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How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

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Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#131

Post by yummyfajitas »

anigbrowl wrote: post #73
yummyfajitas wrote: post #42

Earlier quoted context omitted.

Enormous scale? The total fees from this fraud were $2.4 million. https://www.bloomberg.com/view/articles/2016-09-09/wells-far... The "excuse" is that a bunch of employees did it against management's express instructions, and that management actually took action (albeit stupid ineffective action) to prevent it back in 2014. https://www.bloomberg.com/view/articles/2016-09-19/tough-tar... This is not something that was…

I should have known you'd show up with some bullshit misdirection. The scale of the fraud is enormous because it involved millions of accounts. That means millions of individual decisions to misuse customers' accounts for personal profit. The fact that it generated very little income for WF just means that it wasn't a very successful fraud. You don't get to evade criminal liability by saying that your criminal enterp…

...wasn't a very successful fraud.

The fraud was successful; it caused WF to continue paying underperforming salespeople. The fraud didn't make money for WF because WF was one of the victims - in fact, as far as money lost goes, probably the primary victim.

But the thing is, there is no evidence of any criminal organization or conspiracy. The criminals in this case - the 5,300 sales people - don't appear to have coordinated at all.

Are you sure we are commenting on the same story?

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#133

Post by MarkMc »

mylesm wrote: post #96
MarkMc wrote: post #88

In pushing for jail time for this particular CEO, Elizabeth Warren is barking up the wrong tree. Stumpf made mistakes in setting incentives and monitoring staff culture, but there is no evidence he committed fraud. The bank overcharged customers $2 million dollars and paid a $185 million settlement. That seems reasonable to me. More worryingly, the bank also seems to have harassed and blacklisted whistleblower employ…

Part (most?) of the damage isn't contained in the numbers you cited. Wells Fargo used customer identities to apply for and open credit cards, which could have affected their credit scores and thus potentially the interest rates they paid on loans (that could be a lot for something like a mortgage). It's hard to know what the dollar figure of this is, but it probably raises the damages a little bit.

Yes you're right - the bank's actions had an effect on the credit scores of many thousands of people. Still, the size of the settlement with regulators seems to reflect that.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#134

Post by muninn_ »

BirdieNZ wrote: post #91
muninn_ wrote: post #61

Earlier quoted context omitted.

You do live in a free market. You don't live in a free market by a definition including no interference from government. But that's a dumb and useless definition so it's tossed out here.

"A free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority." Most, if not all Western countries are not free markets. They are often partially free, but definitely not completely free. And there are very few countries i…

The definition is too stringent to be useful, and I made note of the Wikipedia definition (because I knew people would google search "what is a free market" to look up the definition since they don't know it) and already gave at least a partial explanation as to why I disregard that aspect of the definition. It's a useless definition, it's like having a philosophical discussion with a solipist.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#135

Post by muninn_ »

jernfrost wrote: post #86
muninn_ wrote: post #46

Earlier quoted context omitted.

If you live in the West you live in a free market right now. Asking the "libertarians" what they would do about this incident in the "free market" is a deceptive thing to say. Not only does it ignore the fact that we live in a free market, it unjustly pins the failings of the system we live in on a philosophy which has a wide array of different nuances and subgroups. Libertarians range from anarcho-capitalists, to so…

The problem is that libertarians will use the ideal about free markets to oppose any sort of sane regulation or discussion about the limits of the market. I would say markets in the US are rigged in many obvious ways, due to the outsized influence of business in American elections and the political system. So much of business regulations in the US is written by people from the very same business and people who overse…

Pragmatically I'm not a libertarian, though I believe anarchism to be the most moral political philosophy. In practice I lean far left of most people.

What I wanted to stop was this demonization of "the free market" and its wholesale "what would libertarians say nonsense" because it ignorantly ignores the nuances of the political philosophy and unfairly demonizes an economic system that is responsible for a lot of good things.

The issue with patents, well, that's an example of the government failing. Not the market.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#136

Post by Clubber »

conanbatt wrote: post #82
venantius wrote: post #53

Earlier quoted context omitted.

Of course, basically all economic theory is predicated on the assumption that information is basically free and widely available. In reality, this is simply not the case - information is either not free, or it is time-consuming to acquire (and therefore not free in another sense). As soon as one understands this a lot of free market ideology stops making sense and things like Consumer Production Bureaus start to soun…

Economic theory is not predicated on such a thing. Information asymmetry is a modeled and studied effect in economics. The efficient market hypothesis is a model that lets you explain certain phenomena that happen even if information is perfect, and though real life is not perfect, it has resemblances to such scenarios.

It's based on assumptions as he described:

"Economics has been subject to criticism that it relies on unrealistic, unverifiable, or highly simplified assumptions, in some cases because these assumptions simplify the proofs of desired conclusions. Examples of such assumptions include perfect information, profit maximization and rational choices."

https://en.wikipedia.org/wiki/Economics

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#137

Post by conanbatt »

Clubber wrote: post #136
conanbatt wrote: post #82

Earlier quoted context omitted.

Economic theory is not predicated on such a thing. Information asymmetry is a modeled and studied effect in economics. The efficient market hypothesis is a model that lets you explain certain phenomena that happen even if information is perfect, and though real life is not perfect, it has resemblances to such scenarios.

It's based on assumptions as he described: "Economics has been subject to criticism that it relies on unrealistic, unverifiable, or highly simplified assumptions, in some cases because these assumptions simplify the proofs of desired conclusions. Examples of such assumptions include perfect information, profit maximization and rational choices." https://en.wikipedia.org/wiki/Economics

Not economics, some models of economics, and economists and the field is very well aware of the limitation of their own modeling, since the rest is borderline sociology with very limited capacity of experimentation, and some of the most prominent economists (Marx, Adam Smith, Keynes) wrote extensively in sociological terms.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#138

Post by conanbatt »

frgtpsswrdlame wrote: post #81
conanbatt wrote: post #76

Earlier quoted context omitted.

You kill people that rob other people? Where are you from?

Perhaps we should just ban Wells Fargo from business for a couple of years then, equivalent to a prison sentence.

So you would fire 260k+ people from one day to another? Thats pretty cold.

Re: How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters

#140

Post by tehwebguy »

forgetsusername wrote: post #63
anigbrowl wrote: post #56

Earlier quoted context omitted.

Why not? The outcome was entirely predictable, and there is no way that a CEO of one of the country's largest banks doesn't understand the basic concept of economic incentives shaping people's behavior. Nothing personal because I'm sure you didn't intend to make things worse for everyone, but your attitude is exactly what's wrong with the US and with capitalism in general - the notion that once an organization is suf…

> Why not? Because prison is barbaric, and expensive and should be saved for hardened criminals. Nothing personal, but it's people like you who think throwing people in prison some kind of societal solution that we have overflowing prisons of petty criminals.

Perhaps throwing criminal CEOs in prison will speed up the reform our system needs so badly.
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