The Boys Club And The Sisterhood

Though most of the men won’t say it, they feel that the nexus of math and risk—and the gaming of both, without flinching—is an area of male inclination. In fact, many of the women agree. They say that’s part of the problem.

Suskind, Ron (2011-09-20). Confidence Men: Wall Street, Washington, and the Education of a President (p. 205). Harper. Kindle Edition.

The view from Chapter 9.

The battles Brooksley Born had fought and mostly lost in the Clinton administration were refought under Obama, just with higher stakes. This time the sisterhood was larger, including Washington Senator Maria Cantwell, an early critic of Paulson and Geithner, FDIC Chair Sheila Bair, SEC Chair Mary Shapiro, and Elizabeth Warren, head of TARP oversight. They were still drastically outnumbered by the old boys network led by Geithner and Wall Street, but they had one crucial advantage - they had been mostly been right where Summers, Greenspan, and the other efficient markets devotees had been wrong. Bair, a Bush administration appointee, had famously pushed to regulate Enron's financial doings but had been over-ruled by her more fanatical free market colleagues, two to one.

The question of the moment was what to do about Citibank, a two hundred year old behemoth that had pioneered many financial innovations, including the checking account but had also repeatedly got itself in trouble from which it had to be bailed out by the government. It was seriously upside down again, and despite tons of federal money, $45 billion from the treasury and three hundred billion plus in free money from the FED, was on the brink of bankruptcy. Bair wanted to shut it down.

Obama also leaned that way, while Geithner stood as the defender of Citibank and its creditors - he was on the phone to CEO Vikram Pandit almost every night. The big sticking point was the cost of bankruptcy and who would bear it. Bair wanted the creditors to take a big haircut, but Geitner fought fiercely to protect them.

I repeat that Süßkind is a great story teller. He may not be the best unraveller of the financial intricacies, but he is fabulous on illuminating the human side. If finance and financial shenanigans are your thing, or you just like history and politics, I can stongly recommend Confidence Men.


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