“She did a fabulous job,” agrees Aguirre.
However, the alpha male contingent still gets in its digs. Rubin complains that Born did not act “in a constructive way. My recollection was…this was done in a more strident way.”
And Levitt? He says that Born was “characterized as being abrasive.”
The macho males who resented Born for being “abrasive” (and for being right) went on to engineer other tragic errors. The Depression-era Glass-Steagall Act had barred a bank from offering investment, commercial banking, and insurance services. It had to go, declared the musclemen. So in November of 1999, Congress overwhelmingly passed the Gramm-Leach-Bliley Act, which overturned part of Glass-Steagall, permitting banks, insurers, and securities companies to poach on each other’s terrain and also consolidate. There followed a wave of acquisitions: banks, brokerages, and insurance companies joined forces under one corporate umbrella. The result? Ill-conceived and ill-managed hodgepodges, addicted to derivatives, that the government feels it must pump taxpayers’ money into.
Arthur Levitt is contrite about helping to create the derivatives disaster, but he is not contrite about fleecing San Diego. Certainly, he did far more damage to the world. Sums up Partnoy, “Derivatives are the most recent example of a basic theme in the history of finance: Wall Street bilks Main Street.”