Sexism and the Financial Crisis

Larry Summers and Tim Geithner seem to have a problem with highly qualified women who disagree with them.

We take time out from the Green Revolution to wonder whether sexism isn’t playing a large role in the Obama Administration’s response to the financial crisis.

Over at the Big Picture, Chris Whalen does a punishing takedown of the Sunday NYT story on infighting between the bureaucracies. Essentially, according to Whalen, Geithner and Currency Comptroller John Dugan are doing the big banks’ bidding, and then using their media contacts to trash FDIC chair Sheila Bair, who seems to want to follow the law and ensure that we don’t have zombie banks ruining the economy for years.

Dugan is a complete tool of the large zombie banks, IMHO, a career “public servant” who is entirely captive of the industry he pretends to regulate. Thus his forceful protestations about Bair’s tough line with Citigroup and other insolvent money center banks. Along with Secretary Tim Geithner, Dugan takes his marching orders from GS, JPM and the other major banks, thus the continued effort to try and force Bair out at FDIC. Unfortunately, the Times is so busy carrying the water for Master Tim that they neglect to provide you with the adequate coloration to full appreciate who is serving the public interest among the regulators. . . .

Of course Paulson, Bernanke et al were “fuming” at Sheila Bair. The FDIC Chairman was doing her job while the rest of these spineless weasels, these duplicitous, traitorous villains were selling out the taxpayer to subsidize the bond holders of the large banks — the clients of PIMCO, BlackRock and the rest of the Buy Side. Following Paulson’s lead, Dugan and Geithner are simply representing their clients and future employers on the Sell Side.

As they say, read the whole thing.

But this all made me notice something. If this account is right (and it is a big “if”), then Bair is third highly expert woman whom the testosterone-charged Masters of the Universe have decided to ignore, then try to undercut.

In 1999, then-CFTC chair Brooksley Born attempted to regulate Credit Default Swaps: Summers, Geithner (then Undersecretary of the Treasury for International Affairs), Greenspan and Phil Gramm then stripped her of her authority to do so and dismissed her concerns. Instead of brining her into the administration, Summers and Geithner have kept her far away. They have also sidelined TARP watchdog Elizabeth Warren, who as a Harvard Law Professor should have complete entree into the Cambridge-heavy administration. And now Bair.

Summers, of course, has been accused of sexism in the past, and I have defended him from that charge. You can be a jerk without being a sexist (although it helps.). But this doesn’t look good — and more importantly, it appears to be blocking the development of good policy.

This is an n of 3. It could be a coincidence. It’s premature to leap to conclusions.

By the way — you notice that we have had a three female Secretaries of State, and a female national security advisor, and several women on the Supreme Court — and no female Treasury Secretary? Wonder why that is? Just asking….

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.