Why the lipstick breadwinner is going all the way to the Fed

November 8, 2013 11:56 am

Noel Terry October 15, 2013

janet-yellenPresident Obama’s historic appointment of the first female, Janet Yellen, to head the US Federal Reserve from January should come as no surprise. Nor should it come as a surprise that Obama’s poster-boy, Larry Summers, withdrew his candidacy a while back amid protests of his regulatory record. In 1998, for instance, as economic advisor in the Clinton administration, Summers opposed the regulation of derivatives that a decade later triggered the Global Financial Crisis. As we now know, banks most exposed to derivatives were either wiped out or bailed out.

Perhaps it should also come as no surprise that it was a woman, Brooksley Born, then chairwoman of the Commodity Futures Trading Commission, who advocated the risk-adverse advice to regulate. Not only was Born’s efforts opposed by Summers, but he permitted commercial banks to jump into risky investment activities. Sure, a speculative economic boom hit the ground running and the champagne corks were popping on Wall Street as predatory lending became endemic. Then it all went POP! (so did the gum and the hubris).

Certainly the longest global recession in 80 years caused by men too risky at the helm has been a game-changer. As a spooked corporate world recovers, it now looks less at the testos-risky and more at the risk-averse. With men falling on their risk-rattling economic swords, what was perennially considered a negative for women is now a positive. When the flotsam from the GFC kept returning on the backwash in regular frustrating waves, recruitment pundits began trumpeting “the future is female”. And there is no fitting exemplar of the rise of the lipstick breadwinner than to have a highly qualified woman, Janet Yellen, take over the helm of the US Fed. Assuming Yellen is confirmed by the US Senate, she will join two other recent powerful women – Christine Lagarde as the first woman to head the IMF and Angela Merkel as the first female chancellor of Germany – to have great influence over the global economy. Doubtless it will send a strong inspirational signal to young women everywhere.

While there are exemplary male candidates for the Fed job, a woman claiming the crown has all the hallmarks why the rise of the lipstick breadwinner is such a worldwide phenomenon in the wake of the GFC. As a nervous corporate hierarchy shuffled off to the ashram looking for a sign, what they got came from research that found a link between testosterone and excessive risk-taking. Especially the bit about men are prone to hormonally spur each other on to make reckless decisions (yes, those awful party tricks). This is not to say that women aren’t testos-risky given the fire-in-the-belly cocktail of ambition and adrenalin spikes testosterone. However, pundits claim women are better managers of this gung-ho and reputedly affair-addled hormone. As the new IMF chief, Christine Lagarde, remarked when replacing her disgraced and allegedly over-sexed male predecessor: “[Women] inject less libido, less testosterone into [the workplace]”.

condoleeza riceIt may well have been un-managed testosterone that led to the collapse of banking giant Lehman Brothers that precipitated the GFC since many believe it would never have happened had it been Lehman Sisters. Emotional intelligence, a supposedly female trait, is fast becoming the new steroid in climbing the career ladder. Consultation, collaboration and communication skills are the new buzz words in a jittery business world trying to rebuild; skills that would recognise the iceberg before it hit the Titanic. Yellen saw the iceberg coming in 2005 when she recognized a “bubble” in the housing market: “house prices are abnormally high….a reversal is certainly a possibility”.

Evidence right across the corporate spectrum suggests a humanities degree, predominately a female domain, now opens many different doors and has as much recruitment muscle as a vocational discipline. As new chief hirer of tech-giant Yahoo, Marissa Mayer, told The Times in March 2013: “We……will be hiring about 6000 people this year – and probably 4000-5000 from the humanities or liberal arts”. Evidence suggests the ability to articulate creative ways to problem solve has been elevated in the wake of complicated gobble-de-gook that no one can understand, which is why no one saw the GFC coming. In this fast-changing world, the trick for the knuckle-dragging abrasive alpha male is to adapt or suffer irrelevance (hello, Mr Summers).

In a long drawn-out “mancession” that stretched across the entire globe, pundits opine that since women have a controlled risk tendency in that they scrutinize more (doubtless a “gene” developed from scrutinizing suitors over the course of mankind; i.e. risk-averse is in the DNA), it will boost their managerial prospects. As business confidence returns, doubtless there will be haunting flashbacks of financial Armageddon by an odious package of greed, cowboy risk-taking, and ego bragging rights in the bonus stakes. To paraphrase Britain’s then equalities minister, Lynne Featherstone: men are to blame for the world’s financial woes and must get out of the way. When US Senator Elizabeth Warren bluntly told the Democratic Convention that “the people on Wall Street broke this country”, no one was game to wear an ostentatious pinstripe; that is if they still had one.

women jobsHence no surprises why smart businesses are bending over backwards to entice female talent, and to keep them when motherhood beckons. Women’s right-brain skills are suddenly seen as valuable and not soft, and surveys show that companies promoting women consistently outperform the competition. As billionaire Warren Buffett told The Economic Times (May 2, 2013), he is optimistic about America’s economic future because the nation has begun to “unleash the potential of women”.

On that above point, economists predict that by 2024, the average woman in the US – and in other rich countries – will be out-earning the average man. As women earn more, social norms change, and with it marriage dynamics. And, of course, everything else that tags from that, such as parenting norms. The revolution in gender is only just beginning. Of the 15 job categories expected to grow the most in the next decade, all but two are filled primarily by women. But probably the most poignant indicator of ‘future is female’ is when President Obama told a woman’s college in New York: “You are now poised to make this the century where women shape not only their own destiny but the destiny of this nation and of this world” (The New York Times, May 15, 2012)

Given Obama’s historic appointment of the first female to head the Fed, those words could not ring any truer.

Noel Terry is the author of Marriage War: Lipstick Breadwinners, Erotic Housewives

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