Another good example of bi-partisan idiocracy and how the financials still run the show.
From the 1970s until recently, Congress allowed and encouraged a great deal of financial market deregulation -- allowing big banks to become larger, to expand their scope, and to take on more risks. This legislative agenda was largely bipartisan, up to and including the effective repeal of the Glass-Steagall Act at the end of the 1990s. After due legislative consideration, the way was cleared for megabanks to combine commercial and investment banking on a complex global scale. The scene was set for the 2008 financial crisis -- and the awful recession from which we are only now beginning to emerge.
With the so-called JOBS bill, on which the Senate is due to vote Tuesday, Congress is about to make the same kind of mistake again -- this time abandoning much of the 1930s-era securities legislation that both served investors well and helped make the US one of the best places in the world to raise capital. We find ourselves again on a bipartisan route to disaster...
In other words, you will be ripped off more. Knowing this, any smart investor will want to be better compensated for investing in a particular firm - this raises, not lowers, the cost of capital. The effect on job creation is likely to be negative, not positive.
Sensible securities laws protect everyone -- including entrepreneurs who can raise capital more cheaply. The only people who lose out are those who prefer to run scams of various kinds.
Investor protection is good for growth and essential for sustaining capital markets. Experiments involving doing without such protections -- as in the Czech Republic in the early 1990s, for example, have not gone well. There might be a temporary frenzy, but the subsequent fall to earth will be painful -- and again hard to recover from...
Financial deregulation was the result of decades-long delusion and bipartisan consensus. A major undermining of our securities law seems likely to take place on Tuesday - in a rushed moment of legislative madness.
http://www.huffingtonpost.com/simon-joh ... 62060.html" onclick="window.open(this.href);return false;
