Phil Angelides is a man who should know. He served as Chairman of the 10-member bipartisan Financial Crisis Inquiry Commission appointed by the United States Government to investigate the causes of the 2007-2010 financial crisis which was to become known as the Angelides Commission. In a recent opinion piece in consequence of the fifth anniversary of the Financial Crisis he commented on the President Obama's pending nomination of a new Chair of the Federal Reserve:
Our nation needs someone at the helm of the Fed who will be resolute in the oversight of the big banks in face of their no holds barred, rear guard action to scuttle reform. Someone who will fight for an economy that puts people back to work and rebuilds the middle class. Someone who was not part of the deregulation movement that stripped away or blocked key safeguards that could have averted catastrophe. Someone with a fresh perspective, not some one from the Wall Street-Washington axis.
His personal favorite is Janet Yellen. Fine and well, but if this government finally, finally, really wants to send a signal to Main Street, the Middle Class, that it is on their side and no longer in the embrace of the tentacles of Wall Street, there is one person who was there in the trenches, won her spurs in spirited confrontation with Wall Street's power brokers and can wear their enmity as a badge of honor. That person is the retired Chairman of the Federal Deposit Insurance Corporation Sheila Bair. This is a woman who, during her tenure, fought tooth and nail against the clubhouse cabal that had taken over the fiscal soul of the nation.
To date very little has changed from the crisis five years past when the Treasury/the Federal Reserve and virtually all government agencies responsible for financial oversight were in some manner beholden to Wall Street houses and banks. When the crunch came in 2008 it was their "club" members who were bailed while the rest of the country sank into a miasma of recession and unemployment. Pointedly, Sheila Bair was quoted at the time by the New York Times, "You know, Wall Street barely missed a beat with their bonuses. Isn't that ridiculous?"
Early in her tenure as FDIC Chairman, Bair began sounding the alarm about the dangers posed by the explosive growth of subprime mortgages, which brought her into direct confrontation with ex Goldman Sachs Chairman and CEO, and then Treasury Secretary Henry Paulson and New York Federal Reserve President Timothy Geithner. Bravely, she was a lonely voice subscribing to a market principle that that shareholders and debt holders should take losses ahead of depositors and taxpayers. Geithner, at the time in full Wall Street armor, wanted Bair's F.D.I.C. to guarantee all debt issued by bank-holding companies (the likes of JPMorgan, Goldman Sachs, Morgan Stanley). Bair stood her ground, blocking Geithner's coddling of his Wall Street clubbies with an intractable no! She was clear in voicing her displeasure that the government, by acting as if it was no one's fault, was thereby placing no responsibility where it should have been placed. She was also a stalwart fighter for mortgage modifications that would help homeowners and as the New York Times was to point out, "What particularly galls her is that the Treasury under both Paulson and Geithner has been willing to take all sorts of criticism to help the banks but it had been utterly unwilling to take any political heat to help homeowners."
Bair's template of character and defiance was honed by experience:
We always saw ourselves as the champion of the little guy. The other regulators never saw a bank closure. We were the ones that saw people losing their jobs when we shut down a little bank. They never understood the unfairness of how little banks were treated versus the big banks... I've always thought it was important to have everyone play by the same rules.
Sheila Bair, the Kansas transplant to Washington, is a woman of extraordinary competence, having received the following accolade from the Wall Street Journal upon her retirement from the FDIC: "Sheila Bair, who is stepping down as chairman of the Federal Deposit Insurance Corp. this week, leaves behind an agency transformed from a sleepy bank overseer into a financial regulatory powerhouse focused on preventing another financial crisis."
Mr. President, tear down this WALL Street sinecure! Give us a Chairman of the Federal Reserve for all Americans. Appoint Sheila Bair!