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Administration Proudly Announces They Initially Proposed JOBS Act Deregulation Bill

I had a little Twitter spat with Zandar today after he responded to a tweet I wrote about the STOCK Act with a rejoinder that I probably thought it was “Obama’s fault.” Zandar has adopted this Sixth Sense, “I see Obama critics, they’re everywhere” mentality of late, extending even to bashing Jon Chait, one of the most renown Obama defenders in America. I never ascribed the STOCK Act disappointment to the President so I wondered what he was talking about. And we were off.

This was a mostly civil debate, which ended with Zandar saying that Obama is responsible for the actions of his cabinet and executive branch agencies, but “He’s just not responsible for the actions of the judicial and legislative branches, nor the other 310 million of us.” Which is a fine comment to make. But of course a President is the head of his political party, with more than a passing interest in legislation on Capitol Hill. In fact, he often proposes such legislation. So while I don’t think the White House had much to do with the STOCK Act issue, Press Secretary Jay Carney just released a statement taking full credit for the JOBS Act, the financial deregulation bill:

The President is grateful that the Senate acted in a bipartisan way to move forward key ideas the President proposed last fall that will help our small businesses and startups access capital they need to grow and create jobs.  We are heartened by the important investor protections added to the crowdfunding provision and will be vigilant in monitoring this and other elements to ensure the overall bill achieves its goal of helping entrepreneurs while maintaining protections for investors. We urge the House to adopt these important changes.

So when people call the JOBS Act the Jumpstart Obama’s Bucket Shops Act, it should have the context that the Administration proposed and pushed for this exact bill. And let it be known that, despite the investor protections added to the crowdfunding portion of the bill, which most analysts generally support, this is still a terrible bill without a constituency or a compelling public policy reason. Here’s Lisa Donner from Americans for Financial Reform:

We are deeply disappointed by the Senate passage of the so called “JOBS Act.” With the country still suffering from high unemployment and hard times in the wake of the financial crisis, it is almost unbelievable that the Senate would rush passage of measures that will undermine transparency and accountability in the capital markets, and expose our families to a new round of fraud and abuse.  But that is what they have done.

And Lisa Gilbert of Public Citizen’s Congress Watch Division:

The toxic JOBS Act has now passed through both the House and Senate. It is a huge and embarrassing failure of the Congress that a measure such as this could pass with such ease.

The underlying legislation opens the door to great risk of fraud, and will strip the accountability and sunshine requirements that make U.S. markets work better for shareholders and businesses.

And Sen. Bernie Sanders, who comes out and calls the legislation what it is, the Con-Job Act:

“At best, this bill could make it easier for con artists to defraud seniors out of their entire life savings by convincing them to invest in worthless companies. At worst, this bill has the potential to create the next Enron or Arthur Andersen scandal or an even worse financial crisis.

“Have we learned nothing? Deregulating Wall Street led to the worst financial crisis since the 1930s. Now the same people who caused this horrible recession are telling us that more Wall Street deregulation will create jobs. Give me a break. I strongly support providing small businesses with the tools they need to create jobs. Sadly, that’s not at all what this bill will do.”

As Sanders observes, the President’s own SEC Director opposed the bill, among a host of other public interest groups.

You’ll notice that the groups here aim their fire at Congress. And maybe the President isn’t responsible for every piece of legislation that moves through Capitol Hill. But the Press Secretary told you everything you need to know. The White House initially proposed the JOBS Act, and thinks that creating the conditions for Wall Street to rip off investors is a net job creator.

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David Dayen

David Dayen