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Woke Capital 2: Banking and Finance

By Elizabeth P.6/12/2022
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The “Big Three”

Featuring the top 500 publicly traded US companies, the Standard & Poor’s 500 Index (S&P 500) is one of the most popular financial indices. For roughly 90% of companies on the S&P 500, their single largest shareholder is one of the Big Three index funds: BlackRock, State Street, and Vanguard. The websites for all three make sure to emphasize their progressive values. BlackRock is suddenly concerned about its ‘social impact’, Vanguard has a whole page dedicated to their DEI efforts and goals, and State Street (in addition to partnering with the Council for Inclusive Capitalism) recently published a report on the corporation’s approach to environmental, social, and governance (ESG) issues.

Do the Big Three genuinely care about these issues? Of course not! Index funds are a perfect example of profits in command, following a passive investment strategy of simply mirroring the trends of the market. When stocks enter or exit a certain financial market index, an index fund buys or sells these stocks. Unlike actively managed funds, index funds don’t even need the services of research analysts or portfolio managers. Without any need to pay workers, index funds can offer much lower rates than their actively managed counterparts. These low fees have been quite attractive to investors; as of 2019, over $11 trillion is now invested in index funds.

Too Woke To Fail?

As anyone who has been to a pride parade since the fall of the Occupy movement can tell you, the big banks have been trying really hard to make themselves seem progressive. To start, let’s look at the four largest US banks: Bank of America, Wells Fargo, JPMorgan Chase, and Citigroup. As of March 31, 2022, these banks combined had a total of $11.527 trillion in assets. The official websites for each of these banks mention diversity, inclusion, etc. – often under a page titled “Who We Are”, creating the illusion that a multinational bank is simply a community of people who are just like you.

Bank of America has partnered with the Council for Inclusive Capitalism to help reach its sustainable development goals (SDG). These goals include dedicating $300 billion by 2030 to “accelerate the transition to a low-carbon, sustainable economy,” spending $1 billion from 2020 through 2024 “to help local communities address economic and racial inequality,” and giving loans to various small business owners. Sounds nice, right? Unfortunately, these good deeds only extend to those who can help out with optics. Bank of America allegedly handed over the information of 211 people to the FBI, just because they made specific types of purchases in the Washington DC area from January 5-7, 2021. Fox News reported that only one of these people was brought in for questioning and none were arrested.

One of the first featured items on the ‘About Us’ page for Wells Fargo is a series of feel-good headlines about helping communities thrive. The ‘History of Wells Fargo’ page begins by stating that Henry Wells and William G. Fargo “built an innovative start-up” in 1852 and that they were dedicated to “finding creative solutions and advocating for more inclusive communities,” whatever that means. All this talk about “inclusion” is quite ironic, considering that in 2020, Wells Fargo rejected over half of all refinancing applications that it received from Black homeowners.

JPMorgan Chase was formed in 2000 by a merger of JP Morgan with Chase Manhattan, which would not have been possible without JP Morgan’s efforts to overturn New Deal banking regulations. Alan Greenspan authored a pamphlet called “Rethinking Glass-Steagall” in 1984 while he was a JP Morgan director, then he became chair of the Federal Reserve only three years later. The Federal Reserve began to reverse the Glass-Steagall Act in 1989 and JPMorgan Chase openly celebrates this event in its “History of Our Firm” timeline, as well as several banking mergers which followed. A decade later, the Gramm-Leach-Bliley Act (which top Citigroup officials were allowed to review before it was officially introduced) effectively repealed Glass-Steagall, a major factor which led to the 2008 financial crisis. As expected, JPMorgan Chase’s “News & Stories” page features headlines such as “Pride is Paving the Way for Others,” possibly as a distraction from all that deregulation lobbying.

Many know Citigroup for the infamous plutonomy memos of 2005 and 2006. Ajay Kapur coined the word “plutonomy” itself in the first part of his Citigroup Plutonomy Report, explaining that the economy in countries like the US is driven by a handful of wealthy people who are pretty much the only ones benefiting from economic growth. The second memo explained that the rich are likely to keep getting richer because “capitalists benefit disproportionately from globalization and the productivity boom, at the relative expense of labor.” But everything is okay! Citigroup is committed to Net Zero by 2050 and posts yearly ESG reports.

PayPal’s Crackdown on Journalism

Last year, Reuters reported that PayPal was partnering with the Anti-Defamation League (ADL) to investigate online transactions that fund extremists and hate groups. Their research will “focus on uncovering and disrupting the financial flows supporting white supremacist and anti-government organizations,” collect information on transactions that are connected to movements that they believe to be extremist or hateful, and share this information with law enforcement and the financial industry.

As of June 9th, both Consortium News and MintPress News have been banned from PayPal, along with multiple anti-imperialist journalists including Caleb Maupin, Jackson Hinkle, and Wyatt Reed. Venmo, which is owned by PayPal, has also banned Hinkle from using its services. It seems that PayPal’s definition of extremism amounts to anything that doesn’t strictly adhere to whatever CNN is saying.

Considering how Bank of America was able to pass on the personal information of innocent people to the FBI, and that PayPal has frozen the assets of multiple journalists without warning, one can assume that multinational financial corporations will continue to weaponize accusations of “extremism” or “hate” against anyone who challenges their power. Although the US Constitution guarantees our right to freedom of speech, these unelected corporations have put themselves above the law and are accountable to nobody and, therefore, are launching a direct assault on our First Amendment rights.