[Marxism] Sex and Money: Are Women Regulators Different?

Dbachmozart at aol.com Dbachmozart at aol.com
Sat Dec 27 09:27:57 MST 2008



 
Sex and Money: Are Women Regulators Different? 
By _Dean Baker_ (http://www.alternet.org/authors/4755/) , _TruthOut.org_ 
(http://www.truthout.org/) .  Posted _December  27, 2008_ 
(http://www.alternet.org/ts/archives/?date[F]=12&date[Y]=2008&date[d]=27&act=Go/) . 
 
It is hard not to notice that two of the regulators who  stand out for doing 
the right thing in this incredible financial mess are women. 

_http://www.alternet.org/reproductivejustice/114997/_ 
(http://www.alternet.org/reproductivejustice/114997/)   
It is hard not to notice that two of the regulators who stand out for doing  
the right thing in this incredible financial mess are women. Brooksley Born, 
as  chair of the Commodity Futures Trading Commission under President Clinton,  
wanted to regulate credit default swaps and other derivative instruments back 
in  the late 90s. Her effort was _torpedoed by Clinton's economic 
heavyweights_ 
(http://www.washingtonpost.com/wp-dyn/content/article/2008/10/14/AR2008101403343.html) : Alan Greenspan,  Robert Rubin and Larry Summers. 
More recently, Sheila Bair, the chair of the Federal Deposit Insurance  
Cooperation (FDIC), has been a pesky voice, arguing that the purpose of the  
financial bailouts is not to ensure that the Robert Rubins of the world get to  keep 
their day jobs at the Wall Street banks. She has been arguing that the  banks 
that received public money should be required to rewrite mortgage terms so  
that more homeowners are able to stay in their homes. 
The role of these two women is surprising because finance, and its  
regulation, continues to be an area that is heavily dominated by men. Therefore,  it is 
striking that just about the only regulators who stand out for trying to  do 
the right thing in this tsunami of garbage finance are women. 
While some of the luminaries of the economics profession might seek to  
explain the unusual role of women regulators by biological differences between  the 
sexes, there is a more obvious explanation. Basically, the women who enter  
the financial world have not been fully integrated into the club. They are 
still  outsiders. Therefore, they are more likely to blow the whistle on the sweet 
 deals that can make hundreds of millions for the boys, while leaving the 
rest of  us out in the cold. 
This point was made explicitly in a surreptitious campaign to undermine  
Bair's standing in the Obama administration. According to one of the _anonymous 
complainants_ 
(http://www.nytimes.com/2008/12/11/business/11bair.html?scp=2&sq=sheila+bair&st=nyt) , Bair is not a team player. 
This statement was intended as an indictment of her conduct as FDIC chair,  
but it actually looks like the highest possible form of praise. After all, this 
 team of financial regulators makes the 1962 Mets look like world champions. 
If  Bair doesn't fit in, then this is all for the good. 
If we needed any further evidence that the financial industry suffered from  
too much deference to insiders, Bernard Madoff filled the gap. He apparently 
ran  a simple-minded Ponzi scheme for 30 years, stealing tens of billions of 
dollars  from wealthy individuals, private charities and even large banks. 
When some investors and reporters raised suspicions about Mr. Madoff, no one  
bothered to seriously investigate because he was such a good guy. After all, 
he  belonged to all the right clubs, generously supported charities and was 
even a  founder of the Nasdaq. 
The regulators don't investigate respectable people like Madoff, and this is  
precisely the problem. 
The regulators are not supposed to be friends of the financial industry. They 
 are the cops, who keep the industry from running off with our money. 
Remember,  the big actors in the industry all benefit from a government insurance 
policy  called "too big to fail." 
As any good believer in the free market knows, the finance boys will do  
everything they can to maximize the value of this government insurance policy.  
This means taking the biggest possible risks since, at the end of the day, the  
taxpayers, not the firm's creditors or executives, will pick up the tab. The  
financial regulators are the ones who are supposed to keep the banks from 
taking  advantage of their government provided insurance, in addition to keeping 
them  from ripping off pension funds, small city school districts, private 
charities,  and any other suckers they find. 
It remains to be seen whether the Obama administration will be prepared to  
seriously regulate the financial industry. President Obama did pick a woman,  
Mary Schapiro, to be head of the Securities and Exchange Commission, but her  
past associations with the financial industry make her look like one of the  
boys. 
In the holiday spirit, perhaps we should give Schapiro and Obama the benefit  
of the doubt. But the reality is that the US financial industry is a 
cesspool.  Cleaning it up must be a top priority for the Obama administration. The 
public  must insist on a much smaller, cleaner industry and long jail sentences 
for the  folks who brought us this economic disaster. 

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