When FDR devised the policies which led our country out of the Great Depression, he had a secret weapon -- his wife, Eleanor. Regrettably, as we struggle our way out of the worse economic crisis since then, Treasury Secretary Geithner is attempting to silence one of the few female voices in leading us out: Elizabeth Warren. This despite ample evidence that having more women in financial leadership, ala Lehman Brothers and Lehman Sisters, is optimal for balancing risk in our financial system.
The two men leading our country's economic policy, Geithner and Larry Summers, seem unwilling and perhaps incapable of working with women. That is why President Obama should not only nomination Elizabeth Warren to head the Consumer Finance Protection Bureau, but also proactively seek to add gender balance to his economic inner circle.
Geithner's opposition to Warren is not his first clash with women in power. One of his first acts in the role of Treasury Secretary was to attempt to push out FDIC Chairwoman Shelia Bair. As Rep. Barney Frank observed: "I think part of the problem now, to be honest, is Sheila Bair has annoyed the 'old boys' club...we have several regulators up in the tree house with a 'no girls allowed' sign..."
Geithner's inability to respectfully interact with women in positions of power was further in evidence when he was questioned in April by the Congressional Oversight Panel. Warren rightfully asked Geithner about AIG's funneling billions of taxpayers' dollars to Goldman Sachs: Do you know where the money went? Geithner could barely conceal his disdain: watch his angry, condescending response here.
Of course, Warren was correct. Taxpayers did not need to pay Goldman Sachs one hundred cents on the dollar, resulting in Goldman booking a $6 billion dollar gain. Geithner should well know. Also in 2009 under his watch, our government strong-armed creditors of Chrysler into taking massive discounts to their original investments.
Like Geithner, Larry Summers has a well documented pattern of not being able to work with and silencing women. In fact, our current economic crisis could have been adverted if Summers had paid attention to Brooksley Born, then chairwoman of the US Commodity Futures Trading Commission.
In 1998, Born issued an unequivocal warning to Alan Greenspan, Robert Rubin, and Summers of the risks inherent in not regulating derivatives. Summers was one to silence Born: ... "Summers called Ms. Born and chastised her for taking steps he said would lead to a financial crisis." 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."
Likewise, in 2002, derivatives whiz Iris Mack voiced concerns to Summers about Harvard Endowment Company's use of risky derivatives. A few months late, Mack was fired. Another woman silenced: another warning of risk unheeded.
The problem goes deeper still. President Obama's economic inner circle includes only one woman: Christina Romer. And of course, it is hardly a secret that tensions are high for Ms. Romer and her all male colleagues, including Larry Summers: Mrs. Romer was joking, she said in an interview, adding, "There are only a few times that I felt like smacking Larry." Yet few laughed in the president's presence.
One can only imagine. Romer is girl trying to operate in a boys' club.
Which is why it's time for President Obama to knock the door off of the boys' club and let the girls into his inner economic circle. We can hardly afford to lose another immensely qualified woman. The opportunity cost to our economic prosperity is simply too great.
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