Is Elizabeth Warren the next Brooksley Born?

This is cross-posted from my blog how it feels to be fed .

Here is President Obama trying to make a funny at the White House Correspondent’s dinner. He says, "We’ve also begun to change the culture in Washington. We’ve even made the White House a place where people can learn and can grow. Just recently, Larry Summers asked if he could chair the White House Council on Women and Girls."

Eye-rolling aside, the idea that the Obama administration has "begun to change the culture in Washington" is the real joke. 

That Washington culture is explored in a Frontline documentary about Brooksley Born , who warned, in no uncertain terms, Greenspan, Rubens, Geithner (who was second-tier at the time), Summers and everyone else at the Fed and the Treasury Department and ALL OF CONGRESS about the apocalyptic danger of an unregulated derivatives market in the mid-90s. To get her to be quiet, they basically threw the sexist book at her. They tried to intimidate her, they yelled at her (if you were thinking that was Summers, you’re right), told her she was out of her depth and didn’t understand her field and that if they needed to bring in a lawyer to explain to her the role of her small regulatory agency, the CFTC , they would.

They also talked about her behind her back. In the documentary, the then-SEC Chairman Arthur Levitt says that he "was told that she was irascible, difficult, stubborn, unreasonable ." Those adjectives read like the medieval Book of Wicked Wives . He later said that he’s "come to know her as one of the most capable, dedicated, intelligent and committed public servants that I have ever come to know."

Maybe, just maybe they didn’t fail to listen to her because she was a woman. Isn’t that possible? Well, no one is saying that is was the only factor involved, but it definitely played a major role in why Greenspan, Ruben and Summers tried to destroy her rather than merely ignore her.

And, in the case of Larry Summers, just like, say, John Mayer, if someone leaves a trail of misogyny-crumbs throughout his career, he will inevitably reveal that he lives in an insane, baroque, spectacular gingerbread house of hate for women. With the icing eaves and the candy cane fence and everything. And it becomes obvious that they’ve really spent a lot of time building this deliberate and detailed structure.

As I’m sure you’re all aware, Larry Summer’s big reveal came in 2005. He said in a prepared speech , that "[i]t does appear that on many, many different human attributes-height, weight, propensity for criminality, overall IQ, mathematical ability, scientific ability -there is relatively clear evidence that whatever the difference in means-which can be debated-there is a difference in the standard deviation, and variability of a male and a female population." And he goes on to say, not only are women stupider than men, we are worse at our jobs because we are less inherently dedicated . Those wombs are so distracting. Oh, and also, if women were as good as men at their jobs, the market would have snapped us up. But since there are so few women in high-powered jobs than it’s definitely because we are less capable, not because there is some kind of flaw in the system. Because, in the world of Larry Summers, the market never fails.

The point is, Larry Summers is wrong about why women and people of color aren’t in positions of power in exactly the same way that he was wrong about the market. His worldview is that the market can’t be wrong and therefore, since there are fewer women in positions of power than men, women are stupider than men AND a two bedroom condo with a shaky foundation in Daytona Beach really is worth $700,000.

So, clearly, when Summers was yelling at Brooksley Born, he doing it from inside the insane gingerbread house of sexism that is his brain.

Even after a near-collapse of the economy in 1998, which went down just as Born had predicted, these men continued to discredit her. At the behest of Greenspan and his Pangloss Orchestra, Congress totally revoked Born’s regulatory powers and basically forced her to resign. Fast forward. The economy collapses. Brooksley Born is vindicated. Obama promotes her to a position of consequence and she works tirelessly to regulate the derivatives market. Larry Summers and Timothy Geitner are forced to slink, Nixon-like, into a retirement in which the only thing they have power over is their closets of now useless gray suits!

Not. Even. Close. As we all know, Larry Summers and Timothy Geithner are Obama’s top economic advisers. And, once again, we have a woman who is telling truth to power, and yet being shut out of the regulatory process.

Elizabeth Warren is the Chair of the Congressional Oversight Panel and yet she seems to have no power .

Elizabeth Warren is saying the exact same thing that Brooksley Born was saying more than 10 years ago. (You can compare their responses here and here. ) Basically, until we regulate these so-called "dark" markets we will continue having collapse after collapse after collapse. And people are saying the same thing about Elizabeth Warren that they were about Brooksley Born. She’s out of her jurisdiction. She doesn’t really understand the nature of the crisis at hand. She’s a lawyer and not a banker . Here’s Geithner reportedly saying that Elizabeth Warren would be a bad choice for Deputy Treasury Secretary because "Wall Street wouldn’t like" her.

Larry Summers, it turns out, is not alone in his thoughts about women’s ineptitude. The subtext here, and I have thought this in the coverage since the first days of the crisis but haven’t really been able to express it clearly, is that only men can be bankers. That is why when Larry Summer’s name was being batted around during the transition, the media and political climate was, "It doesn’t matter. Being a sexist is irrelevant when you’re thinking about the economy because the only people you’ll have to deal with are men. Because only men can be bankers." Only men can understand how to get us out of this mess and by speaking her mind, poor Elizabeth Warren is "blowing her credibility and overstepping her bounds."

Here is a really clear example of that media climate. Adam Davidson of NPR’s Planet Money yelled at Elizabeth Warren in an interview last year . He accused her of being biased because she is more concerned with the welfare of Americans then that of Wall Street. The Columbia Journalism Review published an article entitled , "So That’s Why the Press Isn’t Paying Attention to Elizabeth Warren: NPR badgers oversight panel chair over her legitimacy." Ryan Chittum writes that, "[i]f you want a peek inside business-press mentality, and why certain stories get reported and others don’t, you can do worse than start here. It sees Warren as an outlier whose views, based on decades of research, are suspicious. It would never, ever have badgered a former bank exec, say, like this if one had been chairman of the panel. "

Just as gender wasn’t the only factor with Brooksley Born being ignored and disrespected, it isn’t the only factor in the case of Elizabeth Warren. The fact that she is a woman and she is outside the elite group of decision-makers are self-reinforcing. Her legitimacy is questioned at every turn.

Instead of having a real position of power inside the Administration, Warren is trying to make an end run around Geithner by creating a new Consumer Financial Protection Agency. Her, I should say our, only hope is that this Agency will be approved by the Senate—where it is currently stuck.

Obama supports the creation of this agency, although the degree to which he is pushing for it’s creation I don’t really know. You’re probably aware of all of these facts as the Born case has been well-documented, but I find it really interesting that the arguments used against Elizabeth Warren are the same as the ones used against Brooksley Born.

The difference is, however, is that Warren has oodles of support from the public. She has become the only vioce of reason around and ordinary citizens everywhere, including Jon Stewart , respect her deeply. It was, after all, outraged comments on the Planet Money blog that prompted NPR to post the entire Warren-Davidson interview.


So, how can we push politicians to create Warren’s proposed panel?

JUST A NOTE: Nancy Pelosi appointed Brooksley Born to the Financial Crisis Inquiry Commission . One of the few places where I found that noted is the Speaker’s own website .


Join the Conversation

  • supremepizza

    Never expected to see a post on Elizabeth Warren here! Glad you did it. She’s a fave of mine. This negative press you cite is news to me. Everyplace I’ve seen her the correspondents have been on the edge of their seats listening to her. MSNBC is a big fan, especially Joe Scarborough of all people. Jon Stewart is also a big fan. She has an incredible ability to make really, really complex subject matter easy, common sensical, and even engaging. I don’t know that Wall Street attacks her because she’s a woman, or because she threatens their way of life. The business press in this country is as bad as the sports press, with a few exceptions they take as gospel what their hand fed by Wall Street & the industry and dismiss all other views as uninformed, and “non serious”. Its one big reason the collapse snuck up on a lot of people.

  • jouissens

    Alright, so Obama made a joke in extremely bad taste — at least he doesn’t call adult female professionals “sweetie” like all those testosterone-addled, Fox-news-addicted Republicans do. Oh, wait…
    I’m glad you put Summers’ 2005 absurdity back in the spotlight — obscene as rhetoric like that is, people tend to forget it quickly with the passage of time, and they do so at their peril.

  • GalFawkes

    Am I the only one actually snickered at Obama’s comment? What if he was diplomatically calling Summers out?

  • TD

    None of the things you mentioned seem all that different from when economists ordinarily disagree with each other, regardless of their gender. Things get heated, and the claims that the critic ‘doesn’t understand’ credit default swaps, derivatives, etc. were commonly directed at all critics regardless of gender.
    Economists disagree, bitterly, about most issues in front of them. Give 10 economists a problem, and they’ll come up with 20 proposals and 100 arguments why each one doesn’t work.
    Greenspan, Ruben and Summers tried to destroy her rather than merely ignore her.
    I’d have a different take on this. Politicians ignore the people they feel are irrelevant, they only attempt to destroy people they have some reason to fear. If they were indeed sexist, they would underestimate he weight and ignore her. If they fought her they must have acknowledged her as dangerous.

  • Spiffy McBang

    They can acknowledge her as dangerous and also be influenced by the fact she’s a woman. In fact, I would think that brings her to the “dangerous” level more quickly- if she’s anywhere near proving them wrong, they’re going to look worse (in their minds) than if a male economist was making equally salient points against their theories.

  • Spiffy McBang

    I wasn’t really aware of Summers’ history until now, but given the reaction of the crowd, I think you’re right about it being a subtle dig. And also in that light, I think it’s amusing.

  • TD

    I’m not so sure, certainly I understand the effect you’re talking about, but I’d think whether or not she’s considered a reputable scholar would be far more damaging to them than whether or not she’s a woman. I really think whether or not she was considered ‘dangerous’ would rely much more heavily on how well respected she is rather than on the basis of her gender.

  • Spiffy McBang

    The only thing I’m disagreeing with is that you sound like you perceive it as an either/or situation, and it’s not. Even your words relate to the point I’m making- we can debate how far the pendulum swings towards Warren, Born, or whoever being perceived as dangerous due to ability or gender, but it doesn’t go completely one way or the other. And as long as that’s the case, that means the gender aspect is coming into play.
    To be clear, scholarly ability is by far the most important aspect of this. But I do think you’d see a noticeable, though probably not severe, difference in how these situations played out if the dissenters were male.

  • TD

    The only thing I’m disagreeing with is that you sound like you perceive it as an either/or situation, and it’s not. Even your words relate to the point I’m making-
    I understand your point, and I believe that it is a real effect in many circumstances, I just don’t think so in this one. I just think that any person, male or female with Warren’s background would have received pretty much the same animosity and the same criticism.
    I’ve known quite a few economists and business people who have received the same condescending responses about issues like CDS and derivatives. Whether they were male or female didn’t really enter into it, it was that they were telling people that something wasn’t true, when those people desperately wanted to believe it was. So I have trouble believing that there is a noticeable effect of sexism when the treatment she got was not particularly different than the treatment I’ve seen (or have had recounted to me) that other people have received in very similar circumstances.