TAPPED's Ask a Feminist!
I'm loving this series from The American Prospect (and not only because our very own Ann is involved.) This week, the question is..."Is it sexist to say the financial crisis was caused by men?"
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I need a transcript of this. I can't use sound right now. :(
I'm working on a transcript right now, I'll post in a sec if I'm not beaten to it :)
I appreciate that they're cautious. They finish by saying "Yes, it's sexist to say the financial crisis was caused by men. But it's not sexist to say that the financial crisis was caused in part by the hyper masculine culture of Wall Street."
I didn't like the bit where they said that that risk taking was a "typically male" behaviour. The market is competitive by nature, men take part in it, and so men compete. The ones who take the greatest risk end up with the worst losses but also with the greatest rewards. If women investors became more common, they'd likely fall prey to the same high-risk-high-reward temptations as the men.
Finally, what I really dislike is the total non-mention of the other side of this crisis. The non-Wall-Street housing crisis side.
I'm walking into a shitstorm here, but here goes. I think if you're going to blame the crisis on male investors and their hyper-masculine risk-taking behaviour, it's only fair to also blame women and their dreams of home ownership. The desire for home ownership is arguably stronger in women than in men. It helped drive this massive housing bubble.
Shows like "Divine Design" and "Flip this house" and such were sold to and consumed by women. Ditto for the ideas contained in them: bigger houses, open concept foyers, hardwood floors, kitchens with granite counters, whatever. All of it bought on credit, with the intention of inflating house value, selling it, and moving on to a bigger house.
So while I appreciate the two women in the video saying that it's sexist to say the crisis was caused by men, they miss the crucial fact that female consumer behaviour caused a great deal of the crisis.
I found myself asking similar questions while watching this video. Ultimately though, I concluded that it seems like the whole thing is being way over thought.
If I were to make a video that asked the question "Is it sexist to say the financial crisis was caused by men" it would involve me saying "yes" and then the video ending.
Questions phrased like that always make me very uncomfortable especially when taken seriously.
Good point.
I sort of bristled at the question because women are as much intertwined in the economy as men so to ask the question seemed weird. I agree it was answered diplomatically but it would have been cool if they had brought up some broader points about hyperconsumerism.
This comment is spot on and brilliantly fills in the missing perspective from the video.
I do however, take issue with the characterization of home-buying consumerism as significantly tied to women's behavior--that the "blame" rests largely on women.
While women were undeniably a part of the problem, what made the housing crisis so destructive was the universality of bad mortgages: every adult demographic bought into bad mortgages in a huge way, from new families in all income levels to retirees to immigrants. Heck, I know male college students that went bankrupt trying to flip houses they bought to live in at school. Subprime 2nd mortgages were even targeted at elderly or poor homeowners in need of income.
Each of these groups was marketed at directly. Yes, many home design/improvement shows were targeted at women, but there were also several house-flipping shows targeted at single males looking to make near-overnight profits.
In short, as Creighton Hogg points out below, the problem is tied to cultural homogeniety: Essentially, almost everyone in this great diverse country still bought into the idea that taking out a mortgage was universally a mature, responsible and lucrative thing to do.
"Shows like "Divine Design" and "Flip this house" and such were sold to and consumed by women. Ditto for the ideas contained in them: bigger houses, open concept foyers, hardwood floors, kitchens with granite counters, whatever. All of it bought on credit, with the intention of inflating house value, selling it, and moving on to a bigger house.
So while I appreciate the two women in the video saying that it's sexist to say the crisis was caused by men, they miss the crucial fact that female consumer behaviour caused a great deal of the crisis."
[End quote]
You're joking right? Did you miss the whole sub-prime mortgage scandal, and the predatory lending practices pushed by banks, which were largely run by men? You can't seriously believe that women watching "Divine Design" are to blame for the housing crisis?
I think he's just saying that it's a combination of things. Just like the United States and England were main players concocting these risky bank schemes but the severity of the bubble and then downfall likely couldn't have happened without exporters and countries buying our treasury bonds like China.
Also this is purely anecdotal. But without exception in my small circle of friends it's the women pushing the move into the bigger houses. I have 2 friends in particular that actually bought into the California market early enough that they were in a position to own their homes flat out or at least would have been able to pay the mortgage on 1 salary. I mean, this is a miracle in California!
Yet both couples at the urging of the women, traded up on the homes and are no doubt kicking themselves now that home values on the newer home have tanked and left them over-extended; add to that worries about job security. In talking to them it was absolutely about wanting the bigger bloated house and keeping up with folks--neighborhood had nothing to do with it as they were already living in resourceful and safe areas.
Now I know it's anecdotal, but I do believe that there is a culture of over the top consumption that has gripped our culture and women are as equally to blame here.
And it's not like consumption in of itself is bad. Home ownership can be a useful tool in procuring resources and building communities. If the economic situation were reversed we'd be praising those who drove these markets. But that's not the case.
In a way, I do.
If you're going to blame the Wall Street side of the crisis on hyper masculine culture, then it's just as fair to blame the consumerist side of the crisis on hyper feminine culture. Both can be argued to be social constructs, sure.
I think this recession resulted (partly) from a hyper-feminine culture that has largely been socially constructed. Women bought into it more than men, sure. Just as guns and fast cars are grown up toys for men who watched G.I.Joe, so the home and accessories become a grown up version of Barbie's Dream House.
In this way, Divine Design is just a Barbie commerical for grown-up women in a half-hour format. Women bought into the hyper-feminine consumer culture of home ownership and remodelling, the same culture of "keeping up with the Joneses" that created an ever-upscaling of demands from the middle class for home ownership.
So yeah, Divine Design is poison. You watch it. You want to redecorate. You buy stuff from Lowe's on credit. You need an increase in home value to keep your credit rising. You sell your redecorated home, move to a larger one that's worth more, borrow more money, remodel again, etc. This type of behaviour helped cause the bubble. Sure, towards the end it got ridiculous, as it always does with investment bubbles. But it started on Home and Garden Television.
BTW, while I'm happy the The American Prospect is doing this series, the comments over there are really depressing. The commenters seem more interested in Ann's shirt than what she has to say.
Nah.
People want big houses. So what? Consumer preference does not cause bubbles. If people want big houses and can afford big houses, they can own big houses. Big house is just a resource allocation choice. It comes with other consequences, like suburban sprawl and traffic, of course ...
What causes an asset bubble is too much capital chasing too few good ideas. It doesn't matter how much house your average Flip That House buyer wants, if he or she can't get the mortgage. Whether he or she can get the mortgage ought to be a relatively straightforward calculation of whether he or she can repay it, coupled with an analysis of the value of the security interest in the house -- heavily discounted, because historically, lenders take a bath on defaulted mortgages.
In the bubble, we saw lending arrangements where everybody thought they had managed to pass of the repayment risk on to someone else; because they let their greed get ahead of their good sense and courted outsized risk to generate outsized returns. (It is easy to generate outsized returns by courting outsized risk, at least for a while.) The machanics are complicated, but many of us know the basics: securitization that pooled loans and split them into streams, recombined the streams, and sometimes insured them in some way or another, so that otherwise sensible people thought that somehow the risk from risky loans went ... somewhere. Somewhere else. Who knew where?
The sense that the risk was transmogrified lead to lending policies totally, entirely detached from the ability to repay; which led to loans that anyone could see would not be repaid.
Then the real trouble started. The people who couldn't repay the mortgage could make an offer on a house, forcing everyone else to match it. The bidding war sales of 2004 and 2005 pushed the price of houses skyward until the buyers who had modest needs and sensible ideas about what they could repay were forced either to give up (and, if they waited, who knew if they were giving up on home ownership for two years or ten?) or to match the other bidders with a mortgage they could not repay, hoping that the price of the house kept going up so they could ride it up and flip it.
The folks at home didn't have to watch Flip That House. But they did have to either pay what an inflated market would bear, or stay on the sidelines without knowing if they would be locked out for a long time to come. And historically, especially with out tax code, home ownership is the average American's best way to build wealth.
The people to blame are the folks who directed capital into the core of the bubble, not the consumers. Any other explanation is supported only by post-hoc conservative rationalization bullshit and has no place outside a Rick Santelli faux-populist rant.
Hey, I'm not gonna let Wall Street off the hook entirely. But a suburban couple, perfectly comfortable in a 3-bedroom house, deciding all of a sudden to trade up to a larger 5-bedroom ranch style house which they purchased on cheap credit deserve some of the blame.
Especially if their credit was maxed out to begin with, they had no savings to put down a decent down payment, so they bought a end-loaded (or sub-prime) mortgage, spread over 40 years, with the first couple of years spent paying nothing but interest and none of the equity.
And then the payments started going up.
I have a perfect example in my parents. My mom pushed for a new, larger home even though my sister and I had moved out. My father was against it. I know my mom was consuming those decorating shows, I saw it. She knew she couldn't make any of it come true in her older humble bungalow, so she bought a four-bedroom, two story monster. She's been busy remodelling it every since, which she justifies by saying that if things go bad she'll use the improvements to sell the house at higher values.
Of course, my father has since lost his job, and house prices are doing double-digit drops. And this is in Canada.
So it's completely unfair to characterize men, driven by hyper masculine culture, as being unsensitive to the ideas of risk and reward and responsible for the crisis. The risky financial decisions of millions of women, driven by a constructed hyper feminine culture, is half the story.
I'm just failing to understand how general consumerism is a "hyper feminine" culture. Men are pushed just as much as women to want the bigger, better everything, the status symbols. Granted a lot of the redesign shows are directed towards women, but there are just as many messages from the media telling men that a big house = better provider= better man. I feel like a lot of people (men and women)saw an opportunity to upgrade and went for it.
Men dominate the culture of wall street, but both men and women are trained to want more material things. You gendering consumerism as female is off base and seemingly based on stupid stereotypes ( If I may quote Dave Chapelle "Women be shoppin!")
Ann: Hi, and welcome to "Ask A Feminist: Is It Sexist?" I'm Ann Freidman, the deputy editor here at "The Prospect."
Dana: And I'm Dana Goldstein, the associate editor.
Ann: This week's question comes to us from Matt Iglesias, who is a Tap Online columnist, and a former staff writer here, and he asks, "Is it sexist to say that the financial crisis was caused by men?"
Dana: So here's what the research shows. A six-year study of 35,000 investors found that women investors, their portfolios outperformed male investors, and the reason why was because women tended to be (not sure) and more cautious. As Michael Lewis said of this study, quote, "Single men traded less sensibly than married men, and married men traded less sensibly than single women. The less the female presence, the less rational the approach to trading in the market. "
Ann: There's also a hypermasculine culture of Wall St. At the leading investment banks there's not a single woman in the top 3 positions, Morgan Stanley just settled a class-action lawsuit based on gender discrimination for $45,000,000 (45 million) I believe, and, you know, anecdotal tales like books written by women who worked on Wall St. say that it is undeniably a boy's club. Another example is Iceland, which has an economy that's is an even deeper tailspin than our own. All of the leading banks there save for one were lead by men. And at one bank that was lead by a woman, is the lone one that is still standing. And as she said, in 2006 when she left to start her own bank, after existing within a culture of male-dominated banks, people said she was crazy, but hers is the only one still standing.
Dana: That's not to say that women have no responsibility for the financial crisis; Erin Callan of Lehman Brothers and Zoe Cruise of Morgan Stanley both saw their careers ended, essentially, on Wall St., because they were not skeptical enough about sub-prime mortgages and they had that short-sighted "typically male" view, while on the other hand you have people as George Soros and Warren Buffett, who have been long-term investors who've done really well in the market.
Ann: Um, so go back to Matt's question, is it sexist to say that the financial crisis was caused by men...
Dana: I think that ... that we think, the answer is that yes, it is sexist to say that men caused the financial crisis, but it's not sexist to say that the male-dominated, hypermasculine culture of Wall St. contributed at least in part to the crisis.
Ann: So join us next week for "Ask A Feminist", we promise to actually disagree on something...
Dana: We'll see you then.
Ann: In the meantime you can send us your questions at isitsexist @ gmail.com .
Dana: Bye.
Ann: Bye.
______
I might have missed a word here or there but I tried to get it down as accurately as possible.
I wouldn't call it a 'sexist' question, but more an oddly irrelevant one. It's probably also true that the people who caused the financial crisis were predominately hetero, white, right-handed, & liked coffee.
I'm going to go out on a limb & wager that it's not so much 'masculine' culture that was the problem as it was 'homogenous' culture. A stupid idea doesn't seem as stupid when you're surrounded by people just like you who are all doing it.
I think it is sexist.
..."Is it sexist to say the financial crisis was caused by men?" implies all men are responsible. that's the essence of sexism
a better question could be 'where the people that caused the financial crisis men?'
in either case the answer is no. a whole lot more of us are involved than anyone likes to talk about. it's not just the fault of the bankers. it's the fault of every financially illiterate person out there.
I think it is sexist.
..."Is it sexist to say the financial crisis was caused by men?" implies all men are responsible. that's the essence of sexism
a better question could be 'where the people that caused the financial crisis men?'
in either case the answer is no. a whole lot more of us are involved than anyone likes to talk about. it's not just the fault of the bankers. it's the fault of every financially illiterate person out there.
I think it is sexist.
..."Is it sexist to say the financial crisis was caused by men?" implies all men are responsible. that's the essence of sexism
a better question could be 'where the people that caused the financial crisis men?'
in either case the answer is no. a whole lot more of us are involved than anyone likes to talk about. it's not just the fault of the bankers. it's the fault of every financially illiterate person out there.
BTW, while I'm happy the The American Prospect is doing this series, the comments over there are really depressing. The commenters seem more interested in Ann's shirt than what she has to say.
Wow, I agree Lee. There are some seriously misogynistic comments over there. Who moderates that blog?
Anyway, great video. I'll definitely keep watching "Ask a Feminist," especially since I love Ann's articles here.
I think something so many people fail to understand is: saying that "hyper-masculine behavior" is partly to blame for the financial crisis is NOT THE SAME as saying men are partly to blame.
"Hyper-masculine behavior" refers to some of the behavior that the constant reinforcement of our sexist, heterosexist society encourages. We have been indoctrinated with strict gender roles and associated expectations since birth. Men are encouraged to be risk takers and breadwinners, for example, which encourages the type of high-risk behavior we've seen/continue to see on Wall Street. This is not because the men are to blame. This is because the men are behaving the way society has often told them to.
I don't think people who are offended by this realize that gender is a SOCIAL CONSTRUCT, and that men are NOT biologically predisposed to be risk takers. This behavior is taught and internalized. The social construct is to blame, not the men.
So saying that "hyper-masculine culture is partly to blame for the financial crisis" is not sexist. It's accurate.
P.S. Somewhat related: Wall Street is predominantly white and male, and white males are born with both racial and gender privilege, so it may be easier for white males to feel more comfortable placing personal or familial economic privilege above concern for those of lower socioeconomic or social classes (i.e. the people who are hurt most by this downturn, and women, respectively). But that's just me musing, I'm not sure about that at all.
P.S. Somewhat related: Wall Street is predominantly white and male, and white males are born with both racial and gender privilege, so it may be easier for white males to feel more comfortable placing personal or familial economic privilege above concern for those of lower socioeconomic or social classes (i.e. the people who are hurt most by this downturn, and women, respectively). But that's just me musing, I'm not sure about that at all.
I disagree, especially because most of Wall Street's direct customers are also white and male. I think day to day risk taking is done with the thought that failure is 'losing this guy's/company's money' not 'if i lose this guy's money then the economy may collapse and somewhere down the line people who don't look like me will suffer.'
But I do think you're on point with the thought of gender and racial privilege. Those on Wall Street are able to - and were taught to - take the risks they take because their socioeconomic status/privilege allows them to do so safely. When you're white, male, from a upper-middle or upper class family, and have a degree from a high class school, the consequences of failure are nowhere near as harsh as they would be if you didn't have those advantages. That combined with the social/gender factor that you mentioned creates the overly aggressive and hyper-competitive culture we see in Wall Street. (And politics. And other places.)
"But I do think you're on point with the thought of gender and racial privilege. Those on Wall Street are able to - and were taught to - take the risks they take because their socioeconomic status/privilege allows them to do so safely. When you're white, male, from a upper-middle or upper class family, and have a degree from a high class school, the consequences of failure are nowhere near as harsh as they would be if you didn't have those advantages. That combined with the social/gender factor that you mentioned creates the overly aggressive and hyper-competitive culture we see in Wall Street. (And politics. And other places.)"
Yes, that's what I was trying to say, but you said it better haha.
We have a hypermasculine "Bay Street" banking culture in Canada too, but our banks didn't go grapenuts and lose their shit. Nor did we have that housing bubble problem.
I'm with aussie on this one. Financial illiteracy + greed = oopsy.
Ditto. The housing bubble is a two-way issue that combines risky banking practices with hyper-consumerism. It's true that more risk-averse lending practices would have mitigated this, but credit crunches have happened before in less risky times. It's a hindsight issue, really. Countries gently ease into periods of softer credit, which precipitates even softer lending practices until a crash/crunch. Why does this happen? A combination of lenders and consumers.
The risky lending practices seem to have less to do with hyper-masculinity and more to do with a collective delusion. For the longest time both consumers and lenders viewed mortgages as worthwhile investments/purchases, but took it to an extreme because of a lack of anyone showing up and exposing the idea.
Financial illiteracy is the biggest problem here. Without educational resources for everyone about finance and the risks involved with credit we end up in a culture where people take out loans to do nearly everything, but don't understand the loans themselves.
Patriarchal, capitalist attitudes directly caused this crisis. I think the impact of average people (men or women) abusing the mortgage system is overstated as a cause of the crisis. The crisis was mainly the result of decisions made by government officials and big economic players. The big investment banks leveraged their assets and invested in derivatives in a unsustainable way, probably partially because they knew Washington was likely to bail them out. Congress created the potential for this when they repealed the Glass-Stegall Act in 1999. Glass-Stegall had prevented regular commercial banks like Wells Fargo and Bank of America from investing all their money in the stock market and other speculative ventures. Also, Congress chose not to regulate the derivatives market, which had disastorous results.
Basically, the elite individuals (mainly white men) involved, realized that they could make a ton of money by taking extreme risks, and that even in the worse case scenario, they would be able to dodge much of the responsibility for any eventual collapse and have the taxpayers bail them out.
Men didn't cause the crisis, a small group of men (along with a few token women) caused the crisis.
Part of the crisis has to do with the new ways in which debt was sold on and the short term rewards to those selling the debt. Basically debt was sold on as high, medium or low risk. This sounds fine.
But what happened next is that this debt was sliced up and sold on. So high risk debt was sliced up to low, mediuma nd high risk and sold on. So an investor could be buying debt sold as low risk that had previously been sold as high risk.
As a result few people had any real idea of the risk of the debt assets they held. And as the people selling the debt on were paid at that point they had no personal interest if understanding the real risks of the debt.
Whats more, because of rising house prices, there was the assumption amongst some that even high risk debt as long as it was secured against property wasn't really high risk. After all if prices are rising and someone defaults on their mortgage, foreclosing will generally mean you get all or most of the debt back. Of course falling house prices, or simply large numbers of houses foreclosing in a small geographical area makes this assumption highly questionable.
Added to this is the crowd psychology. When everyone else seems to be making money out of property, or every other bank or investor is making risky home loans or buying bad debt, it can be hard for individuals to stand up against this.
I see it as a kind of expanded enron.