October 21, 2008
Dean Baker
TPMCafé (Talking Points Memo), October 21, 2008
See article on original website
Last week, Associated Press ran a piece profiling several potential candidates for the next Treasury Secretary. The candidates had one feature in common with all prior Treasury Secretaries, they are all white men. This fact is especially egregious because one of the most obviously qualified candidates is a woman: Sheila Bair, the current chairperson of the Federal Deposit Insurance Corporation (FDIC).
During ordinary times, the FDIC is a relative backwater, having to deal with minor policy tweaks or the failure of a small bank here or there. However, the housing crash has put the FDIC at center stage. Ms. Bair has been forced to arrange the takeover or merger of many of the country’s largest banks, including Wachovia, Washington Mutual, and IndyMac. The FDIC has been a key actor in containing the credit crisis.
In this process, Bair has shown a willingness to both confront the big Wall Street banks and to stand up for homeowners. When the FDIC took over IndyMac, one of the mass market subprime lenders, Bair ordered a moratorium on foreclosures on the mortgages held by the bank. She announced that the FDIC would arrange write-downs that allowed homeowners to stay in their home wherever possible. Bair has since been vocal in her criticisms of other banks for being unwilling to take the same steps.
Bair is a Republican, but in the world of Big Finance it is not clear that party affiliation makes much difference. Most of the public will probably care more about the fact that she has managed to steer clear of the Wall Street cesspool than whether she is a Democrat or Republican.
If Sheila Bair’s name is not on the Obama transition team’s short-list for Treasury Secretary, then he needs a new transition team.
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer. He also has a blog on the American Prospect, “Beat the Press,” where he discusses the media’s coverage of economic issues.
