And so began Monday’s event “The Women Sheriffs of Wall Street” at Harvard’s Memorial Church. Hosted by Pulitzer Prize-winning journalist Ron Suskind, current Director of the Project on Public Narrative at Harvard, the discussion included former FDIC Chairwoman Sheila Bair, former SEC Chairwoman Mary Schapiro and United States Senator Elizabeth Warren.
Suskind started the session with a brief history lesson in American economics, starting in the 1970s, whose hardships he described as a bruise to the country’s ego. Shortly thereafter, Ronald Reagan declared that it was morning in America and ushered in an era of deregulation in an attempt to create confidence in the American economy, whether it was earned, manufactured or willed into the public consciousness. Suskind argued that 2007 was the pinnacle of this trajectory and saw the coming together of two disparate trends: (1) the male-dominated finance industry, which was driving the economy and culture and (2) female regulators, namely, the ones with whom he was sharing a stage, gaining power.
It’s been five years since TIME Magazine baptized these three women as the “New Sheriffs of Wall Street.” Since then, Warren has risen from Harvard Law professor and chief architect of the Consumer Financial Protection Bureau to the United States Senate and brought financial reform and consumer protection to the national spotlight.
Sheila Bair, who served as Chairwoman of the FDIC from 2006-2011, was a bank teller early in life because her Philosophy degree couldn't get her any another job. Bair said that growing up in rural southeast Kansas kept her grounded in everyday people’s struggles, and she credits her philosophy background with forming her ethics, solidifying her dedication to fight for people, not banks. A self-described Populist Republican, Bair was a political appointee under several administrations and ran an unsuccessful Congressional bid in her native Kansas in 1990.
Mary Schapiro, who served as the 29th Chairperson of the U.S. Securities and Exchange Commission, said she “always believed that government was a force for good,” and worked for the federal government right out of law school. Schapiro cited her time playing sports as what gave her a leg up in a male-dominated industry and believes that the expansion of women's sports under Title IX will do a lot of good for young women entering professional life. She said sports teach respect, as well as how to take hits, work as a team and play by the rules - something she said we don’t see enough of on Wall Street.
Elizabeth Warren, who needs little introduction these days, explained that when she first began to study bankruptcy policy, it was during an age of massive misunderstanding over what filing bankruptcy meant. The general public believed that "welfare queens" were gaming the system, but when Warren looked at the data, she instead found that 90% of bankruptcy petitions were due to a major medical issue, longterm unemployment, death or divorce. It turned out that many people filing bankruptcy were college-educated and living in households where both parents worked. In All Your Worth: The Ultimate Lifetime Money Plan, a book that Warren wrote with her daughter Amelia Warren Tyagi in 2006, these statistics were confirmed. Warren found that a household with two working parents in the 2000s had less disposable income than households with one working parent in the 1970s.
Warren recounted a particularly painful memory of hers, of the day her mother walked to Sears to apply for a minimum wage job. Though the story was sad, Warren credits this job with saving both her house and her family. She emphasized that minimum wage jobs simply don’t do that anymore, saying “We cannot have a country where you work full-time and are in poverty. If some billionaire wants to fight me on it, I’m ready."
Bair chimed in, arguing that several lessons could have been learned from the great Recession, both good and bad. The wrong lesson to glean from the financial crisis is that bailouts are acceptable. The other, more important lesson is that short-sighted, greedy behavior wreaked a lot of havoc on our economy and in our communities and that we need to change going forward.
Suskind asked the panelists if they believed there is a way for the financial services industry to be less focused on these high-risk rewards and winner-take-all setups, and he cited research by Harvard Business School Professor Robin Ely on oil rigs and culture change as an example. Schapiro responded hopefully, citing transparency as a major tool. “It’s amazing what people will stop doing if they have to tell the world they’re doing it.”
As could be expected, the discussion wasn’t complete without a question about Democratic Presidential hopeful Hillary Clinton. A member of the audience asked Warren what kind of financial sheriff she thought Clinton would be. In response, Warren emphasized that the 2016 race is an opportunity to move forward on these issues. She argued that it’s common sense to be a financial sheriff in today’s political world, as most Americans think that the financial services industry is not working for them and want more regulation on Wall Street. For possibly the first time, there is broad national consensus for making the financial services industry safer and more accountable. According to Warren, it is this opportunity that any Presidential hopeful should seize.