Will 2010 be the year of the woman? We asked prominent thinkers to discuss women’s changing roles in the economy. How has the crisis affected them? Are women the key to reform? What economic impact will they have going forward? We’ll explore all this and more in a special ND20 12-part series. Nomi Prins explains how women are prepared to stand up to male nonsense on Wall Street.
Eleanor Roosevelt once said, "Do what you feel in your heart to be right -- for you'll be criticized anyway."
I think the corollary to that statement is "Do not tolerate what you feel in your heart to be wrong, for you'll be living with the consequences of your silence."
Back in 2002, when I quit Wall Street, I followed Eleanor's words. At the pinnacle of a financial career, I was faced with the prospect of completely selling my soul to Goldman Sachs, and doing whatever it took to make partner and attain ridiculous wealth. It was an existence of actual physical races against men far more monetarily ambitious than myself, to the door of then- division head, Lloyd Blankfein, to take credit for anything I could. The alternative was quitting, becoming a journalist, and regaining my life, real-world perspective, and moral compass. I chose the latter and have never regretted it.
During the past year, the financial sector has done a lot of wrong. First, it nearly self-destructed. Then it engaged with a set of Washington elites to extract trillions of dollars of public funds to ease its pain. Now, it's posting record bonuses on the back of that assistance, in a disgustingly entitled manner, as if its profits are based on sheer skill, rather than federal aid, accounting tricks, and regulatory indifference. What's missing from this reckless scenario? Women.
No woman has ever run a major Wall Street firm nor the Federal Reserve, the NY Federal Reserve, or the Treasury Department.
No woman was at the head of the largest corporate scandals or failures.
Men ran the companies that imploded last fall and it was three men (Bernanke, Geithner and Paulson) that ran the areas that doled out most of multi-trillion dollar big bank bailout and subsidization funds. Men, as big bank CEOs, received the aid and went on to amass mega bonuses for themselves and their minions.
No woman asked the board for $10 million in bonuses as the firm was posting a $27 billion loss like Merrill Lynch's John Thain did.
No woman denied their firm needing federal subsidies, like JPM Chase CEO, Jamie Dimon or Goldman Sachs CEO, Lloyd Blankfein did, as they took TARP money anyway, while forgetting the rest of the federal assistance they got. No woman said her firm was doing "God's Work" when confronted with outsized post-bailout bonuses payments.
Of course, women weren't in the position of running these firms, so how could they have presided over their problems? Perhaps the attainment of such positions requires the shedding of a certain ethical code.
But, the question is, would the massive bailout of the financial sector have occurred, had women been at its helm? Indeed, Davos economists this year speculated that the presence of more women on Wall Street might have averted the downturn.
There's still time to heed their warnings.
Would a woman have tolerated an act deregulating the most dangerous derivative instruments? Not if former Commodity Futures Exchange head, Brooksely Borne, who spent three years warning former Fed Chairman Alan Greenspan and other power-men about the problems of deregulation had any say.
Would a woman have better monitored and questioned the money streaming from Washington to Wall Street? One did, chair of the Congressional Oversight Panel, Elizabeth Warren sent former Treasury Secretary, Hank Paulson a letter, asking him basic questions like, "Is Treasury imposing reforms on financial institutions that are taking taxpayer money?" Yet, the Treasury's answers were "non‐responsive or incomplete."
And it was a woman, FDIC chair Sheila Bair that pushed for a mortgage plan that would have helped homeowners rather than the banks that caused the crisis.
Going back to the scandals that opened this decade, it was three female whistleblowers that adorned the cover of Time Magazine as 2002 persons of the year; Sherron Watkins, former Vice President of Enron, Colleen Rowley from the FBI, and WorldCom's Cynthia Cooper for exposing the misdeeds of their respective organizations.
Of course, it is not just women that question corporate fraud or widespread financial risk. But for the most systemically compromising and expensive breaches of ethics and restraint, it has been women who have fought against the barrier of male nonsense to shine a light and an alarm.
Nomi Prins, a former managing director at Goldman Sachs, is a journalist and senior fellow at Demos. Her latest book, It Takes a Pillage, explores how banks are looting America.