Think of the country's financial crisis in household terms.
No, not household debt, but household mess--and who made it. There's his wet towel on the bathroom floor. His newspapers strewn on the kitchen counter with, oh yes, his crusted-over cereal bowl left on top. The country's financial mess--in the bravado that created it, in the years of denial that let it fester, in the months of "No one saw this coming" excuses that followed the markets' collapse--is a singularly male accomplishment.
Now, however, in a number of important instances, it's women who have grabbed the mop and are busy cleaning up the mess.
Sheila Bair, head of the Federal Deposit Insurance Corp, was one of the first to insist that home foreclosures be halted to forestall the housing market's collapse. Elizabeth Warren, chair of the Congressional Oversight Panel, is helping ensure that taxpayers' bailout money isn't wasted.
And two of the nation's largest banks are relying on women to turn around big chunks of their businesses--at Citigroup, Terri Dial heads consumer banking, and at Bank of America, Barbara Desoer is fixing up the bank's risky acquisition of mortgage giant Countrywide Financial.
These women and a handful of others are still a minority in financial and regulatory circles, but their influence could extend far beyond their numbers. If they do things right--and exert what researchers have found is women's more careful approach to risk--problems may shrink rather than grow. Then, just maybe, it will be noticed that a group of women played a crucial role in getting the nation's economy off the ropes. And maybe then men in business and government will be convinced that women are needed not just for damage control but to help prevent damage in the first place.
At the former Countrywide, which had epitomised runaway lending, Barbara Desoer is leaving nothing to chance. After she took charge last May she ordered up a map room at Countrywide's headquarters in California's San Fernando Valley. Desoer, 56 and a math nerd, isn't interested in geography but rather in charting the lending process step-by-step, the walls covered in diagrams that resemble circuitry.
She's looking for the missed steps (or missteps) that lead to bad loans.
Desoer, who wanted to be an actuary before discovering she could lead people, knows she has little margin for error. She must restructure a heap of old bad loans and comply with a costly legal settlement that Bank of America made to atone for Countrywide's past lending practices, while also selling new mortgages and other bank products.
To make the deal work, she must convert Countrywide borrowers into Bank of America customers who keep their checking, savings and other accounts at the bank. Most of all, she's determined to avoid the behaviors that got the banking industry into the current shambles.
"It's the bravado effect," she says, when asked whether she thinks men in finance took too many chances. Excessive risk-taking, she says, "comes from a trading mentality--and trading tends to be a male activity."
Economists and other experts are already mulling the causes of the economic disaster--from the proliferation of opaque financial products few understood to the tendency of regulators to become wallflowers when they were most needed to shut down the party.
They also might want to consider the scarcity of women in boardrooms and executive suites--and how this led to second-rate decision making. A number of research studies strongly suggest that if management meetings on Wall Street didn't resemble a country club locker room, we wouldn't be in the fix we are in today.
"Women Matter," a study published in 2007 by McKinsey & Co., the management consultants, asserts that companies employing at least 30 per cent female executives--not just a token woman here or there--perform better than all-male outfits. Female managers are more likely than men to make collaborative decisions, to behave as role models and to consider the ethical consequences of their acts, McKinsey's study found. Men, on the other hand, are more likely to make decisions on their own and then order the troops to carry them out.
"Men know nobody can beat the market--but they can," says Catherine Eckel, an economist at the University of Texas at Dallas, who has studied gender and risk for years. Among her findings, which other studies have backed up: Men tend to choose riskier investments and gambles, women less risky ones. And men work harder if they're competing with someone, while women work with the same intensity regardless.
Men also are much more likely than women to have inflated views of their abilities, says Sylvia Beyer, who has studied gender and self-confidence for 20 years. "Girls are raised to be nice, not to be too full of themselves. Boys--they can brag," says Beyer, chair of the psychology department at the University of Wisconsin at Parkside in Kenosha.
In the realm of "male tasks"--much of the business world, computer science and math--men tend to overrate their skills, while women underrate theirs, she has found. In one study Beyer found that men with little more than PowerPoint experience proclaimed higher computer-programming capabilities than did women who'd actually done some programming. "That blew my mind," says Beyer.