How Elizabeth Warren Took Down the CEO of Wells Fargo, and Why It Matters • Hacker News Board

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

#61

Post by muninn_ » Tue, Nov 29, 2016, 2:16 AM UTC

hobs wrote: post #58

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…

>If you live in the West you live in a free market right now. > nobody (in) civilization has really ever lived under what is technically a free market. So, we do or we don't?

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.

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

#62

Post by anigbrowl » Tue, Nov 29, 2016, 2:17 AM UTC

jnbiche wrote: post #45

henrikschroder wrote: post #29

Earlier quoted context omitted.

> The CEO can't know what every last person in the organization is doing, but they should be incented to make it their business to a culture in place that doesn't permit this Where I'm from, there's a group af crimes such that if an employee at a company does them, the CEO will absolutely go to jail, even if they knew about it or not. For example, if your company produces toxic sludge as a byproduct, and someone at t…

> For example, if your company produces toxic sludge as a byproduct, and someone at the company dumps it in nature instead of properly taking care of it, it's jailtime. That's a kind of criminal collective responsibility, which I find repugnant whether it's a mother in Palestine being held criminally responsible for her son suicide bomber, or it's a CEO being held criminally responsible for the wrongdoings of some lo…

Strict liability is an old concept in law. I am not buying these claims of innocence involving a low level employee whose activities were not directed by the CEO; this fraud involved thousands of employees responding directly to a clear economic incentive that came down from the executive suite. You don't get to bring about that sort of situation and then disavow any knowledge of it. That's just an invitation to malfeasance. Look up the legal concept of Scienter - someone who knows or who should have known that fraud was taking place shares in the liability. I'm pretty sure the CEO of of a massive bank like Wells Fargo understands that sufficiently tempting/frightening economic incentives are going to drive employee behavior, just as they do consumer behavior.

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

#63

Post by forgetsusername » Tue, Nov 29, 2016, 2:18 AM UTC

anigbrowl wrote: post #56

forgetsusername wrote: post #19

Earlier quoted context omitted.

Anyone who has worked in a company of any size knows it'd be down near impossible to know the inner working at all levels of the organization. So, yes, the guy is accountable and needs to lose his job. But the idea that he should go to prison for something like this is ludicrous.

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.

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

#64

Post by Meekro » Tue, Nov 29, 2016, 2:19 AM UTC

adekok wrote: post #37

What do the libertarians say about this theft? While I understand the idea of the free market, I don't see how that would have protected the consumer in this case. The CEO has millions of times the power of the average consumer, and can harness thousands of people to his agenda. The consumer is left to either (a) pay the "idiot" tax of being stupid enough to sign up for a thieving bank, or (b) rely on the government…

I can't speak for all libertarians, but I consider myself a libertarian and I can make some observations about this whole situation..

1. Those customers who were stolen from will get to participate in the mother of all class-action lawsuits. The settlement will be outlandish. Juries hate huge corporations that screw the little guy, and the lawyers on both sides know it.

If you don't trust the class action to provide you with an equitable settlement, you can opt out and sue them individually. No doubt many lawyers are already lining up for the easy money here.

I've never known a libertarian who opposes the existence of a legal system.

2. So far, no one has produced evidence that the CEO knew about this or allowed it to happen. Putting him in prison would therefore be unjust. The article claimed that his sales quotas were excessive, but the only source for that is the same employees who knowingly defrauded their employer. Relying on their honesty seems like a bad idea.

What we know for sure is that he had sales targets for his salesmen, which is not unethical or unusual. We also know that the vast majority of Wells Fargo salesmen did not resort to fraud to hit those targets.

Even if the sales targets were high, the employees should either step up to the challenge, request a transfer out of sales, or resign. There are no excuses for defrauding your employer, and claiming "my job was too hard, so I lied!" is cause for termination.

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

#65

Post by orsenthil » Tue, Nov 29, 2016, 2:21 AM UTC

Can she and other senators question and bring down Trump if he does something illegal?

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

#66

Post by vonklaus » Tue, Nov 29, 2016, 2:23 AM UTC

DINKDINK wrote: post #15

vonklaus wrote: post #4

This is good. Articles like this however always seem to recall the subprime mortgage crisis, when "too big to fail" sheltered CEOs and banks from much fallout. I would like to express to Sen Warren, and others, that a more fragmented & transparent financial system is important-- but much less than the broadband & tech sector. Google has 1.6B[0] users of a total of 3.8[1] internet users. too big to fail is 42% of the…

The difference in your comparison though is the internet still works if Google goes under. If a TBTF bank goes under [1] the financial system can halt/implode. Which is the main argument to break up the banks to a level where there isn't total-system fragility. [1] due to their own reckless behavior / Capitalism on the upside, Socialism on the downside.

The economy still works if banks go down, it just gets messy. How many companies & people use gmail to communicate, google apps for biz, android, search.

40% of the internet hitting Bing would potentially overwhelm it. Keep in mind the subprime mortgage crisis was several banks. Add microsoft and google, the world would panic.

Facebook sees 1/3 traffic of google. Just like a run on banks, people desperate for info would prob level news sites maybe even FB.

Consider that outside of content/services we have providers. Verizon down. At&t down. Overwhelm the other towers or broadband failure.

Leaving aside how disgusting it is that these are actively encouraged monopolies and kill innovation & competition, it is dangerous.

1% of Germany lost internet TODAY. Deutsche telkom hit with ddos. 5 Banks in Russia 2 weeks ago. Oct 21 we all remember what happened to dyn.

This isn't even hypothetical, literally getting worse daily.

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

#67

Post by gizmo » Tue, Nov 29, 2016, 2:23 AM UTC

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.

Except that's not how prison exists today. You steal a TV you go to prison. You steal a car you go to prison. You defraud society to the tune of 500 million you pay a fine and you keep your life of luxury? The double standard is unjustifiable.

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

#68

Post by anigbrowl » Tue, Nov 29, 2016, 2:24 AM UTC

AnimalMuppet wrote: post #44

bsder wrote: post #26

Earlier quoted context omitted.

> But the idea that he should go to prison for something like this is ludicrous. Fine. Then the company should get the "death penalty" and be liquidated. Especially for something like the banking sector where the federal government could replace a bank almost instantaneously, the "death penalty" should get dropped on companies that engage in malfeasance.

> Especially for something like the banking sector where the federal government could replace a bank almost instantaneously... Say what? It takes months to years for the FDIC to wind up a small bank. What is your basis for saying that the government can replace a huge bank almost instantly? (Or perhaps the correct question is: What is your definition of "replace"?)

Fire the board and all the senior executives, announce a one-month grace period during which no new internal policies will be promulgated, seek a temporary continuance in any ongoing legal cases, and require the firm to undergo a total audit by a new external auditor. Set up a new firm, raise money through an IPO, do a mandatory buyback of all outstanding shares in the original company, and shut it down.

Since the bank isn't actually insolvent, this is much less drastic than winding it up. Of course it's far more complex than I'm outlining here and might take 6 months or a year. But if corporations can always rely on 'too big to fail' then what good is enforcement? A corporate charter that can't ever be withdrawn is basically a license to commit crime in perpetuity by shuffling the personnel.

If we're giving out personal rights without any of the accompanying responsibilities then how do you expect people to maintain any respect for the legal system? It's rather obviously in decline, not least through episodes such as this.

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

#69

Post by ThrustVectoring » Tue, Nov 29, 2016, 2:24 AM UTC

DigitalJack wrote: post #55

adekok wrote: post #37

What do the libertarians say about this theft? While I understand the idea of the free market, I don't see how that would have protected the consumer in this case. The CEO has millions of times the power of the average consumer, and can harness thousands of people to his agenda. The consumer is left to either (a) pay the "idiot" tax of being stupid enough to sign up for a thieving bank, or (b) rely on the government…

I have libertarian tendencies, but I don't think the free market is the answer to all our woes. Free markets are for efficiency, laws are safety.

Yeah, you don't really want free markets - you want well-designed markets. It just happens that some of the easiest ways to wind up with a poorly designed or implemented market is by doing the things that the free-market folks rail against. For example, making the regulations for interacting with a market so onerous that participants can't engage in the amount of market behavior that they need to fill their needs.

On the other hand, a lack of enforcement against fraud and deception can also ruin a market. For a good example of this, American consumers do not have to check for counterfeit rice, while Chinese consumers do.

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

#70

Post by rz2k » Tue, Nov 29, 2016, 2:26 AM UTC

adekok wrote: post #37

What do the libertarians say about this theft? While I understand the idea of the free market, I don't see how that would have protected the consumer in this case. The CEO has millions of times the power of the average consumer, and can harness thousands of people to his agenda. The consumer is left to either (a) pay the "idiot" tax of being stupid enough to sign up for a thieving bank, or (b) rely on the government…

It's common for purist libertarians to believe that contracts are very important, and their enforcement to be one of the main duties of the state.

I don't think that adequately handles situations where the CEO creates an environment where the emergent behavior of low level employees is to create fake accounts, but it would possibly address the liability of the financial of the victims.