It’s beginning to appear more obvious just how insulated all of Washington D.C is from working people who need real jobs instead of a scheme called a JOBS Act.
JOBS Act Passes House, Heads To President Obama
WASHINGTON — Despite warnings that less government oversight might mean more investment scams, Congress on Tuesday sent President Barack Obama legislation he endorsed making it easier for startups to raise capital without running afoul of federal regulations.
The legislation, backed by Silicon Valley and the high-tech industry, is on course to be one of the few achievements this year for a Congress mired in partisan divisions and primed for the fall elections.
The strong 380-41 vote in the House overshadowed misgivings among some Democrats and Democratic allies – including unions and consumer groups – that the bill backpedals on investment protections put in place after the dot.com excesses and Wall Street meltdown and could lead to fraud and abuse.
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Senate Democrats were unable to rewrite the bill to add across-the-board investor protections but succeeded in attaching one amendment that requires websites involved in crowdfunding to register with the SEC and demands that companies seeking to raise money this way provide information on its financial status, business plans and shareholder risks.
I think everyone should know that it should be generally considered a form of election season euphoria and delusion to pretend more deregulation(stripping investor protections and disclosure laws) for small businesses is what will create real jobs. It won't and
information asymmetry added with any accounting fraud will have the same result as Enron and Tyco. If you don't know, as Congress doesn't seem to know anything on a bipartisan whole, study hall should be a goal. We're condescendingly told that if we just ignore the foundation economist Joseph Stiglitz won his Nobel prize for with business revenue under a billion dollars, these proven dynamics about flawed markets do not matter.
Time and time again, we have to hear a bunch of crap about burdensome regulations from this White House and in an election year I have to wonder why. Why does sharing Republican fantasies have any benefit? Is this the third way to motivate the Democratic base? It leads us to ask ourselves whether President Obama believes in much of what Mitt Romney does. That won't help in an election year.
I fear President Obama does now that he will sign this POS. After all, he, the Senate Majority Leader Harry Reid, and Republicans are all holding hands on this one. While you suffer, they dream of a world where what they think they are selling is "helpful innovative mom and pop fraud" that will magically spur economic growth because markets and innovation, blibbity blibbity boo, don't you know. No, make no mistake, there will be unintended consequences reverberated all around by repealing some provisions of Sarbanes Oxley even on a small level(sure they like to already pretend it doesn't exist anyway while defending their sorry record, but still).
Some won't like to hear the truth as usual, but the practice of excusing these kinds of legislative atrocities on the Hill amounts to what I call a sort of “Democratic constituents in wonderland” saga; an epic FAIL on the scale of John Carter.
Former NY AG and Governor Elliot Spitzer and economist Robert Kuttner laid this out clearly last week.
I don’t think I need to remind anyone that Elliot Spitzer knows this stuff; he was there prosecuting and working to prosecute fraud as NY AG during the .com bubble and tried to lead an investigation into the massive mortgage fraud reported by the FBI in 2004. He did this leading 49 other state AGs until Bush’s OCC used an obscure loophole to stop him and so it had to go to the SCOTUS in 2008. Although it wasn't successful, it was a valiant effort on his part so I would consider him a decent authority. Luckily Elliot Spitzer also explains this rather well so you can rely on the facts.
Kill the JOBS Act! The appalling bill that would repeal essential Wall Street reforms.
Once again, the Puppets on Capitol Hill are about to slam the Muppets on Main Street. The country still hasn’t recovered from the Wall Street-induced financial cataclysm of 2008, yet Congress is preparing to enact the Orwellian ”JOBS Act”—a bill that should in fact be called the “Return Fraud to Wall Street in One Easy Step Act.” The bill will undo some of the most important reforms placed on Wall Street in a generation.
An industrywide resolution in 2003 forced structural changes designed to end some of the conflicts of interest. This was a small step forward in the fight against a deregulatory philosophy that then reigned in Washington and on Wall Street—a philosophy that had made Wall Street’s “masters of the universe” fabulously rich and powerful not by virtue of intellect or creativity but by exploiting conflicts of interest to trade against their clients, leveraging information not available to others, and generally disregarding the importance of upholding the integrity of the marketplace.
In the years following the analyst settlement, structural flaws of equal magnitude were revealed in the mutual-fund industry, the insurance marketplace, and the subprime debt industry. The public rightly demanded reform, and some was implemented.
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Which brings us to the JOBS Act. The bill that has already passed the House will remove the critical protections imposed in the analyst settlement a decade ago with respect to companies with revenues of less than $1 billion per year, allowing them to return to the fraudulent practices of yore.
Former S&L regulator with a record of conviction on financial crimes, William K. Black spells this out rather starkly as well.
The JOBS Act Is So Criminogenic That It Guarantees Full-Time Jobs for Criminologists
The "Jumpstart Our Business Startups" Act, the comically forced effort to create a catchy acronym, is the most cynical bill to emerge from a cynical Congress and Administration. It is an exemplar of why congressional approval ratings are well below those of used car dealers. The JOBS Act is something only a financial scavenger could love. It will create a fraud-friendly and fraud-enhancing environment. It will add to the unprecedented level of financial fraud by our most elite CEOs that has devastated the U.S. and European economies and cost over 20 million people their jobs. Financial fraud is a prime jobs killer.
Powerful regulatory regimes -- strong accounting rules, strict corporate governance, tough securities laws, and vigorous civil and criminal enforcement of the regulations and laws is the greatest infrastructure for strong economic growth that a nation can provide. For decades, the U.S. had an enormous competitive advantage over other nations in raising funds through securities because investors placed great trust in issuers that were subject to effective regulation. U.S. equities traded at a substantial premium compared to securities issued in other nations (which means that companies could raise capital much more effectively and inexpensively). Regulators serve as the "cops on the beat" that prevent a Gresham's Dynamic in which "bad ethics drives good ethics out of the markets."
Our system worked brilliantly. America prospered. American businesses and investors prospered. Unfortunately, economists decided to destroy what worked and to replace it with a fraud-friendly, deregulated world. Alan Greenspan was only the most prominent high priest of the following dogma: "a rule against fraud is not an essential or ... an important ingredient of securities markets" (Easterbrook & Fischel 1991). This faith-based economics had no basis in reality, but it led to aggressive anti-regulatory leaders whose policies were so criminogenic that they led to recurrent and ever-larger serious financial crises.
How do you like that Alan Greenspan quote? It sounds very similar to the utter crap we’re hearing from the President and Democrats in Congress. Too many Republicans and Democrats just can’t seem to let go of dumbass free market magical philosophy no matter how much it has failed the American people; stealing their homes and throwing them out on the street. No argument on the merits of helping emerging small businesses raise money through offering IPOs easier compares to what has been demonstrated above about sound accounting and rules against fraud. Sound accounting and rules against fraud in the past is what established our economy as the largest.
IPOs are also very irrelevant in the grand scheme of things compared to what is really needed for small businesses which is demand for their products and for the government to fill that whole, period. It's almost insulting to even have the conversation right now. Not even the most creative monetary policy can really do much at the zero bound, but we're going to pretend overstated so called burdensome regulations and Enron accounting-light tastes great for small business? More like less filling or a non filler altogether.
Time to get back to reality, Mr. President. Time to strive for less than single digit poll numbers, Congress. To add insult to injury, besides both sharing a hatred of whistle blowers, SEC chair Mary Schapiro(who ignored whistle blowers warnings about Bernie Madoff) is to the left of Obama here.
Jobs Act could remove investor protections, SEC chair Mary Schapiro warns
“Too often, investors are the target of fraudulent schemes disguised as investment opportunities,” Schapiro wrote. “As you know, if the balance is tipped to the point where investors are not confident that there are appropriate protections, investors will lose confidence in our markets, and capital formation will ultimately be made more difficult and expensive.”
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The Jobs Act would lower regulatory hurdles for “emerging growth companies” trying to raise money through public stock offerings. But Schapiro said that the definition of emerging growth companies — those with up to $1 billion in annual revenue — “is so broad that it would eliminate important protections for investors in even very large companies.”
In the aftermath of accounting scandals at firms such as Enron and WorldCom, public companies have been generally required to allow audits of their internal controls. Businesses have protested that the audits are burdensome, and the Jobs Act would carve out new exemptions for emerging growth companies. Schapiro said the exemption was unwarranted.
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Schapiro said the bill “would weaken important protections” put in place after the dot-com era financial scandals, when research analysts at investment banks were shown to have helped their firms promote stocks that they privately derided.
In the real world where we know just how not up to the task Dodd Frank is, we're still talking about "burdensome regulations" instead of fixing Dodd Frank so it is real meaningful reform? There should be real enforceable rules and regulations, not vague toothless garbage.
We should be repeating what Bill Black, George Romer, and others have said, not an architect of the financial and economic crisis named Alan Greenspan. That actually bothers me that I still hear Democrats mouth his garbage after all this time. I don't want to party like it's 1999 or 2000.
It appears I am not alone. I can't imagine why 21 consumer rights and investor groups oppose this. Actually I can. It's not smart to live in a deluded free market fantasy and a living recreation of Einstein's definition of insanity which is trying the same thing and expecting different results.
That applies to expecting people to vote or work for you when you pull shit like this as well.
Anyway, it's Round 2 of DFA's Netroots Nation Scholarship contest. I didn't make it in Round 1, so if you like me or what I write or draw(if you don't like my writing), I am asking you to please vote for me again in Round 2 because your vote doesn't roll over.
Thank you, kossacks!