By Lambert Strether of Corrente.
Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
The old reprobate got that one right, didn’t he? This post will be absurdly short (for Naked Capitalism) and absurdly sweet (for Naked Capitalism). I like to stick to simple topics, like ObamaCare, so I’m not going to get into the institutional and financial weeds of Wells Fargo’s “cross-selling” [snort] scam at all. Rather, I want to make a very, very simple point: The good guys are still in the game. It is true that we tested the bloodstream of the body politic for a tenacious financial infection, and found white blood cells. The good news is, there are white blood cells, and they are still working to do what they should do.
Gretchen Morgenson’s current column is titled:
In Wells Fargo’s Bogus Accounts, Echoes of Foreclosure Abuses
And Morgenson writes:
There were enough problematic foreclosure cases involving Wells Fargo moving through the courts that the bank’s dubious practices seemed as pervasive then as the questionable account-opening scheme does now. And some of the elements of both scandals — improper fees and forgeries — are the same.
The only difference: Mr. Stumpf, who was named Wells’s chief executive in 2007, has apologized to the customers his bank harmed with its account opening charade. Lawyers who represented troubled borrowers say no such apology came from Mr. Stumpf during the foreclosure mess.
The only difference? Not exactly. Surely Elizabeth Warren ripping Wells Fargo CEO John Stumpf a new one (along with Sherrod Brown) counts as a difference? And why did they do that? Aside from the sheer fun and entertainment value? Well, my guess is that most voters have been waiting eight long years from the great financial crash for a bankster CEO — or any CEO — to be held responsible for anything, and that a second difference is that the better sort of politician finally understands that, and sees unrigging the system as a road to political power. That’s a difference, too.
And then there’s what is the same: The institutional setting that produced the forgeries and improper fees: A toxic sales culture, whether for liar’s loans or NINJA mortgages. The blowback from that culture — whether by uncorrupt employees, or harmed customers — produced, in the larger political and judicial setting, good guys: Both whistleblowers and activists who in self-defense networked to became subject matter experts, lawyers to bring cases on their behalf, and even disinterested judges and regulators willing to uphold the law. And the odd crusading journalist. People playing those roles, and in some cases the same individuals — I’m amazed to see Max Gardner, a foreclosure lawyer, cited in both Morgenson’s article and at Naked Capitalism in 2011 — are still in there punching today.
It is true that we didn’t see bankster CEOs in orange jumpsuits doing the perp walk after the great financial crash. That can lead to a sense of failure by the good guys. Yves quotes one such good guy in 2010:
A 15 year veteran of Wall Street who put us on to Magnetar disappeared unexpectedly, much to our concern. He resurfaced recently and gave us a bulletin:
Sorry I’ve been out of touch so long.
It’s just that I’ve become quite disappointed/disaffected by the whole thing. We have failed and “they” have won. All the good that could have come out of the debacle has been lost… and it has broken my heart. The Powers That Be have no inclination to learn anything or correct any of the imbalances. What is even more soul crushing? They are actively and desperately attempting to wrench things back to the way they were. That would be “Mission Accomplished” and it disgusts me.
But at most, “they” won a battle, not the war. NC has had occasion to quote Richard Kline before:
The nut of the matter is this: you lose, you lose, you lose, you lose, they give up. As someone who has protested, and studied the process, it’s plain that one spends most of one’s time begin defeated. That’s painful, humiliating, and intimidating. One can’t expect typically, as in a battle, to get a clean shot at a clear win. What you do with protest is just what Hari discusses, you change the context, and that change moves the goalposts on your opponent, grounds out the current in their machine. The nonviolent resistance in Hungary in the 1860s (yes, that’s in the 19th century) is an excellent example. Communist rule in Russia and its dependencies didn’t fail because protestors ‘won’ but because most simply withdrew their cooperation to the point it suffocated.
The good guys are still in the game (and not just Warren and Brown (and Sanders) at the top of the food chain, but countless good guys you’ve never heard of and never will). So let’s think of the last eight years as the end of the beginning. Getting finance into its proper (and small) proportion with the whole of society isn’t a battle. It’s a war.
 Many would unrig the system far more than Warren. But Rome wasn’t burnt in a day. (Perhaps “derig” would be better than “unrig.” Then we could make jokes about “derigulation”!)
 Although the Wells Fargo scam is structurally accounting control fraud, it does not conform to Black’s recipe, because the Wells Fargo executives didn’t try to maximize their looting, so their scheme didn’t blow up. financially, but institutionally.
Mark Baum: I don’t get it. Why are they confessing?
Danny Moses: They’re not confessing.
Porter Collins: They’re bragging.
Granted, the sales culture at Wells Fargo was toxic in a different way. But toxic it was (Financial Times, “No bank will escape fallout from Wells Fargo scandal.”)