By Rachel Reeves
Perhaps it is some comfort for women that none of those dragged before the Treasury Committee for a mauling in recent weeks have been women. But with only one female member of the committee, women have had little opportunity to call the bankers to account.
There is no telling whether women would have made a better job of managing the economy. But according to recent research 90% of executives agreed that a culture encouraging excessive risk-taking contributed to the financial crisis. More than 80% believe failure to understand risk was fuelled by a macho culture, while 80% thought gender balance affects culture, and three quarters believe senior executives advocating caution would be regarded as wimpish. If these views are right, then more women at the top might have been useful.
Going forward we need more diverse and balanced boardrooms where cultural norms and expectations are challenged. Whether it's having community stakeholders, more women or workers on the board – we need to change the way old boys' networks dominate corporate life. Regulators should look at the ability of the board to challenge the usual ways of doing things. If the 'talent' on the board is picked from a small pool of identikit men, it probably isn't doing its job properly.
In my constituency, Leeds West, I see the recession beginning to bite. And it angers me that the men and women in Leeds West, who have played no role in designing the economic architecture in which they have to navigate their lives, are left paying a high price.
Average earnings in Leeds West, at £15k are around 60% of the national average. That is, the average family is living in poverty. Employment among men is high in the building trade. Women tend to work in admin or services, often in the city centre, a couple of miles away. Those working shifts, temping, or working part-time are seeing their hours cut. And it is primarily women in these jobs. Even if still in work, women are seeing their earnings and ability to support their families fall. Leeds West also has a history of loan sharks targeting vulnerable families – often single mums and pensioners. Although a huge amount has been done to drive out the sharks, as banks turn away more people, more will fall victim to loan sharks offering quick and easy loans with interest rates which bear no resemblance to the cost of money.
The most striking thing about this recession is how unfairly the costs are shared. Golden parachutes for those who caused the problem. Unemployment, repossessions and doorstep lenders for the unwitting victims of their actions. Women, with lower savings, incomes and pensions stand to suffer most. And, this recession will be different for women, with more working than ever before. But with redundancies among women in less high profile, non-unionised industries, the experiences of women get less coverage and policy focus. Support for unemployed women needs to be as good as for men.
Research by MORI suggests women are more worried about the recession than men. It is crucial that politicians understand and are responding to the challenges faced by women. And, as we begin to think about what the future economy might look like, we should ensure that a more diverse economy includes more women in positions of authority for a more balanced and sustainable economy.
Read the government report 'Women and the Downturn'.
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Well, seeing as last time Labour screwed up the economy it was a woman (Margaret Thatcher) that rescued Britain, I guess in principle the answer is yes.
The UK economy had been allowed to become dangerously dependent upon the City - indeed it was Labour party policy under Blair, Brown and Livingstone that the City had to have it's every need catered to, in order to generate the largesse that would be showered on the rest of the country in the form of tax credits and the like.
The UK government had been loading itself up with debt since 2001, despite supposedly being in a boom. On top of the borrowing that was reported in the government accounts, there's been a huge amount of borrowing via PFI, which serves mainly to lock in government spending to buy overpriced bits of infrastructure where the main criteria is to look shiny and modern, not necessarily provide a better service. It's also built the mother of all automatic stabilisers with tax credits - child tax credit starts to kick in when your income 'drops' to £50k. It used to be that automatic stabilisers were things like unemployment benefit to stop people falling into complete destitution, now they cover the middle classes any drop in peoples income results in huge spending liability for the government (and no tax revenue to pay for it).
Finally, private individuals have been loading themselves up with debt (private debt excluding mortgages has trebled since 1997). Brown's 'boom' has been built on people borrowing to live beyond their means. Now the music has stopped we've suddenly realised that their aren't enough chairs for everyone.
So, as soon as any recession hit Britain it had the potential to spin violently out of control, especially if it was a recession coming from the City performing poorly, as this one has.
But what about the banks? Is it enough to simply cry 'excessive risk taking'? Not really. That implies that the banks knew how much risk they were taking, and simply took too much. The truth is that they were taking far more risk than they thought they were. Read Mandelbrot or Taleb to see why financial theory is junk. On top of that the banks were overreliant on regulatory badging - if the ratings agency said it was AAA, that's what it was, whether it was a corporate bond or an exotic CDO. Alas the badging done by the regulator and the agencies was based on modelling even more suspect than the banks portfolio managers. Could women have stopped all this happening? Only if you believe that women would have re-written all finance theory or are better at applying fractal geometry than Mandelbrot (the man who invented it).
And how can there be a ministry for women and equality - how does that work? How can it be for women AND equality?
By the way, the way this whole article is written it implies, to me, that the credit crunch and recession are essentially the fault of men, and the victims are essentially women. If this wasn't so stupidly simplistic and polarising I'd find this offensive.
Is it the case then that the board is the result of natural selection in the corporate world and that we should accept this. Obviously the credit crunch demonstrates a lack of regulation over risk taking, but that aside, is it the case that "the board", as an institution, is the result of hundreds of years of evoltuion and to try to change it would be like trying to intefere with nature?
Absolutely: Bring back Maggie!
Thatcher caused recessions, even when the rest of the world was growing.
The hatred of intellectual pygmies doesn't count for much.
I didn't just learn about curves, graphs, and figures, but about the actual effect economics has on peoples lives. And that simple terms like 'resource reallocation' are anything but simple when it applies to families, towns, and industries.
She doesn't say that soley women would have worked better, but that there should be more of a mix.