Thursday, October 22, 2009

Brooksley Born is a Goddess and an American Hero

I never understood how Wall Street worked and, frankly, I still don’t. For years I watched my stocks go up, down, and then back up. Then, about a year ago, I watched them take a tumble that put fear in my heart. Six months before, I had placed a call to my broker telling him I wanted to cash in some stock and pay off my home because I thought the good times were soon coming to an end. He assured me he was on top of it and would not let that happen. He told me that paying taxes on what I would need to pay it off would be a foolish move. I took him at his word. I did not follow my intuition and now, I am kicking myself. I felt it coming. I saw it coming. I was in the real estate market and I watched as the price of homes skyrocketed. People were buying homes only to sell them a year or two later for almost twice what they originally paid for them. These inflated prices could not go on forever, for after all, what goes up must come down, right? I had never heard of Brooksley Born until last night. Now, after watching “The Warning” on PBS’s FRONTLINE, I think she is a Goddess. Where was Brooksley Born when I needed her? Well, I’m here to tell you!

Brooksie, as she is affectionately called, graduated high school at age sixteen then, received her Bachelor’s in English from Stanford University in 1961, where she had hopes of becoming a doctor. After being told by her guidance counselor, “Any woman interested in becoming a doctor, instead of the more suitable career of a nurse, was merely materialistic and had no sincere interest in healing,” she chose to attend Stanford Law School instead. With only six other women in her class, Brooksie was named president of the Stanford Law Review, being the first woman to hold the editorship of a major law review in the United States. According to FRONTLINE, she received a phone call from the dean letting her know that if the job became too much for her to handle, the university staff was there to catch her when she failed. She didn’t.

Born had a long and distinguished legal career where she focused on international markets and derivatives, a word I had to Google. I suggest you do it, too. She became friends with the Clintons along the way and was interviewed as a possible candidate for Attorney General, but lost out to Janet Reno. As a consolation prize, she was appointed to the Commodity Futures Trading Commission, an independent agency of the United States Government whose mission it is to protect the public from fraud and abusive practices and foster competitive and sound futures and option markets.

Upon becoming chair of the CFTC, Born sought to regulate the derivatives market after her team completed a financial analysis leading them to anticipate the worst crisis since the Great Depression, that would not only affect the American people, but the entire world. We are living this crisis. Why? Because Brooksley Born was not only hushed up, she was shut out by the “Good Ole Boy’s” network headed up by Federal Reserve chairperson, Alan Greenspan and Treasury Secretaries Robert Rubin and Lawrence Summers. All, including SEC Chairman Arthur Levitt, were members of a private assembly known as the President’s Working Group, a group of men Brooksie Born had to meet with on a regular basis. With Greenspan leading the opposition, Born’s recommendations were suppressed and she was forced to resign.

Until recently, Born refused to comment about the fraudulent and unregulated practices leading up to the financial crisis. She, now, talks about how she would wake up in cold sweats at night and says, “The market grew so enormously, with so little oversight and regulation, that it made the financial crisis much deeper and more pervasive than it otherwise would have been.”

Did we learn from our mistake? I fear we did not. Larry Summers, of the “Good Ole Boy” fame, is now one of Obama’s top economic advisers. Summers pocketed over $5 million last year from one of the biggest hedge funds in the world along with another cool $2.7 million for speeches delivered to Wall Street firms who have received government bailout money. Robert Rubin and Timothy Geithner, now United States Secretary of the Treasury who formerly worked under Summers and Rubin, are still very much in the mix. The extent in which lobbyists influence Congress in this country is truly frightening and the Wall Street lobbyists are the scariest of all.

I wish I had followed my instincts and cashed in my stock, but it is too late for regrets. After watching FRONTLINE last night, I do not understand why more of these Wall Street Wizards are not in jail. I personally feel Alan Greenspan, Robert Rubin and Larry Summers should be taken out back and dare I say, executed? Arthur Levitt is the only one that has spoken out in favor of Born. Brooksley Born has finally been vindicated with the advent of FRONTLINE’s “The Warning.” If you haven’t watched it yet, get thee to PBS online immediately!