Jul 21 2010

Does White House Economic Team Have a Woman Problem?

It is fairly evident by now that the White House and the Treasury have been pushed into a corner and will have to nominate, or possibly appoint, Elizabeth Warren, currently the chair of the Congressional Oversight Panel created to investigate the U.S. banking bailout (TARP), to be the head of the newly created Consumer Financial Protection Bureau. While she is eminently qualified and was the inspiration for the creation of the new agency, what is their objection? The Treasury Department and the President’s Council of Economic Advisors is a an “Old Boys’ Club” headed by an out right sexist, misogynist, Larry Summers and a closet one, Timothy Geithner. While Geithner has not out right said he opposes Warren, his statement that she was qualified was not a “bell ringer”.

As pointed out by Amy Siskind at the Post this is not Geithner’s “first clash with women in power”

One of his first acts in the role of Treasury Secretary was to attempt to push out FDIC Chairwoman Shelia Bair. As Rep. Barney Frank observed: “I think part of the problem now, to be honest, is Sheila Bair has annoyed the ‘old boys’ club…we have several regulators up in the tree house with a ‘no girls allowed’ sign…”

Geithner’s inability to respectfully interact with women in positions of power was further in evidence when he was questioned in April by the Congressional Oversight Panel. Warren rightfully asked Geithner about AIG’s funneling billions of taxpayers’ dollars to Goldman Sachs: Do you know where the money went? Geithner could barely conceal his disdain: watch his angry, condescending response here.


Of course, Warren was correct. Taxpayers did not need to pay Goldman Sachs one hundred cents on the dollar, resulting in Goldman booking a $6 billion dollar gain. Geithner should well know. Also in 2009 under his watch, our government strong-armed creditors of Chrysler into taking massive discounts to their original investments.

Larry Summers, Robert Rubin and Alan Greenspan Commodity Futures Trading Commission managed to silence Brooksley Born, the head of the Commodity Futures Trading Commission, after she warned them of the dangers of not regulating derivatives trading. If they had paid attention to her in 1998, we would have averted the current financial crisis.

History repeated itself in 2002 when Iris Mack blew the whistle on Harvard endowment’s derivatives to Larry Summers’ office, she was fired

It isn’t all roses either for the lone woman on the President’s Council of Economic Advisors, Christina D. Romer. There have been some testy clashes that hint of under lying tension.

Warren, Born, And Mack are brilliant women in their fields. Why aren’t they more prominent in the Treasury Department. More to the point, since they were all more correct about the financial crisis, why aren’t they in charge?

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