Mortgage-backed securities, subprime loans, tranches. It’s pretty confusing, right? Does it make you feel bored, or stupid? Well, it’s supposed to. Wall Street loves to use confusing terms to make you think only they can do what they do, or even better, for you to just leave them the fuck alone.
Beth Jacobson was a Wells Fargo loan officer who blew the whistle on the bank’s predatory, racist loan-fraud in the runup to the 2008 financial crisis, which tanked the world’s economy and nearly wiped out Wells Fargo (they were rescued with a $36B taxpayer-funded bailout).
Eight years later, Wells Fargo has fired 5,300 employees for participating in a scam that involved opening 2,000,000 fake accounts in its customers’ names, stealing their money and crashing their credit-ratings – then gave the exec who oversaw this a $125M taxpayer-subsidized bonus, and CEO John Stumpf, who took home $200M in bonuses based on profits from the fraud, will keep the money and his job, but the whistleblowers who reported the fraud starting in 2011 were all illegally fired.
Since at least 2011, Wells Fargo had been warned of the fraud by whistleblowers, who were illegally fired for coming forward. But despite the culture of criminality and the shoot-the-messenger approach to whistleblowing, CEO John Strumpf insists that nothing is wrong with the bank – particularly, that the $200 million he was paid for the bank’s seemingly excellent performance during the fraud is his by rights, because he did nothing wrong (when the bank thrives, it’s because of the CEO’s leadership; when it fails, it’s because of the low-level employees’ moral failures).
All this raises an important question. Given that employees were forced into committing fraud in order to make sales targets – and that those who missed those targets lost their jobs – how many of Wells Fargo’s employees were fired for not committing fraud? Is it more than 5,300? Did Wells Fargo start by purging all their bravest employees, then move on to purging the ones who were so desperate they broke the law to keep their jobs?
A member of Congress is accusing a bank CEO and its executives of "clearly" being criminals. Capuano: "Why shouldn't you be in jail?"— Pete Schroeder (@peteschroeder) September 29, 2016
Good fucking question.
And that’s the point. These people, and their brethren from 2008, should be punished. They should go to jail. Their assets should be seized. They should suffer consequences of such enormous magnitude that the resulting epigenetic scar makes any future great grandchildren of theirs shudder when passing a bank.
Optimism won’t fix this. Thoughts and prayers won’t fix this. Empathy won’t fix this. Hope won’t come from using the language of compliance.
These people need to remember what it is to fear.
We live in an era of fraud in America, not just in banking, but in government, education, religion, food, even baseball.
What bothers me isn’t that fraud is not nice, or that fraud is mean. It’s that, for fifteen thousand years, fraud and short-sighted thinking have never, ever worked. Not once. Eventually, people get caught, things go south.
When the hell did we forget all that? I thought we were better than this. I really did, and, the fact that we’re not doesn’t make me feel all right and superior. It makes me feel sad.
And as fun as it is to watch pompous, dumb Wall Streeters be wildly wrong, and you are wrong, sir, I just know that at the end of the day, average people are going to be the ones that are gonna have to pay for all of this, because they always, always do.