Obama Signs Wall Street/Corporate Backed "Jobs Act": A “Recipe for Fraud” And Job Destruction

[Better Believe It]

Last edited Thu Apr 5, 2012, 11:41 PM - Edit history (3)

FOR IMMEDIATE RELEASE
April 5, 2012
Institute for Public Accuracy (IPA)

“JOBS Act” a “Recipe for Fraud” Creating a “Race to the Bottom”

WASHINGTON - April 5 - WILLIAM K. BLACK, blackw at umkc.edu

Available for a limited number of interviews, Black is now an associate professor of economics and law at the University of Missouri, Kansas City and the author of “The Best Way to Rob a Bank is to Own One.” He was the deputy staff director of the national commission that investigated the cause of the savings and loan debacle. He was just interviewed by The Real News: “JOBS Act 2012 a Recipe for Fraud.”

Black recently wrote an open letter signed by several noted analysts: “The JOBS Act is so Criminogenic that it Guarantees Full-Time Jobs for Criminologists,”states: “As white-collar criminologists (and a former financial regulator and enforcement head) and experts in ferreting out sophisticated financial frauds, our careers and research focus on financial fraud by the world’s most elite private sector criminals and their political cronies. Therefore, we write to thank Congress and the President for preparing to adopt a JOBS Act that will provide us with job security for life. We will be the personal beneficiaries of Congress’ decision to adopt the law without the pesky hearings that would allow critics to launch devastating attacks on the proposed bill based on a brutally unfair tactic — the presentation of facts. Unfortunately, in our professional capacities, we must oppose the bill. This bill is an atrocity.

“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. …

“Among the many fraud-friendly policies that led to the deregulation that prompts our recurrent, intensifying financial crises, the undisputed most destructive aspect is the recurrent, intensifying embrace of the ‘regulatory race to the bottom.’ The ‘logic’ of the argument in the securities law context is that (1) dishonest issuers like bad regulation because it allows them to defraud with impunity, (2) our ‘competitor’ nations (typically described as the City of London) offer weaker regulation to induce the fraudulent issuers to locate abroad, and (3) we must not allow this to happen; we must make sure that fraudulent issuers are based in America. Of course, they never phrase honestly their ‘logic’ about dishonesty. Four national commissions investigated the causes of financial crises — the S&L debacle, the ongoing U.S. crisis, the Irish crisis, and the Icelandic crisis. Each of the commissions has decried the idiocy of the ‘race to the bottom’ dynamic and warned that it must end. The arguments advanced by industry in support of the JOBS Act reflect and worship at the altar of ‘the race to the bottom.’” http://neweconomicperspectives.org/2012/03/the-jobs-act-is-so-criminogenic-that-it-guarantees-full-time-jobs-for-criminologists.html

http://www.commondreams.org/newswire/2012/04/05-9


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Jobs Act 2012 a Recipe for Fraud
BIll Black: The "Jumpstart Our Business Startups Act" will create a race to the regulatory bottom

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Obama JOBS Act Leaves Labor Fuming In Democratic Feud
April 5, 2012

President Barack Obama will sign the JOBS Act into law Thursday, clinching a rare and hard-fought bipartisan victory for his presidency. But to secure the legislative win, he had to pick sides in a simmering feud between interest groups aligned with the Democratic Party. One side of the fight -- the tech industry and venture capital allies -- is all smiles. But the other side -- organized labor -- is seething.

The flashpoint for this Democratic Party conflict -- the JOBS Act -- is the brainchild of Obama's Council on Jobs and Competitiveness, a 27-member group that the president stacked with 19 corporate chairmen and CEOs in an effort, say labor leaders and others, to curry favor with America’s executive class.

But for all of the maneuvering, the JOBS Act is unlikely to deliver much in the way of job growth, according to economists and consumer advocates, who warn that the bill opens the door to a new wave of conflicts of interest and possible financial fraud on Wall Street.

In practice, however, he bill will be a greater boon for venture capitalists, large tech companies and Wall Street banks. This cadre quickly got the president’s backing for the JOBS Act, despite vocal opposition from consumer advocates, federal regulators and the largest U.S. coalition of labor unions, who warned of increased risk of financial fraud.

Read the full article at:

http://www.huffingtonpost.com/2012/04/05/obama-jobs-act-labor_n_1404401.html


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Obama Signs Regulation-Loosening JOBS Act into Law
Economist: Bill will bring fraud, destroy jobs
by Common Dreams staff
April 5, 2012

President Obama has signed today the regulation-loosening JOBS (Jumpstart Our Business Startups) Act, which one leading economist has referred to as an "anti-jobs act" that will lead to more fraud.

Commenting on the “Jumpstart Our Business Startups” Act, economics and law professor William Black wrote in an open letter signed by other analysts: "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.

SEC Commissioner Luis Aguilar also noted in a March 16 speech: "The bill would benefit Wall Street, at the expense of Main Street, by overriding protections that currently require a separation between research analysts and investment bankers who work in the same firm."

Barbara Roper, director of investor protection at the Consumer Federation of America, also sees fraud increasing the passing of the bill. "This legislation will unleash a new wave of damaging investment fraud, undermine market transparency, and increase the cost of capital for the small companies it purports to benefit. Unfortunately, both the administration and a bipartisan majority in Congress have chosen to ignore those warnings."

Read the full article at:

http://www.commondreams.org/headline/2012/04/05-8




President Obama and House Majority Leader Eric Cantor (R-Va.) are all smiles as Jobs Act is signed

[Better Believe It]

1. Jim Hightower: Bi-Partisan Jobs Act "It's just another economic scam written by and for Wall Street"

http://www.democraticunderground.com/1002516799

[DJ13]

2. K&R

Thanks for the post!

[ProSense]

3. I knew

I'd have another opportunity before the end of the day to address this issue. Repeat post:

I see people using comments made before the Senate changes. A lot of the opposition was to the House version. The fact that, per the Merkley amendment, investors with incomes or net worth less than $100,000 are limited to 5 percent of their income and must be provided information helps. Senator Reeds amendment would have added more protection, but it was filibusted by Republicans.

The House passed the bill with a few progressive votes, including:

DeFazio
Ellison
Frank
Waters

http://clerk.house.gov/evs/2012/roll132.xml

Still, given that there is a massive package of regulation (which gets little attention from the critics of the OP bill) still being implemented, I doubt it will have the devastating impact being predicted.

Banks’ preemptive strike against Dodd-Frank

By Suzy Khimm

When Deutsche Bank reorganized its U.S. operations this week in response to new banking rules, it was the latest manifestation of what both supporters and opponents of the Dodd-Frank regulatory overhaul predicted would happen: The law has pushed big banks to reorganize — to comply with the new rules on Wall Street, as well as to avoid their impact...Deutsche Bank and London-based Barclays have moved their commercial banks from their U.S. subsidiaries into their global firms to avoid new, more stringent capital requirements — even though they don’t go into effect until July 2015.

But that doesn’t necessarily mean that Dodd-Frank has fallen short of what its authors intended. By giving up its status as a U.S. bank holding company, Deutsche Bank is forfeiting its access to the Federal Reserve’s emergency lending window. Doing so effectively cuts itself out of any future government-backed bailout in the event of a crisis. One of the overarching goals of Dodd-Frank was limiting taxpayer exposure to bailing out big firms.

“They’re saying, ‘If this is the price we have to pay, we’re going to shed that protection — we’re not too big to fail,’ ” said University of Maryland law professor Michael Greenberger, a former regulator at the Commodity Futures Trading Commission. Deutsche Bank was the Fed’s second-largest discount-window borrower during the 2008-2009 crisis.

<...>

The Volcker Rule, which is scheduled to take effect in July, also prohibits banks from providing more than 3 percent of capital in private-equity or hedge funds, prompting banks to spin off those operations as well. Other Dodd-Frank rules recently prompted insurance giant MetLife to sell its FDIC-insured banking unit, which would have subjected the firm to greater regulation and scrutiny by the Federal Reserve.

- more -

http://www.washingtonpost.com/business/economy/banks-preemptive-strike-against-dodd-frank/2012/03/23/gIQATnUmWS_story.html

Regulators Move Closer to Oversight of Nonbanks
http://www.democraticunderground.com/1002521678

[Scurrilous]

4. ...

[Number23]

23. + a million

[fascisthunter]

5. my Question is this... do both Parties want the same thing?

because when I see our President sign shit like this into law, I have a very hard time taking him on his word when he talks about economic inequality, fairness, etc.

It looks as if we are all being set up for more financial fraud... it's funny because the right wing wants more deregulation, and it looks as if the New Democratic Party wants the same thing after all. They do not want oversight, so that abuse and fraud runs so rampant, that the government becomes too anemic to do anything about it. More than half of congress is owned by the very people who will be benefiting from the fraud, so we all know they won't do shit about it. In fact, they are legislating so that it becomes increasingly harder for ANYONE who runs for congress to do what needs to be done.

I think to myself, aren't the wealthy wealthy enough? Who foots the bill? The tax payer again... that's who. Who pays taxes and who doesn't? I don't know about others here, but I can't afford an accountant to find me loopholes, nor do I have the money nor the means for an off-shore account. Ya know... I'm starting to feel like I shouldn't pay anymore taxes at all... why feed a corrupt system that works against me. I sure as hell will never become corrupt to benefit from this, so what is the use?

THIS will lead to the inevitable... absolute control of wealth for the few while the many suffer. A country filled with saps, waving the partisan banners as if it even mattered in the grand scene of things. Pictures for us to be wooed into voting for people who really do not have our backs... It just doesn't pay. Those who tell you it does, are wishful thinkers, and some are straight up liars who benefit from fraud itself.

It's sad to see this, because you want us all to move in a direction toward economic fairness, equality and the chance to rise up an economic ladder. The problem is, the ladder only goes so high, and the people you would have to share space with, are cannibals, waiting for scraps to fall off the wealthy's table.

[woo me with science]

16. We have one party when it comes to war, economic policy, and the police state.

The differences between the parties on certain wedge and social issues are continually stoked and amplified in order to distract from the collusion in these three areas, to allow voters to be manipulated into fighting each other rather than what is happening to them, and to give the illusion of choice.

[fascisthunter]

18. that is exactly what is happening

[great white snark]

6. You've found a gold mine in Common Dreams.

Very well presented. Professional job through and through.

[Autumn]

7. That site is a gold mine of information.

[dionysus]

8. keep trying.

[Better Believe It]

9. Do you think deregulating Wall Street and destroying jobs is somehow funny?

Please tell me what you are laughing at.

Perhaps it's something humorous written in the articles that I missed.

Thanks.

[dionysus]

10. .

[DevonRex]

11. BBI: All anti-Obama, all the time.

Until the next Democratic president. JMO.

[Better Believe It]

12. Do you have an opinion you'd like to share with us on the Wall Street/Corporate "Jobs Bill"?

I'm listening.

[fascisthunter]

13. wrong

[ProSense]

14. Here's the

President signing the bill: http://www.democraticunderground.com/1002522741

[Autumn]

15. Those sorry ass republicans sure look happy.

Cantor looks like he just passed a big one.

[bart95]

17. well, you'd better believe it - WHAT?

&feature=player_embedded

[fascisthunter]

19. that was what I call going out of one's way

effort

[bart95]

21. you'd better believe it

WHAT?

&feature=player_embedded#!

[fascisthunter]

22. big respect

[KG]

20. rec.

[idwiyo]

24. K&R

[Better Believe It]

25. President Obama and House Majority Leader Eric Cantor (R-Va.) are all smiles as Jobs Act is signed

Obama and Cantor are all smiles as JOBS Act is signed into law
By Jonathan Easley
April 5, 2012

After clashing repeatedly last year, House Majority Leader Eric Cantor (R-Va.) and President Obama made nice on Thursday as Obama signed Cantor’s JOBS Act into law.

But the strain has eased this year, and the two men were all smiles in the Rose Garden as the president affixed his signature to legislation that had been a top priority of Cantor’s.

“We have a very difficult economic situation still,” Cantor said. “The president said today that he has always believed that it is the private sector that is the job generator in this country. I agree with him. I think most Americans agree with him."

The president was joined on stage by Cantor and four other Republicans: Reps. Spencer Bachus (Ala.), Patrick McHenry (N.C.) and Scott Garrett (N.J.), along with Sen. Scott Brown (Mass.). Democratic Reps. John Larson (Conn.), John Carney (Del.) and Terri Sewell (Ala.) were also on hand, as was D.C. Delegate Eleanor Holmes Norton.

Read the full article at:

http://thehill.com/homenews/administration/220217-obama-cantor-all-smiles-as-jobs-act-is-signed-into-law




President Barack Obama signs the Jumpstart Our Business Startups (JOBS) Act

[Better Believe It]

26. Bloomberg Editorial: "the JOBS ACT goes too far"

Small Biz Jobs Act Is a Bipartisan Bridge Too Far
By the Editors
March 18, 2012


.... the JOBS Act goes too far. It would gut many of the investor protections established just a decade ago in the 2002 Sarbanes-Oxley law. A wave of accounting scandals -- think Enron and WorldCom -- had destroyed the nest eggs of millions of Americans and upended investor confidence in Wall Street. The relief would extend beyond small businesses and apply to more than 90 percent of companies that go public.

At the center of the package is a new class of emerging growth companies, defined as those with as much as $1 billion in annual revenue, which would be exempt from a host of disclosure, reporting and governance rules. These companies would be able to operate for up to five years without an independent test of their internal controls -- the checks and balances that help companies prevent outright fraud and costly accounting mistakes.

Perhaps most disappointing, the bill rolls back rules meant to prevent analysts from misleading investors by talking up stocks simply to win investment banking business. Such conflicts of interest were banned in 2003, after federal and state investigations revealed analysts were privately deriding stocks they were publicly touting and failing to disclose conflicts.

There is room to improve small-business rules, but Congress should tread carefully. History is full of examples of legislation enacted in the name of deregulation, only to have it backfire. The 1999 Gramm-Leach-Bliley Act, which ended the Depression-era ban against mixing investment and commercial banking, and the 2000 Commodity Futures Modernization Act, which allowed explosive, but unregulated, growth in over-the-counter derivatives, are two. Both laws helped set the stage for the 2008 financial collapse.

Read the full editorial at:

http://www.bloomberg.com/news/2012-03-18/small-biz-jobs-act-is-a-bipartisan-bridge-too-far-view.html

[woo me with science]

27. Kick