The devil is in the details: The JOBS Act is a pending disaster waiting to happen

Posted by AzBlueMeanie:

The banksters of Wall Street still control our government despite these "masters of the universe" having nearly destroyed the world's financial system and economy. No lessons have been learned our political leaders.

Other than President Obama's veterans employment bill, this Tea-Publican Congress has not passed any jobs bills. "Mr. Boehner, where are the jobs?"

One bill for which there is bipartisan support, I am sorry to report, is the JOBS Act which passed the Senate last week on a vote of 73-26 and heads back to the House where a different version of the bill previously passed on a vote of 390-23.

The JOBS Act is not about creating jobs; it is a "Trojan horse" for Wall Street deregulation to allow the banksters of Wall Street to return to unregulated "casino capitalism" and allow the "masters of the universe" to destroy the world's financial system and economy, again. Job creation legislation seen eviscerating shareholder protections in U.S. (Bloomberg News):

U.S. legislation that would roll back securities disclosure and governance rules in the name of job creation is being attacked by consumer advocates and former regulators as an evisceration of investor protections in place since the 1930s.

The package of bills awaiting Senate action after receiving broad bipartisan support in a House vote last week would destroy safeguards dating as far back as the laws that created the Securities and Exchange Commission, according to Lynn E. Turner, a former SEC chief accountant.

“It won’t create jobs, but it will simplify fraud,” Turner said in an interview last week. “This would be better known as the bucket-shop and penny-stock fraud reauthorization act of 2012,” he said, referring to practices banned under securities law.

The Republican-led House, in a show of election-year comity, voted 390-23 to approve measures that would among other things undo a ban on closely held firms soliciting investments, increase the number of investors such firms can have and exempt newly public companies with less than $1 billion in revenue from some reporting requirements of the Dodd-Frank and Sarbanes-Oxley laws. President Barack Obama has backed the legislation as a way to help spur job creation, and Senate Democrats have said they will move quickly on their own version.

Opponents, including former SEC Chairman Arthur Levitt and Barbara Roper, director of investor protection for the Consumer Federation of America, say the approach is wrong-headed because it will hurt investors without achieving the stated goal.

“You don’t increase jobs growth by rolling back regulatory protections, and it’s frankly bewildering that the Democrats have been so willing to buy into the traditional Republican argument,” Roper said in an interview.

SEC Chairman Mary Schapiro “believes that portions of the legislation either unnecessarily eliminate important investor protections or are not balanced with sufficient safeguards,” John Nester, an agency spokesman, said in a statement.

The SEC, which reviewed ideas similar to the legislative proposals after Obama directed federal agencies to remove impediments to business growth, will work with Congress try to correct problems, including a provision that de-regulates analyst research in a way that “could take us back to the conflicted practices of the dot-com bubble,” Nester said in a statement yesterday.

The House bill includes a provision that would permit so-called crowdfunding, allowing companies to raise capital by soliciting and pooling investments online. An SEC small-business advisory committee that reviewed some of the legislative ideas rejected crowdfunding last month, saying it could foster fraud.

Another proposal — giving companies with less than $1 billion in revenue an easier “on ramp” to SEC registration — would represent a “fundamental reduction in the level of transparency and regulation for companies going public,” said Turner, who is managing director of Litinomics Inc., an economic and legal consulting firm based in Mountain View, California.

“A billion dollars in gross revenue is nearly everybody,” Roper said. “You’re talking about allowing most companies that go public to go public without meeting these basic standards.”

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Representative John P. Sarbanes of Maryland, one of 23 Democratic opponents in the House, warned colleagues in a letter that the bill could lead to an “Enron-Type fraud,” invoking the accounting scandal that led Congress to enact the law named for his father, former SenatorPaul Sarbanes.

Senate Democrats, who have been meeting to craft their version of the bill, have said they will address some of the concerns raised by Levitt, Roper and others — many of them echoed by senior lawmakers such as Senators Jack Reed of Rhode Island and Carl Levin of Michigan.

Organized labor sees the JOBS Act as not creating any jobs as well. Richard Trumka of the AFL-CIO issued a scathing Statement following Senate passage of the bill:

With millions of Americans out of work, the Senate voted 73-26 to pass the so-called “JOBS Act” today. The bill, however, will do nothing to create good jobs and stabilize the U.S. economy. Instead, it will deregulate Wall Street – voiding investor protections put in place after Enron and the 2008 financial crisis to protect the retirement savings of America’s workers from fraud and other risks.

One amendment, sponsored by Senators Merkley and Bennet, did pass and was included in the bill. While the amendment will add some investor protections, it is not sufficient to counterbalance the vast harm that the JOBS Act will do to our economy. We are also grateful for the efforts of Senators Levin, Landrieu and Reed, and their co-sponsors, to amend the bill to lessen the harm the JOBS Act will do to investors, pension funds, and the U.S. economy.

We are disappointed – and angry – that despite warnings from current and former financial markets regulators, law professors, institutional investors and consumer advocates, 73 senators voted for the cynically named “JOBS Act.” This is a vote against investors in the real economy and for Wall Street speculators. When the next bubble bursts, Americans will know who to blame.

UPDATE: Robert Eskow from Campaign for America's Future writes JOBS Act: the Dumbest "Bipartisan" Move Since Repealing Glass-Steagall.