Washington Babylon — October 15, 2008, 9:11 am

A New Media Hero is Born: Just a few years too late

In recent days both the Washington Post and the New York Times have lionized Brooksley E. Born, who during her 1996 to 1999 tenure as head of the Commodity Futures Trading Commission (CFTC) pushed to regulate the trading of derivatives. “A decade ago, long before the financial calamity now sweeping the world, the federal government’s economic brain trust heard a clarion warning and declared in unison: You’re wrong,” a Post article from today opened.”

That “clarion warning,” said the story, was issued by Born and was “met with hostility” by Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert E. Rubin and Securities and Exchange Commission Chairman Arthur Levitt Jr. – “all Wall Street legends, all opponents to varying degrees of tighter regulation of the financial system that had earned them wealth and power.”

If there’s a silver lining to the economic crash, it’s seeing stuffed shirts like Greenspan and Rubin have their reputations brought down to earth. But the current hagiography of Born is a bit ironic, given that her “clarion warning” seems to have been pretty much ignored by the press back at the time, when it mattered.

During her heroic three-year stint as head of the CFTC, the New York Times mentioned Born’s role there 17 times, according to a Nexis search. Seven of those mentions came in filler items that noted her appointment or departure from the agency.

There was very little detailed coverage of Born’s struggle to regulate derivatives trading. Instead, there was the usual “fair and balanced” coverage in which all points of view are given equal weight, making it impossible to draw any informed conclusions.

Typical was a Times piece on May 8, 1998, “A Federal Turf War Over Derivatives Control.” It quoted Born as saying, “What we’re doing is trying to ascertain whether our own regulations remain appropriate, given the changes that have occurred in the market over the last five years.” That was followed by a counterpoint position from an executive at J .P. Morgan & Company. Banks and other financial institutions “opposed tighter regulation of the market, arguing that such changes threaten to crimp innovation and drive the market offshore,” the story summarized.

Coverage at the “Post” was similarly sparse and neutered. “Born’s supporters, including some members of Congress, believed she was willing to stand up to the likes of Federal Reserve Board Chairman Alan Greenspan and Treasury Secretary Robert E. Rubin,” read a 1999 piece that noted her retirement from the agency. “Born’s detractors saw her suggestions as an attempt to grab more regulatory authority for her agency.”

I might have missed something, but I couldn’t find any editorials from either of the newspapers applauding Born’s efforts at the CFTC. And incidentally, Born’s name does not appear in the index of Bob Woodward’s 2000 book, “Maestro: Greenspan’s Fed and the American Boom.” Nor does the word “derivatives.”

The subtitle of today’s Post piece describes it as “the story of how Washington didn’t catch up to Wall Street.” But the media didn’t do a very good job of keeping up either.

Update: A reader, Luca Menato, just alerted me to Born’s Wikipedia entry. It effectively begins with the Times story about her from last week.

Share
Single Page

More from Ken Silverstein:

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Postcard October 16, 2013, 8:00 am

The Most Cajun Place on Earth

A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits 

Get access to 165 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

July 2015

Dressed to Kill

= Subscribers only.
Sign in here.
Subscribe here.

Wrong Prescription?

= Subscribers only.
Sign in here.
Subscribe here.

Travel Day

= Subscribers only.
Sign in here.
Subscribe here.

Fugue State

= Subscribers only.
Sign in here.
Subscribe here.

One Day Less

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
Avian Voices·

= Subscribers only.
Sign in here.
Subscribe here.

“The mockingbird’s bath is an orgy of thrashing and writhing about. When he has finished, one of the innocents alights on the rim of the basin and looks with disbelief at the thimble of water remaining.”
Illustration by Eric Hanson
[Browsings]
Before the War·

= Subscribers only.
Sign in here.
Subscribe here.

“I’m worried that what the Houthis did to push Yemen into a civil conflict in September 2014, the Saudis may end up doing again when they end their campaign by eliminating the Houthis.”
Photograph by Alex Potter
Article
The Speakeasy·

= Subscribers only.
Sign in here.
Subscribe here.

“In order to understand how Marty’s could survive as an institution, I returned a year after my first visit to spend a week at what was sure to be the world’s bleakest comedy club.”
Photograph by Mike Slack
Post
The Lost Land·

= Subscribers only.
Sign in here.
Subscribe here.

“I had first encountered some of these volumes—A Swiftly Tilting Planet, The Giver—as a child, and during adolescence, they registered as postcards from a homeland recently abandoned.”
Photograph by the author
Article
Wrong Prescription?·

= Subscribers only.
Sign in here.
Subscribe here.

“Whatever the slogans suggested, the A.C.A. was never meant to include everyone.”
Illustration by Taylor Callery

Date on which a U.S. patent was issued for a phone with which pets can call their owners:

2/1/11

Bees can count to four.

Washington University researchers found that obese Americans outnumber overweight Americans.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Subways Are for Sleeping

By

“Shelby is waiting for something. He himself does not know what it is. When it comes he will either go back into the world from which he came, or sink out of sight in the morass of alcoholism or despair that has engulfed other vagrants.”

Subscribe Today