Brooksley Born gets Payback!
April 8, 2010
by Amy Siskind
|Not to be missed….
Back in December 2008, I wrote an article for the Daily Beast called Women Scorned. The article was about women who speak out about problems on Wall Street and are then silenced by their male counterparts/bosses. One woman that I featured was Brooksley Born:
The implosion of the derivatives market and the subsequent collapse of many of our prominent financial institutions could have been averted. Back in 1998, there was a clear and unequivocal warning. A woman by the name of Brooksley Born, then chairwoman of the US Commodity Futures Trading Commission, warned Alan Greenspan, Robert Rubin, and Larry Summers of the risks inherent in not regulating derivatives.
Michael Greenberger, a senior director at the commission at the time, noted: “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.”
Summers, then deputy to Rubin, took it from there: “In early 1998, Mr. Rubin’s deputy, Lawrence H. Summers, called Ms. Born and chastised her for taking steps he said would lead to a financial crisis,” The New York Times reports.
Well, yesterday, truth finally won out - Brooksley got to question Alan Greenspan.
I can’t find a link to embed, so to watch you will need to click here and the questioning by Brooksley starts at 1:58 but she really gets rolling at 2:05.
She rightly points out that the derivatives market was flagged as a problem as early as 1996, but that the President’s working committee – including Greenspan, Rubin and our old “friend” Larry Summers, did NOT heed the warnings of a market that would explode in size and then almost demolish our economy. Greenspan took no steps to put any sorts of regulation in place.
Brooksley also reminds him that this cost tax payers $180 billion for AIG alone! To say nothing of the fact that it also brought our economy to its knees. Brooksley also points out that Greenspan’s failure to regulate banks led these institutions to become to0 interconnected through derivatives, and then too big to fail!
Ah, if the boys’ club had only listened! This, and some of the other women who have issued warnings and been silenced like Sheila Bair, Iris Mack and so many more. I’ll be watching with a big grin as the truth comes out – and each time we find, the lack of women (and men who are incapable of working well with women) is a recipe for disaster!
MY ONLY COMMENT IS…..THIS WOMAN BROOKSLEY BORN SHOULD BE THE NEXT SUPREME COURT
JUSTICE….DON’T PASS OVER HER TWICE
SHE DID EVERYTHING SHE COULD TO SAVE THE AMERICAN ECONOMY AND THE WORLD ECONOMY ALSO WHILE AYN RANDS PUPIL HEADED THE FED. RESERVE AND DID NOTHING!!!!!
SHE TRIED TO WARN OF THE PENDING DISASTER OD DERIVATIVES AND CREDIT DEFAULT SWAPS.
SHE TIRED TO GUARD THE AMERICAN PEOPLES MONEY AND SHE WAS CRUCIFIED FOR IT…
SHE WAS RIGHT ….GREENSPAN RUBIN AND SUMMERS WERE ALL WRONG..
THANK YOU
JIM WASKLEWICZ
THanks for the link! Anyone who saw the PBS documentary on this has to wonder how she remains so calm? He was so arrogant in his position years ago and he still is. I never liked Greenspan. Whenever he would speak as Fed Chair I would wonder if he was really, really smart and talking above me (despite the fact that my backround is in finance) or if he was talking a lot of smack. I now know it was and continues to be smack! So frustrating!
Greenspan is out of the loop. I want to see Larry Summers questioned on this and I want to know what he’s doing now to fix the mess HE contributed to.
Great discussion Amy, I don’t see anywhere the discussion that there were several women, in government, at the banks (and even at Harvard to Summers, regarding Harvard’s endowment investments), warning about the impending crisis.
And now this:
“Citigroup executives apologize for not averting market crisis”. Can we make them return their high priced wages, bonuses, and golden parachutes? I even think that a criminal investigation should be opened.
There is no learning, socially, if there is no accountability.
http://www.washingtonpost.com/.....04865.html
But this was change…Rubin groomed Summers and Geithner.
“Robert Rubin returns:
Behind the scenes, Rubin still wields enormous influence in Barack Obama’s Washington, chatting regularly with a legion of former employees who dominate the ranks of the young administration’s policy team. He speaks regularly to Treasury Secretary Timothy Geithner, who once worked for Rubin at Treasury.”
http://www.politico.com/news/s.....z0kYbFre7M
They should apologize to the women they ignored.
What is perplexing about all of the financial crisis which has caused enormous hardship for so many citizens is that President Obama appears not to have learned much from the story of Brooksley Born’s early warnings. It appears that he does not have a team of rivals as his closest financial advisers. With a team of rivals working closely to achieve consensus, future crisis might be averted.
Oh, and by the way, Loralee, your analysis of Greenspan talking smack is right on! He avoids answering questions directly by becoming mired in industry talk that takes the listener down winding paths to nowhere.
In the late 80’s I had the honor of handling the media relations upon the naming of the business program at Claremont Graduate University for Peter Drucker, author, business consultant and sage. Peter was a professor at the school and beloved resident of our community and much of the world. Coincidentally the stock market took a huge dive the day of the dedication and we had all of the national media at a morning press conference, hoping that Peter would comment on the stock market. He did, but only to one reporter from the Los Angeles Times. In his one sentence comment, which I don’t remember in its entirety, he pointed to “pigs at the trough,” as the problem, making reference to the greed at the highest level on Wall Street and the corporate world. Things haven’t changed much, have they?
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