While debate rages outside the Beltway over Sheryl Sandberg’s advice for fixing a male-dominated world, here in Washington, a handful of powerful women have been “leaning” way ahead of her in taking on what may be the most chauvinistic industry in America: Wall Street. (And, in a few cases, they've done it while raising families at the same time.)
They may not be getting quite as much air time — or publicity — as Facebook’s Sandberg, whose book, Lean In: Women, Work and the Will to Lead, is now topping Amazon's best-seller list. But they may have a few things to teach her. It’s a striking theme in finance that goes back to well before the crisis of 2008: Very often the gutsiest and most prescient adversaries of Wall Street have been women, many of them tough regulators who looked over their shoulders and found scant few male supporters when it came to confronting the (typically all male) titans of finance and economics. Among them: new Sen. Elizabeth Warren, D-Mass.; former Obama economic adviser Christina Romer; retired bank regulator Sheila Bair; and Brooksley Born, who as a far-sighted derivatives overseer in the late ’90s took on the powerful Robert Rubin cabal and, for her troubles, was railroaded out of government.
A new member of this distinctive club is now expected: Mary Jo White, who will shortly be confirmed as the new head of the Securities and Exchange Commission. Despite questions about White’s potential conflicts of interest — she has occasionally represented Wall Streeters — no one doubts her toughness and willingness to confront aggressive men: During her nine-year stint as U.S. attorney for the Southern District of New York, the 5-foot-tall White won convictions of senior al-Qaida leaders and Mafiosi such as John Gotti. She has since promised "unrelenting" enforcement of Wall Street.
Setting aside Arab terrorist groups and the mob, there may be no harsher world for women to make headway in than Wall Street. Especially compared to the nerds of Silicon Valley, no corporate culture is more macho than Wall Street’s, which is perhaps why its heaviest hitters used to be known by a part of their anatomy that women don’t share.
Consider Warren, who almost immediately upon being sworn in as a new U.S. senator picked up where she had left off as the fiery Harvard Law professor who first came up with the idea for a financial consumer-protection agency. In a February hearing, Warren quickly took the “too-big-to-fail” debate to a new level, hammering a panel of stammering regulators over their failure to prosecute bank criminality. “There are district attorneys and United States attorneys out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial in order to ‘make an example,’ as they put it,” Warren said. “I’m really concerned that ‘too big to fail’ has become ‘too big for trial.’ ”
Romer, meanwhile, appeared to be the only one with the guts to tell Larry Summers — in his second incarnation as a mistake-prone economic adviser, this time under Obama — that the administration’s first-term stimulus was too small. Working in a White House that author Ron Suskind described as a “boys’ club,” Romer wrote what one pundit, Business Insider’s Joe Weisenthal, called "the Memo that Could Have Saved the U.S. Economy." She showed — probably correctly — that something on the order of a $1.8 trillion stimulus was needed but was squelched by Summers, who she said made her feel like “like a piece of meat” when he “boxed” her out, according to Suskind’s Confidence Men: Wall Street, Washington, and the Education of a President.
And then there was Bair, who saw back in the early 2000s, when she was assistant Treasury secretary under Paul O’Neill, that the lending industry and a securitization-mad Wall Street were out of control. Bair sought to impose “best practices” on the lending industry, including rules that would require documentation of a borrower’s ability to repay; and limiting refinancing to prevent loan flipping. She failed and, after a hiatus to raise her children in Massachusetts, came roaring back as the head of the Federal Deposit Insurance Corp., becoming the principal challenger to the often excessively cautious decisions of Treasury Secretary Tim Geithner on housing and regulation. In her strikingly blunt new memoir, Bull by the Horns, Bair wrote of Geithner: “I couldn’t think of one Dodd-Frank reform that Tim strongly supported. Resolution authority, derivatives reform, the Volcker and Collins amendments — he had worked to weaken or oppose them all.”
Bair, a Republican from Kansas, had something common with another tough female regulator, Born, who happened to be a liberal Democrat (sexism apparently knows no politics). Both ran up against the same problem: accusations from the men in charge that they weren’t “team players.” In Bair’s case, Geithner’s Treasury Department was accused of leaking that story; when it came to Born, she found herself taking on the powerful team of Rubin and then-Federal Reserve Chairman Alan Greenspan, as well as most of Congress (at one point she was forced to leave the hospital while her daughter was in the operating room when she was called up to testify).
Born, the head of the Commodity Futures Trading Commission, was eventually pressured to step down. But much later on, one of the men who had pilloried her, Arthur Levitt, the chairman of the Securities and Exchange Commission during the Clinton years, became one of the few men to publicly vindicate her for warnings about the vast over-the-counter derivatives market that was about to help melt down the financial system. “All tragedies in life are always proceeded by warnings,” he told me. “We had a warning. It was Brooksley Born. We didn't listen to that."
So pay attention, Sheryl: You’ve got some serious role models here. Of course, it may be that the life lessons of some of these women could bring back uncomfortable memories for you. As my colleague Matt Cooper pointed out yesterday, Sandberg herself did precious little “leaning in” in the late ’90s while serving as chief of staff to then-Treasury Secretary Summers, when he helped hand Wall Street license to wreak disaster on the American economy.