Would the Economy be Different if They Had Listened to "The Girl?"

Even though I worked at the Securities and Exchange Commission for a number of years, trying to explain things like derivatives was never my strong suit. I got the whole concept of futures trading when I took my Agricultural Law class in law school (my farmer dad was VERY proud when I aced that puppy!), so I had an inkling about what they were, but, fortunately, I was never called on to actually explain the intricacies of how they work.

But one thing I knew was this -- there is a certain amount of financial mumbo-jumbo (that's a technical term, don't ya' know) involved when you have to derive something from another thing. Things get murky when you're not talking about simply buying or selling something like a stock or a commodity.

There is an amazing chronological tutorial in the Washington Post today about how we got in the mess we're in now that everyone should read. In case you're strapped for time, here's the PunditMom synopsis:

1. In the late 1990s, Former Commodity Futures Trading Commission Chief Brooksley Born (the "girl") tried to convince the male heads of the SEC, the Federal Reserve and the Treasury Department that it was essential that the government keep strict oversight on derivatives trading.

2. Born was a career attorney with lots of expertise in this area of the law. Former SEC chair Arthur Levitt was the former chair of the American Stock Exchange. Fed Chairman Alan Greenspan has served in many large corporate boards, including J.P. Morgan. Treasury Secretary Robert Rubin was formerly with Goldman Sachs.

3. The "boys" kept pushing for what they called voluntary regulation and compliance over derivatives trading (which would eventually lead to lax regulation on mortgage-backed securities) while Born advocated for actively enforcing the regulations on the books, especially for financial instruments that were a little out of the ordinary.

4. Born lost.

5. Some existing regulations were taken apart to benefit the derivatives indutry. The Gramm-Leach-Bliley Act was passed, taking down the walls separating commercial and investment banking.

6. Levitt and others now think they might have been wrong and that their actions may have contributed to the current fiscal crisis.

Ya' think?

So, the moral of the story? Next time, listen to "the girl."

Joanne Bamberger usually writes about politics at her place, PunditMom, but is focusing more on the economy these days. She is also a Contributing Editor for Politics & News at BlogHer. Her political analysis and commentary have appeared this political season on CNN, Fox News, ABC.com, XM Radio POTUS '08, and others.

Follow Joanne Bamberger on Twitter: www.twitter.com/PunditMom

Comments

[castlerider]

I absolutely agree.

Not because Born was a female, but simply because she was right, dammit.

I'd like to know,.... Where is she now?

[Veri]

No. Nothing would be different. Get over it.

If women were in charge, things would be different. Not much, but different. There would still be war, famine, disease, greed, etc...

Human nature. We all suffer from it. So, whether women or men are in charge, you still get the same joys and sorrows. Sorry. That is the way it goes.

Oh, and I seem to recall some *men* warning of the same disaster. Were they listened to? No.

Now, if we could get equality for women where it is lacking... such as in Equal Pay and other initiatives, even I would applaud.

It is time for men and women to acknowledge are differences and celebrate them. Not to try and become some abstract, hermaphroditic ideal that Mother Nature has not yet perfected.

Thanks.

[prettypony]

No, this can't be.....according to Bill O'Reilly the financial meltdown is all Barney Frank 'sand Chris Dodd's fault, and well, of course, Bill Clinton's. He wouldn't lie would he???

[blueskybigstar]

Born Redemption. Too bad things have to get so bad to have to say "I told you so."

[schatsie]

Yes, I would like to see her in charge of Treasury.... Someone who has a clue... The idea of these Goldman Sachs people gives me the creeps, they all believe in trickle down which never did...Give them an inch and they take a billion!

And then Bobby Maxwell back at the Department of Interior so that we can shut down the Federal give away of the natural resources.... specially to the oil companies, Alaska takes good care of their royalties and we need to do the same.

And New Mexico's Michelle Lujan Grisham for Secretary of Health or something... She actuallly was fabulous on the NEWS HOUR tonight.