JOBS Act: The Dumbest “Bipartisan” Move Since Repealing Glass-Steagall

Truth Out has the article JOBS Act: The Dumbest “Bipartisan” Move Since Repealing Glass-Steagall .

This time it’s the deceptively named “JOBS Act,” introduced by the far-right Republicans in Congress and passed overwhelmingly by members of both parties. The President indicated his eagerness to sign the bill early on. Once again basic protections for investors, including individuals and families, are being recklessly overturned in a deregulating frenzy. Some of those protections were enacted in the wake of the Enron scandal, in which sociopathically unscrupulous business people conducted a hoax that ruined thousands of families and deprived many of their life’s savings.
Worse, the bill is designed so that even billion-dollar corporations can be considered “startups,” leaving the door open for a dozen Enrons of tomorrow to shaft the unwary. The common-sense protections proposed by Sen. Jeff Merkley were rejected, while the equally rational protections of Sens. Scott Brown and Jack Reed, which were passed, will be fairly easy for clever sharks to swim around. We’ve seen this play before, and it never has a happy ending. That will no longer be required of them, thanks to the “JOBS” Act.

I have been so busy working on my volunteer projects that I have not been following the news as closely as usual.  I never got around to reading Scott Brown’s email that mentioned “crowd funding” also mentioned in this article.

This article does give faint praise to Brown’s contribution to the bill.

I wonder what Elizabeth Warren has to say about this bill.  Maybe I’ll do a little research and find out.  You can always beat me to it.

Here is the relevant section from Scott Brown’s Enewsletter that I had not had a chance to read.

Have you ever wished you were a part-owner of Facebook or Google when they first started? Or, are you an entrepreneur with a great business idea, but you can’t move forward because of the credit crunch?

To make it easier for people to invest in great ideas or start a small business, I’ve introduced a bill (S. 1791) to legalize something called “crowdfunding.” Here’s the background story: Believe it or not, we still live under investment laws that pre-date the first computer, and those laws prevent most people from investing small amounts – say a hundred dollars – in a new startup company or small business. Because of these rules, only the very wealthy are permitted – and can afford – to get through the red tape necessary to fund a new company.

That’s right – it’s nearly impossible for most people to invest one dollar of seed money into someone else’s new business. This makes no sense, especially in the Internet era, where every day we see new ideas, programs and social networks take off. The same technology and culture that has helped assure people that it is safe to buy a product on Ebay or donate to a charity over the internet can be used to help investors make smart decisions about what companies to support. Over the past couple of weeks, I’ve hit the road to discuss this and other issues facing our small businesses.

Like so much of Scott Brown’s overblown and naive rhetoric, it is pure hogwash that “it’s nearly impossible for most people to invest one dollar of seed money into someone else’s new business.”  From time immemorial, entrepreneurs have been raising money from family and friends to start new businesses. A Vietnamese friend of mine once explained how his extended family started businesses in this country.  Every one contributed money to an investment fund.  Participants with ideas for businesses would ask to borrow from the fund.  They would be given money to start their business.  They would of course have a plan to pay it back.  They would also get the help of more experienced participants who may have already used this fund to start their own businesses.  I don’t think there were any laws that made it nearly impossible for this collaborative to operate.  I am willing to bet that large numbers of immigrant families have used this technique to bootstrap their way into the middle and upper classes in America, and they have been doing it for centuries. When I was growing up, my grandfather used to tell us bedtime stories about how our family got started in this country.

Since crowd funding has been going on long before Brown introduced his bill, (See Crowd funding on WikiPedia or do a Google search), one has to wonder what is in this bill that suddenly makes possible something that has already been going on for quite a while.

Politico has the story Senate passes JOBS Act, with tweak.

The change comes with an amendment, sponsored by Sen. Jeff Merkley (D-Ore.), Sen. Michael Bennet (D-Colo.) and Sen. Scott Brown (R-Mass.), which would place additional restrictions on so-called crowdfunding, in which small amounts of money are collected from large groups of people.

Merkley said the crowdfunding portion of the House bill is “simply a pathway to predatory scams.”

Gee, Scott Brown didn’t mention “simply a pathway to predatory scams.” in his newsletter.

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