Could they do any worse? Most of us are rather clueless about what really happened to bring about the crash of 2008, but one thing is clear, while we are all in this mess together, we didn’t all put us in this jeopardy. Greed is the real problem. Yes, individual Americans have a part in creating this calamity. They borrowed more money than they should have. Credit was so easy to get and banks were so happy to push it. But, the real story is more disheartening than just the lack of individual responsibility.
This current economic roller coaster started with the deregulation of the banks in 1999 under President Clinton. This did two things. It unleashed the easy credit frenzy and banks could once again offer stocks for sale. In 1999 the Financial Services Modernization Act was passed which deregulated the old Glass-Steagall Act of 1933. That law was passed after the crash of 1929 to protect the public from banks. With deregulation, banks were freed to unleash their greediness once again (hmm…. what we don’t learn from our past we are doomed to repeat). Deregulating the banks was like putting the wolf in charge of the chicken coop and expecting them to behave themselves.
The other greed factor and a “hidden cause of the current global financial crisis is that the people who saw it coming had more to gain from it by taking short positions (or by buying credit default insurance- in other words betting against America) than they did by trying to publicize the problem.” (Michael Lewis: Boomerang, 2011)
Here’s my question: If more women were in decision-making roles in Congress, banking institutions and large corporations, would this folly have happened? One Icelandic woman, Halla Tomasdottir, noticed the financial crisis that was building in her country and quit her high-level position as the CEO for Kaupthing Bank in 2006. She didn’t like the way things were going. She started her own financial services business totally run by women. Her company is one of the few profitable financial businesses left in Iceland today. And, Bloomberg reported that while women make up only 3 % of hedge fund managers, their portfolios profited 55% more than men’s from 2000-2009. (Can Feminine Values Fix Finance? http://www.cnbc.com/id/44860469)