Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Washington, D.C., April 24, 2012— John Berlau, Senior Fellow for finance and access to capital at the Competitive Enterprise Institute, issued the following statement on Occupy Wall Street's planned "major disruptions" today at the Wells Fargo shareholder meeting  in San Francisco.
Today's planned "major disruptions," in the words of Occupy activists, of the Wells Fargo annual shareholder meeting in San Francisco should not be characterized as an action against the "1 percent." Instead, it is an attack on all shareholders, especially middle-class savers and investors.
These disruptions by outsiders over issues with nothing to do with shareholder return -- indeed many of Occupy's demands will greatly diminish shareholders' returns -- reduce ordinary investors' ability to give those who run their companies feedback on improving performance for shareholders. Indeed, Occupy's implied threats to physical safety may intimidate many middle-class shareholders into not attending.
Occupy's demands would also deprive middle-class savers and investors of their rightful returns. Across-the-board principal reduction for mortgages to address one group's "social justice" demands make no more sense than an across-the board half price sale to address the so-called food price increases. There are cases in which stores might find it to their advantage to reduce food prices, and there are cases in which banks might find it prudent to reduce principal, but that should be up to the individual company and its shareholders. The mass principal reduction that Occupy is demanding could wipe out billions from the nest eggs of Wells Fargo shareholders and mortgage bond investors, including pensions and 401(k)s that serve the middle class.
Hopefully, Wells Fargo shareholders will be able to get on with their business. In the meantime, the SEC should lift barriers to companies holding virtual meetings, so that companies could utilize this as an option to prevent such disruptions from occurring.