with spending all my days caring for him and writing books. I''d been doing it for years-caring for a baby, writing books, caring for a baby, writing books. I happened to pass a horse farm in northern Wisconsin and I stopped and asked if I could take riding lessons.

So owning and riding horses is a relatively new part of your life?

Yes. I rode when I was a young person, but I didn''t ride in the interim because I was just writing books and taking care of babies. On a typical day I get [my son] off to school, then I write in the morning, ride a couple of horses in the afternoon, then I pick him up. Or I ride in the morning and write in the afternoon, then pick him up. I have to keep producing. I write every day. It''s easy, a habit now. I''ve been writing something or other every day since 1970-that''s 33 years. If it isn''t good today, I''ll fix it tomorrow.

Being a novelist isn''t the American Dream. It''s much more fun than the usual American Dream. It''s absolutely fabulous. You go in your office, it''s four steps from the kitchen, you sit down and you think about the same thing you thought about yesterday, the same thing you''re going to think about tomorrow. It''s a really nice life.

And being a successful novelist is really fun. You don''t feel that you betrayed yourself to become successful. If you were lucky enough to have your work get a good reception, then it''s like rain falling. It''s not, ''I deserve this because I''ve worked so hard.'' There are so many novelists that have worked hard, yet the rain doesn''t fall on their farm. There''s this constant feeling of, well, gee, I lucked out-the rain fell on my farm, and I got a good crop and I took it to market and got a good price for it, and lucky me.

Would you like to see Good Faith made into a movie, like A Thousand Acres?

I don''t care. I''m a novelist and I don''t really care about movies. I like to watch movies, but...I had to laugh when I saw Adaptation. Everybody hated the ending, but I thought all writers would be appreciative of the fact that she went after the screenwriter with a gun. That''s what every writer would like to do. They only said she was going after him with a gun because he found her stash of that drug. What she was really doing was defending her book. And more power to her. Look what he did to it! Too bad she didn''t get him.

-Good Faith will be available at local bookstores beginning April 22.