Tuesday, March 20, 2012

The Abominable No Man Strikes Again

The House recently passed the JOBS Act (Jumpstart Our Business Startups) with the assistance of 158 Democrats. Then it went to the Senate, where it was crushed by the DOPES (Democrats Opposing Practically Everything Sensible). Majority Leader Harry Reid led a team of job-killers which included Majority Whip Dick Durbin (D-Ill), Mary Landrieu (D-La), Carl Levin (D-Mich) and Jacke Reed (D-R.I.).

Even Barack Obama supported the bill.

The bill raised the shareholder threshold for companies to go public but created a fast track for companies to avoid the worst provisions of Sarbanes-Oxley and Dodd-Frank regulations and roadblocks for five years. This bill was a boon to small business startups, which everyone except the DOPES agrees is the key to getting the economy moving again. Over the past few years, there was a precipitous drop in American IPOs (Initial Public Offerings), largely as a result of the deleterious regulations of Sarbanes-Oxley and Dodd-Frank, and this was a way to get past that.

No dice, said the DOPES. And this is despite the fact that the Treasury Department’s own experts estimate that the throat-gripping IPO regulations of Sarbanes-Oxley and Dodd-Frank have probably cost as many as 22 million jobs (yes, you read that right—22 million). Technically, Treasury was saying those were jobs "not created." You want a little irony? Back in the House, Barney Frank (D-Mass) himself supported the JOBS Act, along with his heir-apparent Maxine Waters (D-Ca).

It’s very hard to understand the DOPES’ reasoning. Clearly, if implemented quickly, this act would have given the Democrats and their leader in the White House another talking point about being pro-business. It’s nonsense to think that, of course, but jobs would likely have been created in substantial numbers very quickly had the JOBS Act passed. It’s not the stock market “recovery” that voters are looking at in large part. They are looking at pernicious unemployment numbers, and this would have worked to the Democrats’ advantage by possibly reducing those persistent 8%+ numbers.

Reid’s quashing of this very sensible bill instead proves that the recalcitrant Democrats in the Senate don’t fully understand new realities, even though they call themselves progressives. One of the major features of the JOBS Act was that it allowed companies to solicit purchases online, following the CraigsList and E-Bay models. That meant that entrepreneurs could raise money online in $100 or less increments per investor, somewhat akin to the old “penny stocks” concept. Senator Jack Reed pooh-poohed the idea that such a model would work, saying that the model flies in the face of decades-old securities regulation.

That was the point, of course, but Reed doesn’t like it. Most of those regulations that Reid and Reed love so much were imposed originally during the Great Depression, at a time when many people had no telephones and the Internet wasn’t even a gleam in the eye of yet-unborn inventor Al Gore. But Reed snarkily said that E-Bay and Craigslist selling used tennis shoes and unwanted clothing is not the same thing as purchasing small stock offerings. The gummint must vet it first. Reed ignores the fact that those same private entities also sell outrageously expensive jewelry, antiques and real estate. But Reed thinks $100 online investments require more government regulation than million dollar trades in real property.

The other advantage of using the Internet for funding startups is the speed with which it can be done. The faster the startups can fund and get to work, the sooner jobs are created and unemployment reduced. But Reid and the other DOPES, who claim to hate Wall Street, have chosen to protect those old Wall Street firms and their arthritic way of doing business over innovation and fresh ways of raising money. “Progressives” indeed. It’s much faster and much less expensive for a small, viable startup to post an offering on the Internet than to hire huge prospectus teams, regulations experts, and an entire mailing and telephoning team to get the word out. Yet that creaky old system is what the Senate DOPES are protecting.

Online investors would get more realistic and useful information through the Internet publication than the Obama administration got about Solyndra using all the traditional methods. And savvy small private investors would do considerably more investigation into the company for a $100 investment than the Obamists did with the half-billion dollars of taxpayer money wasted on the Solyndra scam.

The JOBS Act would have lifted the threshold for most Securities and Exchange Commission (SEC) regulations and mandates from 500 to 1,000 shareholders before the regulations kicked in (2,000 for community banks). Moreover, it would have removed the restrictions on stock ownership for company employees. Who is more likely to know the viability of a startup than employees who are willing to invest their own hard-earned money in the company they work for? Insider trading rules should be applied to institutional investors and management in this particular instance rather than to employees who want to share in the wealth.

If there is nothing else to be learned from this, it must teach us that it’s time to get rid of Democratic Senators who are still in love with Roosevelt-era rules and regulations which were designed in a much more primitive economy. We must rid ourselves of those who don’t know the difference between logical and necessary regulation and gross overregulation. We must elect younger, savvier, pro-business Senators who understand the verities of the twenty-first century. And if you won’t take my word for it, ask Barney Frank and Maxine Waters.

29 comments:

Joel Farnham said...

LawHawk,

If passed, won't Obama take credit for passing a good JOBS bill? If that is so, do you think that maybe the opposition to the bill could partly be in trying to remove Barack without seeming to?

T-Rav said...

Remind me again why Reid is Majority Leader? He's stupid, but I didn't think he would be this stupid. Hrm, maybe there's just no one better to put in his place, considering next-in-line Durbin also screamed bloody murder over the bill.

Tennessee Jed said...

Maybe he is just trying to help B.O. out with his campaign of running against a "do nothing" congress.

LawHawkRFD said...

Joel: That's pretty convoluted reasoning, but given how devious the Democrats have become, anything's possible. Have you considered joining the Democratic Party and working for us as a double-agent?

T-Rav said...

By way of contrast, over in the House, Paul Ryan and company are currently unveiling the new "Path to Prosperity" budget proposal. (sigh) Tell me again why he isn't running for President?

LawHawkRFD said...

T-Rav: The Democrats have spent years trying to paint Republicans as out-of-touch old fuddy-duddies. But Reid is the ultimate fuddy-duddy. I actually think the Internet and modern technology scare him. Seniority is the major determinant of who gets into which position of power, and Reid is extremely "senior."

Joel Farnham said...

LawHawk,

I hope you bit your tongue. Me a double agent? Sheesh.

Has it dawned on you that maybe some Democrats have concluded that Barack, for all his virtues, is toxic to the Democrat brand and should be removed as quickly as possible?

LawHawkRFD said...

Tennessee: Isn't it sad that so many people only hear what they want to hear? I think you could be on to something. Obama out there campaigning against a do-nothing Congress without mentioning that it did nothing when he had strong majorities in both houses, and now stops every positive bill passed in the House with parliamentary maneuvering in the Senate. And the public won't hear the second part anywhere in the MSM.

T-Rav said...

LawHawk and Joel, I once "eavesdropped" on a local Democratic event to report back to my College Republican friends. I don't advise it. Things went well, it's just very difficult to even pretend to go along with the vitriol at such meetings.

LawHawkRFD said...

T-Rav: How long do you think it will be before the Democrats start calling it The Path to Austerity? They did the same thing with the Contract With America, twisting it into The Contract On America back in '93-'94. Ryan is one of those young, dynamic Republicans that we need more of, and he certainly understood the brilliance of the JOBS Act, unlike dinosaur Harry Reid.

LawHawkRFD said...

Joel: I'm sure some Democrats have become disillusioned with him, but the hard left is in charge of the party, and the most powerful Democrats in both houses are true believers. They bought into the messiah thing, and like all true believers, facts and reality don't faze them. They think of us as the Romans and Temple Jews who are trying to destroy the chosen one, without heeding the Biblical warning about false messiahs.

LawHawkRFD said...

T-Rav: That was brave. But at least your story would be true, unlike Steven Glass writing about the hi jinx at a meeting of the Young Republicans that he fabricated out of whole cloth.

Writer X said...

DOPES. That is so appropriate, with Reid being the biggest one of all. I still can't believe Nevada voters re-elected this clown.

LawHawkRFD said...

WriterX: I think I'll continue to use that acronym. It is apt, isn't it?

Nevada has been playing that compulsive Las Vegas gambler bit for far too long. Instead of folding when they should have known they had a losing bet, they doubled-down and re-elected Reid.

AndrewPrice said...

I can't wait until he finally loses control of the Senate.


(Don't forget, it's Star Trek Tuesday at the film site: LINK

tryanmax said...

LawHawk, if "Path to Austerity" is the best the Dems can come up with, I'm not too worried. That term is only a dirty word to people on the dole, and among them, it's only dirty to the ones who have ever cracked a dictionary. "Path the Poverty" seems more in tune with what Dem voters understand, and at that point, it might sound a little too heavy-handed.

tryanmax said...

"Path to Poverty" I meant. That's a weird typo.

LawHawkRFD said...

Andrew: Knock on wood. I truly think that the only way we can get the nation back on track and off the road to serfdom is to capture both houses and the White House.

LawHawkRFD said...

tryanmax: The people on the dole are the very people who comprise the engine that powers the Democratic Party. But you're right. "Austerity" is too obscure for most of them, so they will probably go with "poverty" instead. But since when is the Democratic propaganda machine concerned about being heavy-handed? If they can turn free condoms into the war on women, path to poverty is easy.

LawHawkRFD said...

tryanmax: We figured that out rather quickly. LOL

LawHawkRFD said...

tryanmax: I think the best way to describe desperate Democratic rhetoric these days is "manufactured hysteria."

T-Rav said...

I know how unlikely it is, but I would really like to see a landslide takeover in the Senate so shocking that Reid resigns his seat in humiliation. Yeah, yeah....but, I can dream.

LawHawkRFD said...

T-Rav: We've pulled off surprise margins before, so anything's possible. This is one of the reasons I keep telling people to quit looking for perfection and go for the most conservative candidate who is electable. Even RINOs count as "R'" when determining which party has the majority. Republicans only need 51 seats (well within the realm of possibility), and Reid's finished as majority leader. Of course, I'd like to see him really humiliated by a landslide, but I'll take what I can get.

LawHawkRFD said...

T-Rav: I could say you're a dreamer, but you're not the only one. LOL

Tehachapi Tom said...

Hawk
Liberalism as embraced by Reid and his fellow addicts is like drug addiction. It opposes common sense and is self destructive. If only the self destruction was totally on their backs as with druggies.
Reid is proof that the USC motto, "The cream always rises to the top", is in error

LawHawkRFD said...

Tehachapi Tom: It is very much like an addiction. The solution to too much government is more government. That makes no sense to normal people, but perfect sense to liberals.

rlaWTX said...

I've always wondered: is there a group that just sits around and thinks up the acronym-able bill names? Although, I think "DOPES" is inspired!

Have the DOPES said why they refused this bill? I truly don't understand their "thought" processes.

As for finding younger Senators in order to realize the positives of tech, if the younger ones were still knee-jerk "progressives", then age is irrelevant. It's not just age that makes them anti-tech, it's the inherent Dem idea that we require them to tell us what we may or may not, can or cannot, should or should not do.

LawHawkRFD said...

rlaWTX: As far as I can tell, their "thoughts" were concentrated on all those fat cat corporations that poured money into Obama's '08 campaign and who are now becoming somewhat mulish. While spouting populist nonsense about evil banks and evil Wall Street firms, the Democrats have taken huge sums of money from them. This Internet investment and jobs program would take business away from the old firms and redistribute them, freely, to new entrepeneurs. That upsets the "natural order" of big money/big government.

LawHawkRFD said...

rlaWTX: I didn't actually answer your question directly about their reasoning. So, here it is. The "people" need ever-growing protection [from themselves], and big government is just the entity to do it. Rather than allow free enterprise to be both free and innovative, the Democrats are still living in the 30s, using the government's cozy relationship with the old Wall Street firms and the SEC to squelch investment that doesn't profit the big firms which have supported Obama and the other Democrats. Even though a large percentage of these online investiment startups would likely be cutting edge tech and politically liberal, the Democrats simply don't want to take that chance.

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