Knowing Your Value (15 page)

“I’ve been in a room countless times where I had said something and no one said anything, no one paid attention. Then a man has said the exact same thing, and people have listened,” Valerie Jarrett tells me. “It hasn’t happened to me in this White House, but it’s happened to me countless times in the past. I think that every woman has experienced that. I don’t know whether it’s the way we speak it, or if it’s because
we’re women and people have discounted what we said. I can think of many, many times when I’ve said something and it’s been overlooked.”

Study after study has documented this phenomenon. And woman after woman told me she had experienced some version of it. But for women to achieve their value, they have to find a way to be heard. Nowhere has that been more difficult and more public than on Wall Street, where a few women have dared to go up against an army of powerful men.

FDIC chair Sheila Bair was one of the first people to raise concerns about problems with the subprime mortgage market. She famously battled the “men in charge” of the various regulatory agencies. She tells me it was often difficult to get her counterparts to listen. It was probably for a variety of reasons, including the FDIC’s traditionally conservative philosophy and posture. “I become frustrated when people won’t even engage,” she says. “If you’re not going to agree with me, tell me why you don’t agree with me and let me respond to that. Don’t just nod and smile and go off and don’t do anything. So that’s really frustrating, and I think that’s the first hurdle: at least getting people to engage—even if they’re going to disagree with you or not accept your views, at least get them
to listen and have a give and take. You have to keep coming back at them and demand a response to your views.”

When I press Bair for an instance she would be willing to share in which she felt her ideas were ignored, she refers me to a series of public incidents in 2007. At the time, the mortgage market was starting to go south, and Bair was pushing for a federal program that would encourage banks to modify loans for millions of homeowners. The idea was to lower payments and extend the length of the mortgages so families could remain in their homes, keep the mortgages performing, and head off an epidemic of foreclosures.

Bair was initially unable to convince Treasury Secretary Hank Paulson or the Bush White House to support the program. But then Governor Arnold Schwarzenegger decided to launch a loan modification project in California modeled on her plan. When Schwarzenegger adopted the project, he gave the idea additional credibility, and Hank Paulson saw its merits. “He came around . . . and it provided some momentum for the administration to say, ‘Okay, if Arnold is doing it, it must be a good idea.’ So then we did it on a federal level.”

Like Brooksley Born and Sheila Bair, Elizabeth Warren talks about the “profound insularity on Wall Street.” She says, “The guys who ran it were guys who talked only to each other and valued only each other. That was their downfall. They didn’t want to hear the evidence that said, ‘Your game doesn’t work. Your plan is broken’ ... and so it was, you know, ‘
Lalalala
, we can’t hear you.’ ”

Warren’s work has an effect on Wall Street and corporate America. She told me that she works in “a field in which male voices dominate almost exclusively.”

Warren says she was not just in the minority because she’s a woman but also because she has taken the “girls’ side” of finance: “I want to talk about the consumer impact of much of what Wall Street does, and in many circles that makes it doubly unpopular. You know, I’ve picked the girls’ end of the discussion . . . because the cool stuff, the guys’ stuff, is to talk about leveraged buyouts and credit-default swaps.

“I’ve been in groups of academics and we’re talking about financial innovation, and everyone in the room wanted to talk about [mortgage-backed securities and collateralized debt obligations], and when I would raise my hand to say, ‘The first problem with financial innovation has been the families . . . the thirty-page credit card agreements and mortgages . . . there’s just a long dead silence, and finally someone says, ‘Well, yes, but we only talk about the things that have a really important impact.’

“I know what all that means and I can talk about it. We can sit here and have back-and-forth on theoretical ideas and what the data show, but the part that has been missing from
the conversation is the impact on families . . . that the raw materials for much of the financial bubble and crash were people’s home mortgages and credit card agreements. We know that now, but no one wanted to talk about this three years ago.”

Despite resistance, Warren continued to voice her concerns. And she suffered a backlash, in a very public way.

She remembers the litany: “ ‘Doesn’t have the right background, doesn’t play the political game, doesn’t understand how things are done’ . . . for which there’s a little voice in me that always said, ‘Oh, no, I understand; I just think it’s wrong.’ . . . The whole game is ‘doesn’t understand’ rather than ‘we just disagree.’ You know, people need to show respect to disagree with you: if I respect you, I will disagree with you. If I don’t respect you, I’ll just say you don’t understand.”

Perhaps the best example of this backlash came a decade before the economy faltered, when another female regulator,
Brooksley Born, went up against Wall Street. Born was the chair of the Commodity Futures Trading Commission (CFTC). In the late 1990s, she warned of the risk from the credit default swaps and other financial time bombs that would eventually cause the economic collapse. But nobody listened.