Terrance Heath

It's a Man's, Man's, Man's Meltdown

Filed By Terrance Heath | December 31, 2008 12:00 PM | comments

Filed in: The Movement
Tags: feminism, financial crisis, public works, Treasury Department

This is a man's world
But it wouldn't be nothing, nothing without a woman or a girl

He's lost in the wilderness
He's lost in bitterness

~ James Brown, "It's a Man's, Man's, Man's World"

It's been written many times already that 2008 was quite a year for women. Whether it was a good year or an "annus horribilis," may depend on whom you ask, but the financial crash and ensuing downturn suggest that if it hasn't been a horrible year, it hasn't exactly been an "annus mirabilis."

If you're part of a minority group, or group historically excluded from holding power, however far you've come, you know that there's nothing like a crisis to make it clear how far you've yet to go. When the rest of the country catches a cold, the saying goes, your group gets pneumonia. And when you find yourself left out i the cold, usually it's because policies and decisions that you have little say in.

After noting in November that there was not a scratch on that glass ceiling, Marie Cocco notes that reality also means there are no women the parade of CEOs through congressional hearings, explaining their part in wrecking the economy along with their corporations.

Today's brainteaser: Name the top female executives who were forced to go before Congress, explaining why their companies made multibillion-dollar mistakes that helped wreck the economy but nonetheless deserve billions in taxpayer bailouts.


If you can't come up with any, it's probably not because you haven't been captivated--and enraged--by the drama of corporate chieftains shifting uncomfortably in congressional hearing rooms. You're getting a bird's-eye view of what Catalyst, the business-backed research group that's been tracking women's advancement in the corporate world since the 1960s, saw when it took its annual look into the nation's executive suites: Women just aren't there in numbers sufficient to make them visible.

As far as why that is, Cocco quotes president and CEO of Catalyst, Irene H. Lang.

"It used to be thought that it was just a matter of time, that the more women we produced, the more women would move up," says Ilene H. Lang, president and CEO of Catalyst. "That might be true in the colleges, that might be true in middle managers." But at the very top of the corporate hierarchy, barriers to women's advancement that are rooted in stereotyping still block their paths.

Boy, do they ever. The most well-cited example by now is probably the story of former CTFC head Brooksley Born, and her treatment at the hands of the some of the big boys of finance when she sounded the alarm about the impending (now current) crisis.

A decade ago, long before the financial calamity now sweeping the world, the federal government's economic brain trust heard a clarion warning and declared in unison: You're wrong.

The meeting of the President's Working Group on Financial Markets on an April day in 1998 brought together Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert E. Rubin and Securities and Exchange Commission Chairman Arthur Levitt Jr. -- all Wall Street legends, all opponents to varying degrees of tighter regulation of the financial system that had earned them wealth and power.

Their adversary, although also a member of the Working Group, did not belong to their club. Brooksley E. Born, the 57-year-old head of the Commodity Futures Trading Commission, had earned a reputation as a steely, formidable litigator at a high-powered Washington law firm. She had grown used to being the only woman in a room full of men. She didn't like to be pushed around.

Now, in the Treasury Department's stately, wood-paneled conference room, she was being pushed hard.

Boy, was she ever. Katrina vanden Heuvel summed up the response.

In 1997, Brooksley Born warned in congressional testimony that unregulated trading in derivatives could "threaten our regulated markets or, indeed, our economy without any federal agency knowing about it." Born called for greater transparency-disclosure of trades and reserves as a buffer against losses.

Instead of heeding this oracle's warnings, Greenspan, Rubin & Summers rushed to silence her. As the Times story reveals, Born's wise warnings "incited fierce opposition" from Greenspan and Rubin who "concluded that merely discussing new rules threatened the derivatives market." Greenspan deployed condescension and told Born she didn't know what she doing and she'd cause a financial crisis. (A senior Commission director who worked with Born suggests that Greenspan and the guys didn't like her independence. " Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street.")

In early 1998, according to the Times story, one of the guys, Larry Summers, called Born to "chastise her for taking steps he said would lead to a financial crisis. But Born kept at it, unwilling to let arrogant men undermine her good judgment. But it got tougher out there. In June 1998, Greenspan, Rubin and the then head of the SEC, Arthur Levitt, Jr., called on Congress "to prevent Ms. Born from acting until more senior regulators developed their own recommendations." (Levitt now says he regrets that decision.) Months later, the huge hedge fund Long Term Capital Management nearly collapsed-confirming some of Born's warnings. (Bets on derivatives were a key reason.)

"Despite that event," the Times reports, " Congress (apparently as a result of Greenspan & Summer's urging, influence-peddling and pressure) "froze" Born's Commissions' regulatory authority. The next year, Born left as head of the Commission.Born did not talk to the Times for their article.

Vanden Heuvel continues, "What emerges is a story of reckless, willful and arrogant action and behaviour designed to undermine a wise woman's good judgment." Deborah Barrow writes that Born is just one of four "wise women" whose judgment went unheeded when it might have helped. The other three are: FDIC chief Sheila Bair who has been virtually alone within the Bush administration in fighting to prevent foreclosures while taxpayers bailout one financial firm after another, and butting heads with "some people in the Republican Party who resent the idea of helping others"; bank analyst Meredith Whitley, who was rewarded with death threats for calling out Citibank on its toxic mortgage derivatives, and downgrading its stock; and blogger Tanta (a/k/a Doris Dungey) of Calculated Risk, whose 20 years of experience in the mortgage business led her to be among the first to suggest that Citi was in serious trouble due to mortgage backed derivatives.

So, why didn't any of the men who basically ran the economy listen to these women before they ran it into the ground? Male privilege and the reality that being male makes being heard more likely might have had something to do with it. Maybe the meltdown is just a testosterone-driven affair.

Perhaps there's a reason that everyone has overlooked: hormones.

If a research paper published earlier this year is correct, traders have become prisoners of their endocrine systems -- testosterone, the elixir of male aggressiveness, during a bull market; cortisol, a steroid that helps the body deal with stress, when the bears take over.

The study suggests that raging hormones might explain why the men who rule the global markets send them rocketing up when they're on a roll, and swooping down when they get scared, exhibiting judgment that can remind you of the guys in an Adam Sandler movie.

Whatever the case, if there was a lack of women at the top in this crisis, there will be plenty of women hit hard by the financial downturn, from the female-headed households surviving on 52% of the typical household income, and the moms doing without so their kids will have holiday gifts. And, if it's not done right, women may be left out of the infrastructure-focused stimulus if it's not done right.

The bulk of the stimulus program will provide jobs for men, because building projects generate jobs in construction, where women make up only 9 percent of the work force.

It turns out that green jobs are almost entirely male as well, especially in the alternative energy area. A broad study by the United States Conference of Mayors found that half the projected new jobs in any green area are in engineering, a field that is only 12 percent female, or in the heavily male professions of law and consulting; the rest are in such traditional male areas as manufacturing, agriculture and forestry. And like companies that build roads, alternative energy firms also employ construction workers and engineers.

Fortunately, jobs for women can be created by concentrating on professions that build the most important infrastructure -- human capital. In 2007, women were 83 percent of social workers, 94 percent of child care workers, 74 percent of education, training and library workers (including 98 percent of preschool and kindergarten teachers and 92 percent of teachers' assistants).

...Maybe it would be a better world if more women became engineers and construction workers, but programs encouraging women to pursue engineering have existed for decades without having much success. At the moment, teachers and child care workers still need to support themselves. Many are their families' sole support.

A public works program can provide needed economic stimulus and revive America's concern for public property. The current proposal is simply too narrow. Women represent almost half the work force -- not exactly a marginal special interest group. By adding a program for jobs in libraries, schools and children's programs, the new administration can create jobs for them, too.

So, it's a man's, man's, man's meltdown alright, but it's one that wouldn't have been if some of the men in charge had listened to their female colleagues. And it may be a man's, man's, man's recovery if women's voices aren't heard and their concerns not explicitly included in an economic recovery.

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Marla R. Stevens Marla R. Stevens | December 31, 2008 2:44 PM

Fine piece, Terrance -- and you may have hit on something broader in the real dangers inherent in ignoring the lessons of parity failures. For instance, 9/11 could well be as much due to sexism in ignoring the warnings of former FBI Special Agent Colleen M. Rowley as it was a failure of inter-agency information sharing/coalescence and Shrubbite ignore-all-things-Clintonesque hubris.

Real, not token, diversity works and parity requirements as tools to achieve diversity works even better.

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This tract makes a critical analysis of credit based, free market economy, Capitalism, and proves that its dysfunctions are the result of the existence of credit.

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It solves most of the puzzles of macro economy: among which Business Cycles, Stagflation, Greenspan Conundrum, Deflation and Keynes' Liquidity Trap...

It shows that no fiscal or monetary policy, including the barbaric quantitative easing will get us out of depression.

It shows that Adam Smith, John Maynard Keynes, Karl Marx and Alan Greenspan don't contradict each other but that they each bring a meaningful contribution to a same framework for understanding macro economy.

It proposes a credit free, free market economy as a solution that would correct all of those dysfunctions.

In This Age of Turbulence People Want an Exit Strategy out of Credit, an Adventure in a New World Economic Order.

Read It.

Brynn Craffey Brynn Craffey | January 1, 2009 12:51 PM

Excellent piece, Terrance!

It really makes you wonder how different the scenario would have played out--and where the world would be economically now--if there was true parity in the financial industry between men and women.


superb column