Citizen trust in financial elites is flagging again, profoundly. Have you been keeping up with EpiPen price gouging? Or how about alleged recent fraud perpetrated on its customers by Wells Fargo Bank?
As the nation’s largest banking retailer, it acknowledged publically in September the unauthorized opening of client accounts in a massive scheme to defraud customers under the mantra of so-called cross-selling.
The unwitting paid various fees, imposed surreptitiously, and also endured falling FICO scores from ancillary credit checks in order to bill those being duped.
Some bank employees complained. CNN Money cites former Wells Fargo manager Bill Bado. He described using the Company’s ethics hotline to spill the beans in 2013. Eight days later Bado says he was fired, allegedly for tardiness. Now he works part-time as a Shop-Rite employee.
Senators from both parties pummeled Wells-Fargo CEO John Stumpf at the Congressional hearing on September 20. He was accused of fostering an internal culture to pressure branch employees to meet impossible sales targets—just to keep their jobs. All the while, Stumpf and others bonused handsomely from the incentive scheme used to prod minions to sell harder.
When public discovery led to adverse publicity, over 5300 bank employees lost their jobs, even though most were mere pawns in the scam. Meanwhile, no senior managers have been fired and Carrie Tolstedt, the program’s overseer, is slated to retire soon with over $100 million in additional golden parachute compensation.
This isn’t cross-selling said Senator Pat Toomey, Democrat of Pennsylvania; this is fraud.
Prior to a second Congressional pummeling to come on the last day of September, Wells Fargo announced a $41 million compensation claw back for Stumph, and a $19 million claw back for Tolstedt. Of course, most of their job-acquired wealth remains.
Wells-Fargo will pay a $185 million government-imposed penalty; but is $185 million sufficient, really?
EpiPen outrage also continues, unabated. Mylan, the patent’s owner since 2007, has raised the two-pack price of the lifesaving injection pen 17 times, by a total of 548 percent. Jason Chaffetz, Republican chairperson of the House Committee on Oversight and Government Reform, claims the so-called juice inside Mylan’s device costs about $1 per dose. Heather Bretch, Mylan CEO, saw her compensation increase from just over $2 million when EpiPen rights were purchased, to almost $19 million, eight years later.
Of course, then we get to Martin Shkreli, recently deposed 32 year-old CEO of Turing Pharmaceuticals. Under his leadership, Turing raised the price of a six decade-old work horse drug for some life-threatening infections, Daraprim, by over 50 times, to $750 a tablet.
When Pope Francis visited here last year, indirectly, these are the sorts of debauched capitalist schemes he may have had in mind, undergirding admonitions to better care for the natural world and for the economically marginalized.
But, what are American citizens—what are global citizens—to do?
Italian political theorist Antonio Gramsci offered a crucial insight—almost a century ago—that could inform our situation. Said Gramsci, if a paradigm is not performing, then begin at the end, not at the beginning. That is, begin at the outcome a much healthier U.S. economic system ought to be delivering, then work backward to discover how to grab that outcome.
We’ll be talking more—much more—about how to nail the sort of changes in thinking Gransci had in mind.
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From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis.