April 25, 2012
Hiding behind riot police and scurrying into alleyways, executives from America’s biggest bank, Wells Fargo, entered their April 24 shareholders’ meeting in San Francisco while hundreds of peaceful protesters stood outside demanding accountability and justice. Inside, several proxy shareholders were arrested as they called to end Wells’ fraudulent foreclosures, tax dodging, predatory lending, profiting from private prisons, and paying-off politicians to rig the rules.
IFG’s Plutonomy Program posits that globalization’s extreme concentrations of wealth and power require people to deal more directly with the individuals at the very top. So we stood in solidarity with over400 events organized by Occupy, families fighting foreclosure, indebted students, immigrants’ rights groups, and even Wells’ own workers, as they blocked-off several streets in SF’s Financial District. See this video of a foreclosure fighter sharing her story at IFG’s recent Teach-in on Wells Fargo.
John Stumpf, American banking’s highest-paid CEO who made almost $20M in 2011, called the shareholders’ meeting to order inside while, outside, janitors who clean Wells’ offices told the crowd how profits were squeezed from cutting workers’ healthcare and holding down wages. But the bank’s record profits in 2011 were driven mainly by mortgages, where Well’s ruthless “Robo-signing” practices continue to foreclose on families, 84% of which in SF were found to be “clear violations of law” by a recent report from the City Attorney.
Warren Buffet, Wells’ single biggest shareholder, owns almost twice as many shares as any other investor. His legendary investment fund, Berkshire Hathaway, has made him America’s second wealthiest man (after Bill Gates) with a personal net worth of $44B. Buffet has been in the news lately as the namesake of President Obama’s proposed “Buffett Rule” which would begin to reverse years of regressive taxation in America. Buffett says his secretary now pays taxes on a higher proportion of her income than Buffett himself pays. That’s because capital gains are now taxed at only 15% while wages are taxed at almost double the rate. Meanwhile, Wells Fargo avoided ALL taxes from 2008–2010.
The current U.S. tax code’s discrimination against workers’ wages in favor of capital investment has been a driving force of increasing inequality in America, where now almost 1 in 2 Americans is either in poverty, or near poverty. While Buffett positions himself to champion more progressive tax policies, he is even more powerfully poised—as the most influential shareholder of America’s biggest bank—to reduce record inequality by lowering his expectations on the earnings from his own investments. Otherwise, shareholder profits made by reducing the healthcare costs of Wells’ janitors could, strangely, shift from Buffet to the Gates Foundation, whose philanthropy aims to “improve healthcare.” The Buffet Rule would work more effectively if Buffet ruled less ruthlessly by insisting on more realistic returns for his investments.
IFG and allies will continue to call upon those corporations and individuals who benefit most from—and are therefore most responsible for—today’s financial system that is destroying people and the planet.