Yes, we all know hindsight is 20/20 and much ink has been spilled in detailing the factors that led up to the global financial crisis and U.S. bank bailouts of 2008. In Canada, we had the good fortune to be spared much of the drama; our financial industry is more stringently regulated and Canada's banks are known as some of the safest in the world.
Looking back at the U.S. situation, however, it's impossible not to wonder: how could this have happened? With so many intelligent, highly paid professionals in the industry, didn't somebody sound a bell to warn about the impending collapse? Didn't anyone see this coming?
One economist, Nouriel Roubini, did see the financial meltdown looming. The reward for his prescience was to be dubbed "Dr. Doom." Post-crisis however, he has since become something of a rock star among economists.
Though he gets a lot of press, Mr. Roubini was not the only voice of alarm. Like canaries in a coalmine, these four women warned that the U.S. financial markets were about to hit a wall, yet their warnings went unheeded.
1) Brooksley Born
Former chairperson of the Commodity Futures Trading Commission (CFTC) from 1996-1999, Ms. Born oversaw all American futures and commodity options markets. During her tenure, she lobbied the Clinton administration for regulation of 'swaps' and 'over the counter' (OTC) derivatives (the type that are traded privately between financial institutions). She was opposed on the grounds that such oversight would stifle innovation. Unregulated, these OTC products flourished for years and led to the series of events that would bankrupt Lehman Brothers in 2008, followed by the collapse of several more venerable financial institutions.
2) Sheila Bair
Chairperson of the Federal Deposit Insurance Corporation (FDIC), Ms. Bair was reported as one of the first government officials to recognize that subprime mortgage loans were creating a market of quicksand. She warned the Bush administration and the mortgage industry to address the problem before it threatened the entire economy. They didn't listen. Throughout the ensuing collapse, she stood staunchly on the side of Americans facing foreclosures and was a vocal critic of the bank bailouts. In 2008 and 2009, Ms. Bair was ranked as the second most powerful woman in the world by Forbes magazine. Now, as her five-year term comes to an end, Ms. Bair was reported as saying that policymakers must convince markets that no institution is 'too big to fail' and that government will never again bail out major financial institutions as it did in 2008.
3) Marcy Kaptur
Serving her 14th term as Congresswoman from Ohio, Ms. Kaptur is the longest-serving woman in the U.S. House of Representatives. A feisty advocate of taxpayers and government transparency, Ms. Kaptur fought against the US bank bailouts on the premise that they were unfair and would create trillions in debt for future generations. Featured in Michael Moore's movie, Capitalism: A Love Story, Ms. Kaptur has blamed Wall Street executives for perpetrating "the greatest financial crimes ever on this American republic."
4) Elizabeth Warren
Recently appointed as head of America's Consumer Financial Protection Agency, Ms. Warren served on the Congressional panel that managed the implementation of the Emergency Economic Stabilization Act, including the U.S. bank bailouts. An expert on bankruptcies, as well as women's and families' personal finance, she was responsible for making sure the bailout money was used responsibly, making the process transparent to the public and keeping both sides — bank and government — in line. "I can't think of anyone I'm afraid of," Ms. Warren told Time Magazine. "Certainly not someone who may have had a hand in bringing this country to the brink of disaster."
It takes some kind of guts to stand up to governments, bank chairmen and presidents and declare that the emperor is not wearing any clothes. In the chaos of a global financial meltdown, it becomes even more daunting to take leadership and be the voice of reason. Yet all four of these women have proven their courage and power.
It should come as no surprise then, that Ms. Born and Ms. Bair were awarded the John F. Kennedy Profiles in Courage Award in 2009. Caroline Kennedy (daughter of JFK), handed out the awards, hailing Ms. Born and Ms. Bair as heroines.
Ms. Bair was lauded for the "political courage she demonstrated in sounding early warnings about conditions that contributed to the current global financial crisis", while Ms. Born "recognized that the financial security of all Americans was being put at risk by the greed, negligence and opposition of powerful and well-connected interests."
"The catastrophic financial events of recent months have proved them right," said Ms. Kennedy at the time.
As any wife, girlfriend, mother, sister or friend will know, sometimes there is little joy in being right. But one thing is certain; these are women we will certainly be listening to from now on.
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