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Let’s be clear about the JOBS Act: it’s not about jobs unless you are an accountant or investment banker

Passage of the JOBS Act last week took me (and probably most Americans who normally follow such news) by surprise. Political experts gave the bill only a small likelihood of success only a short time ago. Yet it pushed its way through Congress and became law when Obama signed the bill last last week. Mainstream media covered the passage in the usual lighthearted manner without looking under the hood or asking any tough questions.

This explanation of the JOBS Act in a blog post is particularly insightful:

The JOBS Act is short for Jumpstart Our Business Start-Ups Act and it was billed as a way to get Americans back to work.. to create “jobs”.  It does nothing of the sort and everyone admits it now.

It was created by Obama’s Council on Jobs and Competitiveness, 27 members appointed by the White House, 2 are labor union presidents and 19 are CEOs of the largest corporations and hedge funds in America. See for yourself….

It’s not surprising that this crowd would just happen to come up with something that gives them the chance to put millions into their own pockets while erasing regulations put in place after the last tech bubble burst costing investors millions and millions of dollars needlessly. It’s also not surprising that this group would come up with a JOBS bill that does everything but create actual jobs.

The blog post is titled “Obama’s “Jobs” Act: Boon for Wall Street and Venture Capitalists … but … No Jobs for You” and is published in American Everyman

We should quickly point out this harsh criticism doesn’t mean that the new law is entirely bad. There will be some “good” and some startup businesses will benefit. The new law will help to partially address the credit crunch that is now crippling our economy. It is a phenomenal business booster for CPAs and investment advisers. Internet-savvy start-up companies and young MBAs  will love it. But let’s be clear – this is not about creating jobs and the primary benefit will be to already well-established individuals and companies in the financial services industry. It’s primary net long term effect (when we do the post-mortem exam of what went wrong a decade from now) will be to shift hard-earned money from middle class investors to the financial services industry, much the same as the subprime mortgage industry did in the last decade. Is this a risk worth taking in order to stimulate economic growth? Apparently some of America’s prominent business people think so but I suspect that an educated population would not agree.

Passage of this bill is a perfect example of the product of a political system where double speak and an end run around the legislative process is the most effective way for special interests to influence legislation.

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