The astonishing Brooksley Born
On February 9, I blogged about Brooksley Born, whose bold warnings about the danger of secret, unregulated, “black box” (over-the-counter) derivatives drew the ire of the Alan Greenspan / Larry Summers / Bob Rubin gang.
Brooksley Born, playing the role of Cassandra, predicted our recent financial crisis and massive taxpayer bailout. For her perspicacity and concern, she was crushed politically by the banking industry.
This relatively unknown woman — a true American hero — has just received the deeply deserved Frontline treatment. I encourage you to watch the latest Frontline. Before watching, I did not know Born was the first female president of the Stanford Law Review or that Bill Clinton considered her for Attorney General before appointing her to head the Commodity Futures Trading Commission (CFTC).
After watching, I discovered more amazing facts about this wonderful woman and the obstacles she went around and over:
Born entered Stanford with the thought of being a doctor, but switched majors after a career counselor interpreted her answers on a series of vocational tests. In those days, women were assessed for their interest in nursing or teaching, men for the professional jobs, including law and medicine. The tests were even color coded — pink for women, blue for men.
Born says she insisted on taking both. Her mother, who had a master’s degree in psychology, felt that was the only way her daughter’s professional interests could be evaluated properly.
She scored high on being a doctor — and low on being a nurse. But rather than suggest she pursue a career as a physician, the counselor said the test proved that her interest in medicine was not genuine and that she was really only interested in making a lot of money. Born quit premed and majored in English.
This Stanford Magazine article also covers Born’s first meeting with the libertarian, laissez-faire Greenspan, in 1996:
“Well, Brooksley, I guess you and I will never agree about fraud,” Born, in a recent interview, remembers Greenspan saying.
“What is there not to agree on?” Born says she replied.
“Well, you probably will always believe there should be laws against fraud, and I don’t think there is any need for a law against fraud,” she recalls. Greenspan, Born says, believed the market would take care of itself.
For the incoming regulator, the meeting was a wake-up call. “That underscored to me how absolutist Alan was in his opposition to any regulation,” she said in the interview.
Posted by James on Thursday, October 22, 2009