Sheila Bair and the Bullies of Wall Street: WC President Reads at Literary House, Explains “How Greed Messed up our Economy”The Honorable Sheila C. Bair
(The Elm) – Washington College’s 28th President Sheila Bair gave a reading from her novel “The Bullies of Wall St.” at our Rose O’Neill Literary House Monday, Oct. 19. “Bullies of Wall St.” is a novel for a younger audience about the 2008 financial crisis. “If you’re not particularly enamored with financial matters [and] you don’t want to wade through the 500 pages that have been written about the financial crisis, this is a little more accessible,” Bair said.
She wrote this novel from the perspective of Main Street rather than Wall Street, “because… most of the books that have been written about the crisis are about the bailouts, all the power plays of Wall Street, and the important people who had come to Washington for their bailouts and were teetering on the edge… but nobody really tried to tell the story from the Main Street [perspective and the] impact that this crisis had on real people and especially on younger people.”
Bair’s stories in the novel are based off of interviews she conducted with families who the crisis had impacted. She went through community groups such as the Center for Responsible Lending to find them. One of the chapters she read for the event was based on a family she interviewed who lost their house and had to move. Unfortunately, they could not bring their beloved 12 year old German shepherd with them and had to leave him at a shelter that was going to put him down. In the story, though, the character Matt finds an owner who will take the dog and rescues him.
Bair confessed that the dog was sadly put to sleep in real life. “I originally wrote it that way, and then I thought to myself, ‘You know, I want this book to be one of hope and some empowerment for young people,’ so I took a little literary license and empowered Mat at the end to find a new home for his dog. Unfortunately, in real life, that didn’t happen as often as we all probably would have liked for it to.”
“One of the reasons I wanted to tell this story about Matt is because there were a good number of… real estate professionals and others who did take advantage of very loose lending standards that we saw prior to the crisis, but there were a lot more families like Matt’s who actually already owned a home and had a nice safe mortgage,” Bair said. These professionals targeted “people who had distressed credit history but… had equity in their house… and they would push these refinancings with mortgages that had very, very steep payment resets after two or three years… They were actually designed to force the borrower to keep refinancing… [but] that only worked so long as prices were going up.”
As some may know, Bair served as the Chairman of the Federal Deposit Insurance Corporation (FDIC) during the time of the Financial Crisis of 2008. “She was one of the first officials to warn about the damage the growing subprime mortgage crisis would pose to millions of homeowners and the economy” and “helped shape and implement the Dodd-Frank Act… and created the Advisory Committee on Economic Inclusion,” according to the WC website.
The 2008 financial crisis that Bair writes about had very lasting effects. According to an article published in 2013 in USA Today, “the country lost almost an entire year’s worth of economic activity.” Even education felt the effects. K-12 funding was “below pre-recession levels when adjusted for inflation” which “often meant cuts to programs such as summer and after-school programs, along with bigger classes sizes. Some states cut enrollment for pre-K as well.” States also “cut spending by more than 28% per college student from 2008 to 2013” which created “skyrocketing tuition” for students.
According to Worldhunger.org in 2009, employment rate rose to 8.5 percent after the recession. In 2007 “36.2 million Americans, including 12.4 million children either did not have enough food or feared that they wouldn’t have enough at some point during the year,” but those numbers had “certainly increased dramatically during 2008… due to spikes in food prices and the recession.”
Bair started writing her book in 2013. “I thought by then a lot of the pain would be gone, and every single family I interviewed broke down in tears… Frequently combined with health problems because of stress… losing jobs and losing health care, when this thing just cascaded, it wasn’t just losing their house. It was a series of financial hardships,” she said. Most families by then were back on their feet with another job, earning a lower salary than they had before, but “it was clearly just a very traumatic event for them that was going to stick with them. They were never going to recover from it… I don’t know about you all, but I’m a dog person. If I had to do what Matt had done, it would’ve tore me apart… It was not a happy ending.”
“I do think it’s important, especially for young people, to understand what happened and to understand the underlying causes because this financial crisis wasn’t the 100 years flood. This was human error,” Bair said. “I do want our young people to understand that because I want them to do better.”