The Wells Fargo scandal pales in comparison to deep government corruption and looting of the public.
The deep government corruption and the outrage over Wells Fargo can best be understood by this classic scene from Casablanca:
What happened at Wells Fargo was wrong. And to me it makes sense to punish management for pressuring sales people to cheat and then imposing no oversight to catch them at it. The executives were benefitting from fraud in pushing credit (and the temptation to go deeper in debt) on unwilling customers.
This interview at NPR shows a vile business model:
If you don’t have time to listen to the story, here’s a sample of what was going on:
Erik says if you didn’t meet your sales goals, that’s when employees would have to have these so-called coaching sessions.
Employee #1 remembers two managers would approach her desk, reprimand her, and march her past her colleagues.
“It’s like being called into the principal’s office,” she says. “Sit down at the large conference table, no windows in this room, they shut the door, lock the door.” Then she says managers would give her a “formal warning” and tell her to sign it. And she says they’d tell her, “If you don’t meet your solutions you’re not a team player. If you’re bringing down the team then you will be fired and it will be on your permanent record.” She said she was in her early 20s, like many of the lower level sales people in the office. She says she was afraid to lose her job, especially because this started back when the economy was still in bad shape. “You were stuck and it was the feeling that no other employer is going to want you because we will ruin you.”
Employee #1 says after one of these coaching sessions she threw up in the wastebasket under her desk. Erik compared the job to being in an abusive relationship.
So they were pressured to meet impossible quotas in selling debt, but there were no controls to prevent them from cheating. And all the executives benefitted from the result. Then, when the fraud is discovered, they fire the low-level sales people, and pretend they had nothing to do with it.
On the other hand, if their guilt can’t be proven beyond reasonable doubt in a court of law, there’s no way the government should punish these executives. The only solution is for people to be tough and refuse to work in such places. They should instead spread the word about these corrupt financial institutions. The whole reason that Wells Fargo has more prestige than a payday loan store is that people would rather win by cheating than quit and tell the truth about the company.
But this question by Republican Congressman Scott Garrett (New Jersey) brings to light how hypocritical the government really is. The way Secretary of the Treasury Jack Lewis squirms to evade answering a simple yes or no question illustrates the deep government corruption at work in the political financial complex.
Jack Lew was never held accountable for the fact he was the Chief Operating Office at CitiGroup that got tens of billions of dollars in government bailout money. That was a far greater amount than the Wells Fargo scandal. Not only did he make massive money off bankrupt and bailed out CitiGroup, but he got appointed by Barack Obama to run the nation’s finances.
When you hear politicians like Elizabeth Warren preach on the sins of Wells Fargo, remember they’re only doing it to divert your attention from their way larger ones.