By Lois Phillips, PhD, Educational Consultant, 08/26/11

August 26 was Women’s Equality Day [1] but how far have women advanced really, and should we remain optimistic that women will continue to advance into top leadership roles? In “Sonic Boom: Globalization at Match Speed” Gregg Easterbrook is optimistic, predicting five future trends so enormous in scale that the author equates them to “sonic booms.” Easterbrook postulates that one trend is that women will contribute to the world’s supply of big ideas; he writes:

“In Western nations, women’s education levels and personal freedom already are on track to equal men’s; in much of the developing world, this could happen in the next two generations. Throughout history, most women have been denied a fair shot at contributing to research, engineering, business-management, and leadership roles. As this changes, there will be twice as many people applying their brainpower to the world’s problems.”

While this is an admirable and progressive point of view, I’m disappointed by three recent examples that demonstrate the push-back that can occur when well-educated, competent, and experienced professional women attempt to apply their brainpower to solving the world’s problems. Look what happened to Brooksley Born, Elizabeth Warren, and Sheila Bair when they asserted big ideas and attempted to speak truth to power.

Brooksley Born - Frontline Interview
Brooksley Born - Frontline Interview

Why did Congress allow the secretive multi-trillion dollar trading of “derivatives” to remain unregulated?

First, we have the case of Brooksley Born, presented in an excellent Frontline documentary called “The Warning.” Born is an American attorney and former public official who, from 1996-1999 was chairperson of the Commodity Futures Trading Commission (CFTC), the federal agency that oversees the futures and commodity options markets. An honors student at Stanford and Stanford Law, Born seemed like an excellent candidate to chair this commission. During her tenure on the CFTC, Born lobbied Congress and the President to give the CFTC oversight of off-exchange markets for derivatives in addition to its role with respect to exchange-traded derivatives, but her warnings were opposed by other regulators. Because the secretive, multitrillion-dollar derivative markets were outside the regulatory range, Born believed that they posed an enormous threat to the country’s fiscal stability. Among those who were disdainful of her point of view were four powerful men with strong Wall Street connections: Robert Rubin, Alan Greenspan, Timothy Geithner, and Larry Summers. As the documentary shows clearly, they believed that she was over-reacting, in the sexist spirit of dismissing “just another hysterical woman.” Greenspan believed that the markets would take care of themselves. Had they respected her brainpower and had Congress taken her advice, the country might have voided the crash that helped trigger the 2008 financial collapse.

Why did big banks get to play by different rules from smaller banks?

Sheila Bair was the outgoing chairwoman of the Federal Deposit Insurance Corporation (FDIC) when she agreed to be interviewed regarding her experiences and perspective about the fights to solve the financial crises our country has faced. She was another key player in the Dodd-Frank reform law, especially the part that sought to forestall future bailouts. She believed that the ratings of the big banks were too high but she was equally concerned about the smaller banks and the unfairness of their treatment. She would have been fine with not helping Bear Stearns; her attitude is that everyone needs to play by the same rules.

For the first year on the job, given her position with the FDIC it was surprising that Bair didn’t have a single meeting with the Secretary of the Treasury, Henry Paulsen, with whom she later locked horns about the bailout decisions.  With a BA degree in philosophy and a law degree from the University of Kansas, she wondered if her lack of access to Paulsen was because she wasn’t an Ivy Leaguer, or if it was her gender, but regardless of why (and likely both), the men in power didn’t appreciate her point of view about how to proceed.  Her professional background was strong; for example, prior to her appointment at the FDIC, Bair was the Dean’s Professor of Financial Regulatory Policy for the Isenberg School of Management at the University of Massachusetts Amherst and then worked briefly at the Treasury Department. With this background, she was confident about her knowledge and abilities, and was willing to disagree with the other regulators in public, but, as a New York Times article described, her participation in debates weren’t necessarily appreciated. “The rap on her was always that she was ‘difficult’ and ‘not a team player.’

From her point of view, Bair feared that the generosity towards banks “too big to fail” demonstrated that the government put the interests of bondholders over those of taxpayers. Just as Brooksley Born wanted to regulate derivates to avoid a financial implosion, and was outvoted by Alan Greenspan and Robert Rubin, Bair wasn’t successful except in using her brainpower in arguing with the establishment, attempting to challenge male authority during critical discussions that would forever impact the lives of ordinary people who invested in the US economy. To hear her measured speaking style and down-to-earth explanations with regard to the regulators’ responsibilities, you can listen to an interview at the Council of Foreign Relations conference or her speech at the ICBA convention.

Why must the Senate Republicans block consumer protection?

Best known of the three women is Elizabeth Warren, an attorney and Harvard law professor who has taught contract law, bankruptcy, and commercial law. In the wake of the 2008-2011 financial crisis, she became the chair of the Congressional Oversight Panel created to oversee the U.S. banking bailout or TARP (formally known as the Troubled Assets Relief Program.  She had long advocated for the creation of a new Consumer Financial Protection Bureau, which was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (CFPB) and signed into law by President Barack Obama on July 21, 2010. The bureau was created to protect consumers against deceptive financial products. As the special advisor she worked on implementation of the CFPB, building the agency and hiring excellent staff. On May 24, 2010, Time magazine called Warren, Federal Deposit Insurance Corporation Chairman Sheila Bair, and Securities and Exchange Commission Chairman Mary Schapiro the New Sheriffs of Wall Street” in a cover story. What transpired was reminiscent of High Noon particularly because the townspeople basically abandon the Sheriff – in this case, Warren- at the end.

Warren was well prepared for a continuing leadership role and smooth transition but Senate Republicans had vowed to block Warren from ever being able to run the agency she brought to life; a New York Times article about the Republican opposition to her appointment described the Congressional hearings as a “torture chamber” and that “Warren has become a piñata.” Worn down by the Congressional opposition to her appointment, President Obama instead nominated Richard Cordray. As a result of this situation, Warren’s brainpower would not be further applied to the process of enforcing consumer protection long term. As for the public, we lost a committed advocate who could have sustained the CFPB’s initial momentum. On the bright side, Warren indicated that she is seriously exploring a run for the Massachusetts Senate to take back Senator Ted Kennedy’s seat, thus continuing a commitment to public service.

According to the United States Central Intelligence Agency, women make up 50.85% of the US population but nevertheless, women are not yet a critical mass as a force for change, which we see clearly from the female/male ratio in these three agencies. Without “a critical mass,” women will have a tough time being heard, particularly when they challenge the white male conservative establishment, much less the Wall Street establishment. Born, Warren, and Bair were three competent, capable, and brilliant women who were dismissed and disrespected, and their point of view trivialized.  What happened to them highlights the fact that women’s advancements into top executive and leadership positions have been disappointingly slow. Born, Warren, and Bair each cast a big shadow but nobody in power was willing or able to protect them from their detractors.

Born’s, Blair’s and Warren’s inability to shape the outcome of policies around derivatives, consumer protection, deregulation of the financial sector, and the bank bailouts affects each American, of course, but more so in ways that are idiosyncratic to women. The economic implosion and subsequent bank bailouts have increased women’s financial vulnerability because women as a group have acquired less wealth than men, and therefore, they are more vulnerable in economic downturns. For instance, women counted on their real estate investments as a retirement strategy. And women have been disproportionately affected by predatory lending.  Consider the impact of the economic implosion on women:

  • Women’s job loss as a result of the poor economy is consistent among women who are married and unmarried, with children or without, and across the economic and educational strata, according to a DOL report reported in the NY Times.
  • Women are more likely to live longer and to live in poverty, — especially women of color – and are the main beneficiaries of health care programs, which will likely be reduced because of the cost of the bailout and the poor economy.
  • Women borrowers are overrepresented in the sub-prime lending market, and elderly women have been prime targets of refinance and home improvement subprime lenders.

Women patronize the banks in their communities, which tend to fund small businesses, home mortgages, and college loans. Women are “the little guy” that Born, Warren, and Bair wanted to protect.  They deserve thanks for their efforts to do the right thing for consumers, and our hope that they — and other women as capable as they are – will continue to harness their brainpower in order to stabilize the economy and solve the world’s complex financial problems.

[1] National Women’s History Project: What is Women’s Equality Day?

Author: Lois Phillips, PhD, is an educational consultant and co-author of “Women Seen and Heard: Lessons Learned from Successful Speakers,” Luz Publications, 2006. An in-depth interview about women’s leadership by Relly Nadler and Cathy Greenberg, PhD at Visit her blog at to read analyses of presentations by women in leadership roles or women’s coverage by the media.

Women’s Brainpower vs. Men’s Power is copyright protected @loisphillipsphd 2011. Please do not distribute or duplicate without the author’s permission unless for educational use. Thank you.

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