Tag Archives: Women’s Voices for Change

What’s in this Wall Street reform bill….

that some might decide to filibuster it?

Last week’s Congressional votes have opened the door for both houses of Congress to finally take up the bill developed by the Senate Committee on Banking, Housing, and Urban Affairs. The next two weeks will be spent, the New York TimesCarl Hulse observed, with both parties competing to amend the bill.

As our own Diane Vacca observed last fall, the late-2008 crash alerted all of us to the fact that the dissolution of the post-Great Depression controls on banking had some very serious downsides. Among them, perhaps, was the discrediting of the very ratings agencies investors have traditionally depended on (such as Moody’s and Standard & Poor’s), something DeutscheBank’s Karen Weaver foreshadowed in an interview with us six months before the Big Bust. So who can we depend on to keep our money safe, short of putting it all in gold bars under the bed?

To one extent or another, all the legislators working on the Wall Street reform bill are trying to answer that question.

But what’s in the bill that was filed, and what has been voted on so far? Like the problem it’s trying to address, it’s long and complex. Below is a sampling of how the bill tries to address some of the more obvious fault lines–the systemic problems identified by the Financial Crisis Inquiry Commission–drawn from the committee’s own summaries.

Stopping the casino: “Wall Street should have a socially important purpose, and not resemble a casino, where people are more concerned with valuing an option than valuing a business,” investment guru Warren Buffett said recently. The Senate bill incorporatesthe ‘Volcker Rule,’ suggested by former Fed chairman Paul Volcker, which requires regulators to implement regulations for banks, their affiliates and holding companies, to prohibit proprietary trading, investment in and sponsorship of hedge funds and private equity funds, and to limit relationships with hedge funds and private equity funds. Nonbank financial institutions supervised by the Fed will also have restrictions on proprietary trading and hedge fund and private equity investments.

Reining in derivatives: Perhaps the knottiest of the issues the Senate is wrestling with is that of all the new financial instruments, fabricated from mathematical sleight-of-hand and other people’s money.

According to a report from the Congressional Research Service, for a while these instruments seemed like the best game in town: “Since 2000, growth in derivatives markets has been explosive (although the financial crisis has caused some retrenchment since 2008). Between 2000 and the end of 2008, the volume of derivatives contracts traded on exchanges, such as futures exchanges, and the notional value of total contracts traded in the over-the-counter (OTC) market3 grew by 475 and 522 percent respectively. By contrast, during nearly unprecedented credit and housing booms, the respective value of corporate bonds and home mortgages outstanding grew by 95 and 115 percent over the same period.” Then came the crash; a few weeks ago we posted footage of former regulator Brooksley Born exposing the damage. Arkansas senator Blanche Lincoln (right) has given the issue particular heat, and authored the derivatives section of this bill.

Of course, many sensible investors already spurned derivatives when they had the choice. Take, for example, Warren Buffet’s Berkshire Hathaway holding company: hedge fund manager Alan Schram, reporting on a shareholders meeting of the company, noted that Berkshire holds “250 derivative contracts, down from some 23,000 contracts ten years ago, with a notional value of 1 percent of that of some other large institutions.” But many of America’s pension funds and 401(k)s were not quite so farsighted.

Derivatives “have some utility but have to be conducted safely, under responsible rules,” Buffett told shareholders. So what sort of “responsible rules” does the Senate bill currently propose? For starters, it would “require issuers to disclose more information about the underlying assets and to analyze the quality of the underlying assets” of derivatives and, perhaps more importantly, “require that companies that sell products like mortgage-backed securities to retain at least five percent of the credit risk, “unless the underlying loans meet standards that reduce riskiness.” It would also change the rules and the composition of the Municipal Securities Rulemaking Board, to stop outside “investment managers” from placing bets with the taxpayer funds and pension contributions.

More systemically, it brings “an estimated 90 percent of the market for derivatives, which are essentially bets on the future price of something, onto a regulated trading exchange—similar to a stock exchange, where price and volume data are publicly available to potential investors,” Brooksley Born’s former aide Michael Greenburger told ProPublica’s Marian Wang. “It leaves certain exceptions for foreign exchange deals and commercial use (such as an airline company’s use of derivatives to hedge against prices of fuel skyrocketing).” Let’s watch as senators parry over those exceptions, and see whether what they agree on is enough.

Leverage requirements. The word “leverage” may make you think of a grizzled Timothy Hutton on a Fox TV show. But for banks and shadow bankers, it means how much in the way of assets has to stand behind your investment, whether in cash, real estate, or farm implements. “If you’re a bank, the upside of leverage is that it gives you a lot of money that you can use, well, to make more money,” writes Washington Post wonk Ezra Klein. “It’s the difference between investing $1 in the stock market and $40. The downside is that it makes your firm fragile.”

If your leverage is at 2:1 — that is to say, you’ve borrowed one dollar to add to the dollar you already had — you could lose a full dollar and still be able to pay your creditor back. If you’re at 10:1, anything beyond a 10 percent decline in your assets means that if your creditors want repayment, you can’t pay them back (as you’ve lost more than your original dollar). At 20:1, a 5 percent decline will put you underwater. At 40:1, a mere 2.5 percent decline can finish you off. The more leverage you have, the less bad luck you can survive.

Therefore, the Senate bill would create a Financial Oversight Regulatory Commission, which would “impos[e] tough new capital and leverage requirements that make it undesirable to get too big” and therefore “too big to fail.” C-SPAN addicts, here are your marching orders: keep track of how this aspect of the bill changes in upcoming weeks.

Preventing future runs on the “shadow banking” system: What happened in September 2008, when all credit froze, did not include hordes of depositors rushing to pull their money out of Chase or Bank of America branches. Those institutions are covered, and regulated, by the Federal Deposit Insurance Corporation (FDIC). What did happen was an immediate blowout in the complex, interwoven, and immensely profitable network of financial institutions operating outside federal supervision, which magnified the collapse of one sector (subprime mortgages) until it nearly broke the economy.

Chief among these, perhaps, are hedge funds and reinsurance companies (think AIG). The Dodd bill establishes an Office of National Insurance to better monitor the latter, and would require a hedge fund with significant assets to register with the SEC like any other broker. Hedge funds, according to the bill summary, would have to “provide information about their trades and portfolios necessary to assess systemic risk. This data will be shared with the systemic risk regulator and the SEC will report to Congress annually on how it uses this data to protect investors and market integrity.

As even the most casual observer of last week’s Senate hearings on Goldman Sachs might have noticed, it’s a long and complicated way back to the stability investors once expected. “It took twenty-five years of misguided economic theorizing and legislation, along with insufficient regulation, to create an outlaw financial sector,” wrote economist John Cassidy for The New Yorker. “Rehabilitating it will be a mighty, multiyear endeavor.” So, it seems from today’s news, will even trying to talk about it.

Coming soon: our report on the controversial bailout-or-no-bailout provisions, the current state of the Consumer Financial Protection Agency, and how the Senate plans to deal with those suddenly rascally ratings agencies.

(First posted at Women’s Voices for Change.)

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My open letter to Rielle Hunter

Dear Rielle,

I’m glad you went on “Oprah” this week. Ever since you burst onto the national consciousness in 2008, I’ve been wondering about you — the former Lisa Druck, now a Southern Californian named Rielle, and since last year the mother of a lovely toddler who looks just like former senator and presidential contender John Edwards.

Back then, I had a pretty good idea of who you were, and, paradoxically, none at all. Here on the WVFC website, I wrote about what your story brought to mind: “We Could All Be Elizabeth Edwards.” Like many women, I first heard the unfolding tale with that brilliant attorney and cancer survivor in mind, and felt sick. “We all could be Elizabeth: we all could see something we’ve fought for splintered in a second, because of others’ stupidity or our own. As midlife women, we curse what our bodies can no longer do or be or look like…” Or the fear that crosses the heart that someone newer and shinier can walk into your relationship and upend it.

It’s been nearly two years. For a while you were easier to ignore, what with the tawdry details spilling out of all the political press or the memoir of former Edwards aide Andrew Young, who once claimed to be your child’s father. As soon as Elizabeth finally filed for divorce, protecting her children, it was easy to decide you were none of my business.

So why turn to that hour with Oprah and your Hollywood-lovely face? Maybe because as much as I think I could have been Elizabeth, I also know I could have turned out more like you.

After all, you and I moved to California for love in 1991, though I went to San Francisco and you took up life in Beverly Hills with a new husband and a new name. I’ve also had the very experience you described to Oprah, about the day in 2006 when you met Edwards: for me it was an evening on a dance floor when “love at first sight” didn’t feel like a cliche and it seemed fine to ignore common sense. (Thank heavens, in my case the dude involved melted away after a few weeks.) “Our hearts were louder than the minds,” you said. Right. Anyway there’s a chemical name for that “wave of energy” you felt: oxytocin, the hormone that helps babies nurse and makes people newly in love forget to wash their hair.

Not that there was anything wrong with your hair today. You looked like a starlet, with the same flat smile. But the way you talked reminds me of some people I knew out West, who regarded appointments as fiction, jobs as encumbrances, and promises as suggestions. Like the guy who enticed a dear friend of mine to sell everything and move to San Jose so they could start a business together — then announced that he had a bad breakup and a twisted ankle and “wasn’t in a space to work right now.” Your jargon reminds me of the self-help pseudo-spiritual cults everywhere out there, whose members kept inviting me into “informational sessions” so I could learn about things like “the reality-tone scale.”

Some of these people were friends of mine, dance partners, lovers. Like you, they saw “seeking the truth” not as a task but a treat: “I was supporting him in his process, and his intentions never wavered. I knew that he wanted — he just had a really unique way of getting there — to live a life of truth,” you said of Edwards, with that blissed-out smile.

And this is the point where I realize: Nah, I don’t have to worry about turning into you. I’ve broken up with you. Several times.

So has Jenny Sanford, former first lady of South Carolina, who was on “The View” the day you appeared on “Oprah.” Her comment about your declaration that “I’m not a home wrecker,” was a sad laugh with a flash of anger: Commenting on you and her ex-husband’s Argentinian mistress, she said, “They weren’t 18 years old. They knew exactly what they were doing.” The other women at “The View” agreed, uniting for once before the incomprehensible.

But I don’t think what any of us say is going to make a difference. You believe that your profound spiritual connection to John Edwards is something no one else can understand. This can’t really be a letter to you, not even one of those open letters we write to politicians. Because you’ve evolved to a place where your ears cannot hear what we’re saying.

You and John Edwards — who I’m embarrassed to admit I once voted for — have been reminding me of that line from The Great Gatsby: “They were careless people, Tom and Daisy — they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made.” In your case, those ‘other people’ include Elizabeth; your baby daughter, Frances Quinn; and Cate, Jack and Emma Claire Edwards, now set to grow up a bike-ride away from you and the baby.

For a while, the clean-up crew included the rest of America. Knowing that, you went on “Oprah” to overcome the “false picture” that all those years of press reports had brought. But I think you did the opposite. “It was compelling TV, but in the end, Hunter didn’t seem any more understandable than when The National Enquirer first discovered her,” said TIME Magazine. Salon writer Rebecca Traister wrote: “While I understand love and desire to be viciously complicated things, and certainly do not believe all mistresses to be craven, self-absorbed or ill-intentioned, I believe Rielle Hunter to be all of those things.” And you know you’re in trouble when the New York Times‘ TV reporter compares your unblinking certainty to that of Iranian dictator Mahmoud Ahmadinejad. Your destructive capacity is narrower now than in 2006, but it’s still hard to watch.

Thank you, Rielle Jaya James Druck, for reminding us of who’s behind those wide eyes.

Now, I think, America can finally quit you.

Rielle Hunter, who told Oprah Winfrey in a program broadcast on Thursday that John Edwards had a secret affair with her because “he wanted to live a life of truth

the iPad: friend of the disabled as well as the Appleaddict

It’s now been nearly a week since I–and oh, about 300,000 others–became early adopters of Apple’s new tablet computer, the somewhat unfortunately named iPad. (I still wonder if any women were in the room when they decided on the name.)

You’ve probably heard more about it than you ever wanted to, even if you own one: in this one week alone, we’ve had videos of two-year-olds playing on the thing, articles like “The iPad is a gift to readers” (Salon) and “The 9 Worst Things About the iPad” (Huffington Post). So why am I writing yet another one?

More centrally: why did I, a freelance writer and editor with a super-limited budget, line up at the Apple Store on Saturday with all the hardcore Mac fanboys — who had, like me, “pre-ordered” the device?

Partly because the minute I heard about it, it felt to me not like a luxury item but a near-necessity.

Full disclosure: I’ve been a charter member of the Mac cult for just about 20 years, and am fully aware that it means I have spent more for computers than I should have. I am also one of those “laptop people,” not having used a desktop computer since about 1995. Limits on my vision , dexterity and agility–first from illness, then from age as well–have kept me keenly interested in tools that let me focus on my work and not the computer’s. And as a media professional, I’ve been keenly aware of the newer media spaces, not just “Internet-instead of newspapers,” but phones, game consoles, and social media.

When the iPhone came out, I was in the market for a new laptop and thought of buying the iPhone instead, since it’s a powerful computer in its own right. That fancy passed, but as prices came down I became a proud owner of an iPod Touch, and learned to love both its easy access to work (email, editing blog posts like this one) and its quick windows to the rest of the ‘net. (I swear, for example, that I read a lot more of the New York Times on that tiny screen than I ever did in print.)

The problem with the Touch? Remember the vision and dexterity problems I mentioned above? Even when I increase font sizes, it has felt severely limiting—especially given the admittedly beguiling multitouch interface, where you physically turn pages and place Scrabble tiles. I joke about it, have called it all occupational therapy. But when I first started hearing about the iPad, and heard it critiqued as “just a big iPod Touch,” I clapped my hands. You made me a big one?

And when I learned about the keyboard dock that could make typing on the thing a bit easier, I knew it might even be my next laptop. Sort of.

When I got in line at my local Apple Store last Saturday, I was completely convinced the line would be full of women like me, whose eyes are beginning to go and whose multitasking lives demanded a tool both pleasurable and with fewer demands on the body.

Of course, I was wrong: it seemed, at least at first glance, that only men between 25 and 40 were really itching to get their hands on the newest Apple media device. (Or else–and this was perhaps more likely–women like me were far too busy to deal with that wait-in-line thing and just ordered it for delivery.)

And yes, so far it’s a mixed blessing. Though still a quarter the weight of my MacBook, the thing is far heavier than you expect, being crammed with software and a honking huge battery. Programs whisper and quit on occasion. And that keyboard dock isn’t ready yet, limiting the amount of time I actually write on it (though I wrote about half of this post that way). But I’m already loving the reading tools (hello, Moby Dick and countless academic articles for the book I’m writing). And the rather excellent speakers mean that while I’m doing more major writing at home, I have a very good soundtrack. (It’s a book! No, it’s a newspaper! No, it’s a…..boom box?)

I’ll keep you posted on how it goes. It’s way too early to know if I’ll end up regretting my decision to buy it so soon. I’ll check in as the year proceeds, as newer and even cooler and much cheaper products come out from Apple and its rivals.

In the meantime, I’m becoming a decent Scrabble player. And maybe I can get Stephen Colbert to give me his recipe for iPad salsa.

Originally posted at Women’s Voices for Change.

Headed to Haiti, More Bridges to Build

This year began with a pair of earthquakes that has riveted and upset many. But what most upset former banker and current humanitarian philanthropist Sara Henderson was that the panic and devastation streaming across TV screens was so familiar.

“I felt like I was seeing something I’d seen five years before,” Sara Henderson told me last week.

Henderson, founder and CEO of the Building Bridges to the Future Foundation, said the early scenes from Haiti felt too much like what she had seen five years earlier immediately after the tsunami in Aceh, Indonesia. “People have forgotten that in Aceh it started with a 9.8 earthquake,” Henderson said. “By the time the tsunami hit, massive amounts of infrastructure, governmental structures, many buildings had been leveled.”

As similar stresses tore apart government buildings in Port-au-Prince, she said, the amount of confusion among the media and competing non-governmental organizations also felt sadly familiar. “It got me wondering — have we learned nothing?”

Henderson also felt the same impulse that millions of others did — to try to help. But in her case, she actually had an idea of how to do it, after creating the Building Bridges to the Future Foundation and becoming what the New York Times recently called “one of Aceh’s longest-serving aid workers.”

Now, Henderson’s headed to Haiti at the invitation of Oxfam America and other NGOs [non-governmental organizations] familiar with her work in Aceh. While those peers have offered to get her started, said Henderson, she has no idea what she’ll find. And starting in late March, she has agreed to blog from Haiti for Women’s Voices for Change. (To read my first article on Henderson and her foundation, click here.)

Henderson also has no way of knowing how much of the model she developed in Aceh will be useful in Haiti. Then again, in 2004, when she first began the simple task of rebuilding homes wiped out in Aceh, she didn’t even yet know what a development model was.

“When I was in banking I gave at the office,” she told WVFC. “This was my first venture into anything like this.” But Henderson’s 25-year career international banking had also given her a keen instinct for what was necessary for a project to actually work – including the project of helping a society recover simultaneously from a natural disaster and a 25-year civil war.

Five years later, Henderson is “founder, president, and sometimes barn builder, field clearer and goat delivery girl,” as she describes herself, for an international agency that focuses on getting some of Southeast Asia’s poorest villagers the tools they need for self-sufficiency. Building Bridges, also known as Yayasan Jembatan Masa Depan (JMD), was from the beginning an Indonesian organization, too, grounded in the friends who first brought Henderson to Aceh after the tsunami, the villagers who welcomed her into their lives, and the educators, social workers, and community leaders who deliver its programs.

Early on, said Henderson, “most NGOs had withdrawn from Aceh,” especially before the August 2005 ceasefire in the area’s civil war. Even after that, political and religious divisions complicated nearly every interaction between local villagers, many of whom had been in the insurgency, and the myriad international agencies flooding in to help. But from the beginning, Henderson–who’d begun her work in Aceh when wartime conditions still required her to pass through 32 military checkpoints–has worked on behalf of anyone who was poor and desperate enough to ask for her help in rebuilding their homes and their lives.

Thus also was born one 0f BBF’s first principles: Not taking sides. “We don’t care what side you were on,” says Henderson, “if you meet our criteria for help and you will do the work.” So the families, individuals, and community leaders participating in BBF programs come from both sides of the pre-2005 conflict, and from the diverse schools of the Islam practiced throughout the islands.

Another first principle for Henderson: When you start something, don’t be afraid to veer into something completely different. In the year spent building 41 houses in Rumpit, Henderson saw that the women she was helping were illiterate. From that grew an overall commitment to ensuring that women and girls receive the education they need. Now, the foundation’s explicit mission is trifold: to create village-level small businesses in livestock and farming; tailored education programs for women, men and children; and innovative livelihood and skills-training programs.

Each of the three aspects, Henderson discovered, is essential for the others to succeed.

  • BBF’s Dairy Goat Program, while inspired by the pioneering work of HEIFER international, is more interested in making sure that goat farming in the villages can succeed. “I saw these NGOs come in, and saw the goats being sold,” Henderson told WVFC— describing something quite contrary to the spirit of such programs, which are about helping poor villagers sell milk and dairy products. “It’s not always a sustainable business model,” Henderson added. Rather than such direct giving, BBF’s program helps set up cooperatives and brings in experts to help. One early result: “One of our partners set up one of the first professional dairies in Aceh.”
  • The organization’s education program now works with the Ministry of Education developing and providing educational materials to schools. “They use something called the Packet ABC system,” Henderson said. “Schools get a packet – if a student passes what’s in it, then they graduate to the next level. If we’re teaching third grade, for example, we’ll have materials and tutors appropriate to that packet.” BBF also runs a few of its own schools, and offers scholarships for girls who otherwise wouldn’t be able to complete school.
  • Perhaps unsurprisingly for a project founded by a banker, there are many specific programs for financial literacy and education in business management. “We’re helping these businesses get started — a dairy is a business, after all!”

Henderson is going to Haiti with the same friend who went with her to Aceh. She’s nervous but hopeful. “I know that Haiti and Aceh are very different… What happened in Aceh is more like what just happened in Chile, with destruction of the coast,” she said. She considered making the trip to Chile instead, but “everyone kept telling me that in Haiti they need us so much more!”

From the beginning, Henderson’s foundation has tried to work in areas neglected by other NGOs — even when civil war was making more powerful organizations fearful. And that’s the approach she’ll take in Haiti, she said. “I know we won’t be in the capital, with those thousands of aid workers,” she said. “I need to go out into the villages you don’t see on the news.”

When we asked her to file short briefs from Haiti for WVFC, Henderson was delighted. She hopes to inspire other women over 50, though she knows her own reinvention is a little singular: “There’s so much we can do,” she said. “And lots of it isn’t far from home.”

First published at Women’s Voices for Change.

Some news and a promise

I almost literally crawled under a rock toward the end of the year, in an effort to finally get this book completed. I can now report honestly that it’s almost there. (For a cheat sheet on its ultimate shape, check out my draft introduction at the book’s own site.)

Some  bits and pieces from around here – some more personal than usual:

  • With the book’s delivery in sight (promises, promises, I know, but….), I’m now blogging daily (ditto) at the Ain’t Marching site. Subscribe to its feed if you can so you don’t miss out. Today, for example, I comment on two medical-whistleblower stories, and on the intrepid reporters who’ve been crucial in exposing them.
  • Speaking of intrepid reporters, the unparalleled Jina Moore keeps breaking new ground, and rolling out new features from her work in Liberia (a project of the Pulitzer Center on Crisis Reporting).  Check it all out at her new site: this week she has a LONG, smart piece in the Christian Science Monitor Sunday mag, but I’m also intrigued by her older, sly piece on the guy who stole all the lawbooks, citing intellectual-property laws. (He needs some African Stephen James Joyce to give him a spanking.)
  • The web magazine I edit, Women’s Voices for Change, just gave me a taste of what it’s like to be in the magazine world: huge changes, a few layoffs, and a hot new editorial director who’s promised to make it famous. I’ll keep you posted as things proceed.
  • Meanwhile, I’m waiting to see if these folks find my work interesting enough to invite me in and give me hell for a few years. Maybe I won’t have to write more than two books that took Ph.D,-level work without that degree to show for it.

and because it’s still Poetry Friday

maria-and-gathering-words

Academically trained in German language and literature at Colby (BA), Tufts (MA), and Harvard (ABD), Maria Luisa Arroyo (www.marialuisaarroyo.com) is an educator, a single parent, a 2004 Massachusetts Cultural Council poetry grant recipient, a 2008 Massachusetts Unsung Heroine, a visual artist, and a self-taught poet. Her collections of poems include Gathering Words/Recogiendo Palabras (Bilingual Press, Tempe, AZ: June 2008). The poem below appeared in her self-published chapbook, Touching and Naming the Roots of This Tree (2007).

On Our Drive to North Haven

95 South and no signs to warn drivers of danger,

of deer attempting to cross this highway

as if deer were like the trees here-

too plentiful too many to matter.

The first doe we passed in the breakdown lane

had collapsed under thunder clouds.

The second sunk into the tar, the swollen tan

of her side a blur to the boys in the back seat,

who were whispering about John Cena, Batista,

the Undertaker’s possible return, wrestlers on TV

more real to them than the death of does.

95 South and no signs here either

to warn drivers of turtles trying to cross.

Far away, dark helmets or rounded tire scraps.

Up close, two turtles as the speeding car

in front of me swerved but still clipped

and flipped the second one onto its back,

its feet frantic for balance, for life.

So the instant the cream pickup veered

into my lane and almost hit the back of my car

where my son and his best friend sat,

I knew in those slow motion seconds

that it took for me to jerk the wheel to the left

and out of collision’s path, in those slow seconds

the boys yelled “Mom!” as the litany of swears

erupted out of my mouth and scared them more,

I knew that the does and the spinning turtles

were the missing signs of warning, of danger.

(Cross-post from Women’s Voices for Change.)