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Profile in Courage
Thank you very much for Rick Schmitt’s unusually interesting article concerning Brooksley Born, an admirable woman of courage and integrity who managed against heavy odds to succeed in a profession that values neither characteristic highly (“Prophet and Loss,” March/April).
Michael Greenberger and Marna Tucker inadvertently risk exculpating Robert Rubin and Alan Greenspan by attributing their resistance to her efforts to reform the derivatives markets to something so trivial as her gender. Rubin and Greenspan opposed her not because she is a woman, but because she threatened what they and their fellow Wall Street mafiosi foolishly believed to be a rigged casino from which they could only profit at the expense of Middle America. Were Born male, their response might well have been less misogynistic, but would nevertheless have been equally hostile.
I take great pride in my degree from Stanford Law School and think the world of its faculty. Yet I cannot help being reminded that Stanford’s law and business schools have produced far more complaisant errand boys and girls for Wall Street and its minions in Washington than they have courageous reformers.
It would appear that even Born rose to the position from which she blew the whistle only because she was both remarkably intelligent, able and persistent, and for most of her career posed no threat to the established order. After all, Arnold & Porter is hardly a hotbed of Naderite reformism.
This is not to demean her accomplishments. To the contrary, that she maintained her extraordinary sense of right and wrong and profound integrity despite her long association with so many who lack both only increases my admiration for her.
Alumni publications naturally promote self-congratulation. It would therefore be unreasonable to expect the magazine to investigate the degree to which Stanford grads have enthusiastically played key roles in subverting our financial markets and federal government in the service of their masters. Perhaps, however, it would supply the Stanford community with a healthy opportunity to examine the degree to which great universities more often than not produce exceptionally capable but fundamentally nihilistic graduates who far too often devote their exceptional talents to service of values quite opposed to the values great universities should, and pretend to, promote.
Sadly, for every Brooksley Born they produce, Stanford, Harvard, Princeton and Yale produce a hundred intellectually gifted but morally retarded apparatchiks who would never dream of opposing the likes of Rubin or Greenspan, or doing anything else that might threaten their princely partner shares or bonuses.
One hopes that your story of Born’s foresight and courage will inspire more to follow her example. One fears that it will only reinforce in many the cynical, but empirically valid, supposition that threatening the established order is not the way to get ahead.
Mark E. Brennan, JD ’83
Centennial, Colorado
Editor’s note: Brooksley Born is a recipient of this year’s Profile in Courage Award, given by the John F. Kennedy Library Foundation to public servants exhibiting political courage without regard to personal or professional consequences.
It is simplistic to suppose that any one individual could have saved us from the current crisis. Brooksley Born’s was not the lone “vox clamantis in deserto”: there were many other voices that warned us, in vain, about the numerous decisions and policies that led us to the present predicament.
Malcolm Gladwell’s Outliers mentions that plane crashes no longer have a single cause; several relatively minor problems have to coincide to produce a crash. Similarly, lots of things need to go wrong at the same time for a global crisis to occur. The crisis that afflicts us was not created merely by excessive growth in the market for credit-default swaps, though this is a significant component. Several other factors were important. Here is my list, probably an incomplete one, of additional contributors to our travails:
—corruption of mortgage lending standards by government entities seeking increased access to credit by people of lesser means via the invention of sub-prime lending;
—excessive monetary creation by the Fed in an attempt to prop up the economy after the 9-11 attacks;
—nonexistent oversight of Fannie Mae and Freddie Mac and their implicit U.S. government guarantee;
—poor supervision by regulators and auditors of the financing of structured investment vehicles by banks;
—overly aggressive income recognition by managers of collateralized debt obligations, creating perverse incentives that led to obviously flawed products;
—too many financial firms competing for too few profitable deals;
—lax regulation of investment banks that permitted insanely high leverage;
—inconsistent rules about the valuation of assets on the books of financial institutions (one asset, two possible valuations, and three ways of accounting for it); and
—failure by credit rating agencies to exercise independent judgment.
Reviewing this expanded list of causes greatly complicates the morality play proposed by the article, i.e. good regulators vs. evil deregulators. It makes evident a more complex story of failure by regulators, professions and markets. Perhaps it points to the implausibility
of other tales with titles such as “Soft Landing” and “Great Moderation” that we have all heard a hundred times. Maybe it means that the economic cycle ultimately cannot be tamed and that attempts to do so through fiscal, monetary and regulatory policies only set the stage for deeper and longer recessions.
The ineffability of markets recommends greater humility among all the characters in our economic drama.
Saleh Daher, MS ’77, MS ’79
Boston, Massachusetts
Thank you for the excellent article on Brooksley Born. Part of what made this compelling was, of course, the relation to the current economic crisis. However, her descriptions of everyday gender discrimination rampant in the 1950s and ’60s at Stanford brought back memories.
Speaking from my own experience in the same period, I refused to be deterred by a Stanford professor who refused me a Woodrow Wilson Fellowship because I “would only get married, quit graduate school and waste the fellowship.” In fact, within six years after Stanford graduation I had a PhD (from the University of Chicago), and in another 10 years I was a full professor of psychology. I have either been in graduate school or working full time in an academic institution for the past 50 years. In the past five years I have won two major national prizes.
My career was damaged, however, by the belief on the part of science and math teachers in high school and professors at Stanford that mathematics “wasn’t for girls” or that “girls should let boys get the good grades in science.” Unfortunately, I took this to heart and never took an advanced math course, which hampered my professional skills. In case someone thinks this is a thing of the distant past, my granddaughter was recently told that only boys would be tested for admission to the advanced math classes in her school.
I have a suggestion. My 50th reunion is coming in October. Get a team of your writers to interview women in my class who went into full-time jobs in the federal government or into the academic world. We have stories to tell about our time at Stanford and afterwards which will be as compelling as the one in your article. Given the low proportion of women currently in the upper ranks of the professoriate at Stanford, recognizing what alumnae have achieved is overdue.
Judith Vollmar Torney-Purta, ’59
College Park, Maryland
The article would have us believe if Alan Greenspan, and others, simply had acted on Ms. Born’s regulatory recommendations on the credit derivatives market, the current financial crisis would have been averted. What about the health of the underlying credit market on which the credit derivatives market is based? Newer and better regulation of derivatives would not have immunized the credit market, for example, from Fannie Mae’s massive involvement in the U.S. housing mortgage market and the resulting toxic waste, or from too much debt in the economy. To Greenspan’s credit, he recognized the fundamental problems. He warned the banking committees in both houses of Congress of these risks. If these warnings had been heeded, perhaps the current crisis would have been averted.
A good definition of regulation is government involvement in markets. Recent history suggests unprecedented levels of regulation via government-sponsored enterprises triggered the global economic crisis. As gifted a regulator as Born may be, her regulations should be expected to fare no better at avoiding financial crisis than regulations by other public servants.
Lee Kraus, ’77
Greenwich, Connecticut
I was pleased to read about Brooksley Born’s failed attempt to regulate derivative trading as head of the Commodity Futures Trading Commission in the late 1990s. Rick Schmitt’s article seems evenhanded, except for his gratuitous identification of Born’s antiregulatory predecessor as a Republican—the only political affiliation named in the article—although Democrats Robert Rubin and Lawrence Summers were certainly united with Alan Greenspan in quashing her initiatives, according to Schmitt’s own account. The catastrophe is bipartisan: it is about money, not ideology. As [the article] puts it, “the outsized influence of Wall Street lobbyists on the process” derailed her reforms. Follow the money!
Jennifer Larson, ’75
Rochester, New York
What about addiction, which Hank Greely didn’t address at all in regards to “mind-enhancing drugs” (“Brain Boosters,” Farm Report, March/April)? These drugs are used just like all types of speed, and not only do they enhance eating disorders, they are highly addictive. To support their use without talking about [that] is irresponsible. I am a therapist who works with all kinds of patients from the area, including Stanford students referred by Stanford psychiatrists, and the effects of these drugs is a scourge. I agree that they are here and we have to deal with them, but to simply say the FDA has to be stricter is rather laughable, as we all know the FDA is under the spell (and checkbook) of big pharma.
I can understand wanting to have the conversation about these drugs, as all of them are here to stay, but it seems slightly naive to just say, essentially, “what’s so wrong?” There are plenty of problems. I wonder about a discussion of why we are pushing our children so hard. Why do we think cognitive development at the cost of emotional development is so superior? We could widen this to wonder why we push young women not only to be brilliant but skinny as well—we all know they are taking these “mind-enhancing” drugs primarily because they feel high and they don’t eat. Bonus! I just ask that the discussion be truthful and enlightening.
JoAnn Loulan
Portola Valley, California
Regarding “What Good Are the Humanities?” by J. Martin Evans (Farm Report, March/April), I would like to add arts to the discussion of philosophy, history and literature.
Arts encourage imagination and invention, nurture the ability to express ideas and feelings, build confidence in the use of tools, develop awareness and concern for nature and for manmade products, tell stories, record histories, call attention to the great and small moments in life, decorate our world, help us share pain, joy, death, love, loneliness, community, brutality and absurdity. How can we not support arts in education?
Dorothy Manes Pierce, ’52
Santa Rosa, California
Your review of Brian Eule’s book Match Day: One Day and One Dramatic Year in the Lives of Three New Doctors (Showcase, March/April) states there are “more than 150,000 graduating medical students.” The Association of American Medical Colleges gives different statistics: about 15,000 graduating senior students and about 18,000 entering students this year. I well remember how nerve-racking Match Day was when I was graduating from the University of Michigan Medical School. I can’t imagine how much worse it would be if there were really
10 times more new physicians competing for the limited number of U.S. residency spaces.
Diane K. Donley, MD
Traverse City, Michigan
I was shocked when I received the January/February issue. There I was on the cover—the skinny kid in the middle—being grabbed by a cop in 1971.
Unfortunately, a number of my friends recognized me in the photo, causing them to wryly suggest that I must have undergone a political metamorphosis in my later years.
It is not so. If memory serves, I was there with a group of counterdemonstrators, protesting the radicals’ various illegal activities on campus. I just happened to be in the wrong place when the police advanced.
I’d be very grateful if you would allow this letter to clear up any misunderstanding, particularly among some of my more obnoxious prosecutorial colleagues who went to Cal.
Edward R. Jagels, ’71
District Attorney
Bakersfield, California
Imagine my surprise when I looked at the cover and saw myself. I am the woman in the foreground, looking surprised as the police move past me to clear White Plaza. I was not a student in 1971, although my husband was. I had just arrived on campus from my job to participate in the demonstration. It was
an amazing time of political awakening and participation.
Nancy Stone, MA ’91
Davis, California
I am amazed at how Richard Lyman’s memoir encapsulates the experience of those who lived through the ’60s and hated it with a strong passion, enough to create the conservative movement in this country (“‘At the Hands of the Radicals,’” January/February).
I really sympathize with Lyman; his house and family were attacked. However, I don’t believe it was anyone’s intention to “maim, if not kill” his family. It was one of the unfortunate ways that radicals used to ask for attention.
The goal of these people, and of ’60s politics in general, in my opinion, was increased participation and transparency in government of any kind, including university government. Lyman thinks the goal was to end debate and make an end-run around politics. I think the opposite is true, despite the showboating tactics.
I also got a sense of a “why me?” incredulity in the memoir. Lyman was obviously one of the many fair-minded and well-intentioned people who got blamed and demonized for reacting in a paternalistic way to a completely unforeseen development on his turf. The ground rules changed under his feet and he did the best he could.
Demonizing your political opponents is a lot older than the ’60s and is still with us on the left and right. U.S. Rep. Pete Sessions from Texas suggested the Republican Party act like the Taliban in trying to destroy the Democrats (especially Nancy Pelosi). This should disqualify him from being a congressman.
For me, today’s Stanford SRI weapons-type embarrassment is the Hoover
Institution’s getting those Iraqi papers. It smells bad. I’m sure any campus
protests about this would be a lot more sophisticated than those of the ’60s,
as would be the reaction from those in charge.
Patty Maniace, ’82
Astoria, New York
In the 1960s and 1970s, Stanford students put their careers, family relationships and freedom at risk to build an effective, persistent and militant campus movement against the Vietnam War. In dismissing the motives of those students, Richard Lyman fails to ask: why did many of the best and brightest of our generation rebel against the great universities where we studied?
Universities like Stanford were bound to erupt in rebellion because they served contradictory roles. They embodied the highest ideals of free thought and intellectual discourse while simultaneously acting as agents of U.S. militarism and the associated economic empire.
As students, we learned that Stanford’s scientific prowess was dependent on Defense Department contracts. Stanford, wholly owned SRI, and companies on Stanford land played a key role throughout Southeast Asia. The University’s trustees were not an idealistic group of philanthropists, but a wealthy interlocking directorate that undemocratically ran Stanford and a good share of the military-industrial complex. Conflict between increasingly antiwar students and the University was inevitable.
Over a period of years, a group of us spent a great deal of time documenting Stanford’s participation in the war, and we challenged the trustees to demilitarize. We demanded that they hold a public meeting, and on March 11, 1969, five trustees were confronted by a student-staff panel before a full house in Memorial Auditorium.
An undergraduate at that meeting asked trustee Bill Hewlett, ’34, Engr. ’39, if FMC, a company on whose board Hewlett sat, made nerve gas. At first Hewlett denied it, but soon he admitted that FMC had sold the plant to the government six months earlier. This was the turning point for the Stanford Movement. Students with no radical past backed the activists, leading to a remarkable sit-in by hundreds of students, faculty and staff in the Applied Electronics Laboratory, site of Stanford secret military research.
We occupied AEL for nine days, washing the floors, baking bread, printing hundreds of thousands of pages of fliers and reports, showing movies, singing and debating. The sit-in drew overwhelming support from students, faculty and staff. We left only when we were convinced that Stanford would eliminate secret research.
The militant yet educational campus struggle against the war continued for several years. The protesters gave primacy to their opposition to an immoral war. Lyman and his colleagues were entrenched in their defense of the status quo with its attendant power relationships. That’s what the “turmoil” was really about.
Lenny Siegel, ’70
Mountain View, California
I read the article and then I bought the book, Stanford in Turmoil. It was fascinating to read Richard Lyman’s account. I began Stanford as a Barry Goldwater Republican in the fall of 1964, went through a kind of selective radicalism, mostly in my head, and by the time I graduated I inclined toward the ideas of Teilhard de Chardin from discussions at the home of [former law professor] Harry Rathbun, ’16, Engr. ’20, JD ’29. The quest continues. But can we consider further the issues of the time (1966 to 1974) and also include the first five months of 1975? Those next five months are rather telling.
The United States signed the Paris Peace Accords in January 1973, as did North Vietnam and eventually 11 other governments. The Soviets and the Chinese, in violation of these accords, continued to send massive amounts of additional weapons to the North Vietnamese and the Viet Cong. When the U.S. Congress voted to cut off all funding of the South in April 1975, despite President Ford’s plea, the deluge began. Between 2.5 and 3 million people were killed in Indochina with the fall of South Vietnam. Many have unmarked graves in the South China Sea, as they desperately tried to escape in makeshift rafts. The United States took in about 800,000 refugees.
Whatever wrongs were committed by the United States pale compared to the monstrous carnage the Communist North inflicted first on its own people and then on the South and beyond. I conclude the United States should have at the very least continued to support South Vietnam as much as the Soviets and the Chinese supported the North. Or am I being unreasonable to look at the actual consequences of our pullout and failure to support?
And what might happen if we grow weary in Iraq and Afghanistan? Can these things be discussed, or must reason and fact give way to shouting and violence in this, a free country?
Michael Warder, ’68
Malibu, California
An interesting contrast: juxtaposing the letter of Tim Haight, ’66, PhD ’79, with that of John C. Hughes, ’68 (“Remembering Troubled Times,” March/April). While Haight inflates the importance of his Vietnam War protest mission occupying Encina Hall, Hughes points out there were probably “at most 500 students” involved, with 10 ringleaders whipping them up. The unmentioned protagonist of this drama was the media, lead by Walter Cronkite, the liberal sage, who had turned against our country and sided with campus ideologues.
Hughes’s 500 looked like 5,000 on TV; the bank burning at UCSB looked like anarchy beyond any acceptable proportions; Kent State was presented as a crackdown akin to (more recent) Tiananmen Square; and the Democratic Convention round-up was worse than Stalin’s purges, complete with trials. Neil Young’s songs romanticized this mindless hedonism; the Yippies and Chicago 7 were made to be martyrs; Jane Fonda was a noble Joan of Arc collaborating with the enemy—all in the four-sided small screen and myopic reporting of the liberal media.
Neither Haight nor most of his liberal Waterworld ever consider the damage they and their protestations caused. He justifiably complains that 60,000 American soldiers died in that conflict. Does he complain about the millions who were slaughtered as a result of our Democratic Congress pulling the plug on (funding) the South Vietnamese Army or the “killing fields” in Cambodia? Does he not stop to think that those 60,000 soldiers would not have died in vain had we stayed and finished the job? Is he proud of our soldiers being spit on? Has he ever seen tapes of North Vietnamese/Viet Cong generals saying “All was lost until the protests started”?
Haight laments, “At what point is it appropriate to turn from discussion to protest?” Discussion? Liberals are renowned for shouting down any opposing point of view. Their bullhorns are for one purpose only: to drag our country through the mud and celebrate our defeat.
Haight’s cause was no more gallant than Haight-Ashbury, or getting loaded and laid at Woodstock, or bra burnings, or Women’s Liberation, all of which were also going on at the time. This was the time of paisley and pubic hair.
The problem is, the fields of Woodstock have long ago grown back into wheat and chaff. The bras have disintegrated. A half-world away, the fields of Cambodia and South Vietnam are still seeded with the bones of the dead, thanks to the actions of our aging antiwar hippies who, like Haight (and Nancy Pelosi), grace the halls of our schools and our government.
There’s a bigger, badder world out there than on a college campus (or in Congress) with a sympathetic media. Daniel Pearl, ’85, had his head chopped off on camera. Of course, this grisly scene fused with an attempt by the media to show the coffins of American soldiers unloading from transport planes, to show bombings rather than new schools, despair rather than happiness over what we have tried to do. Never mind the bloodthirsty enemies we face.
Mark Collins, ’71
Altadena, California
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