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The AFL-CIO has joined a growing chorus of voices opposed to the JOBS Act that passed the Senate on Thursday. President Richard Trumka said “We are disappointed and angry.” In a longer statement issued last week, he went into more detail about the bill:
America needs jobs. Yet Congress cannot enact such basic legislation as the reauthorization of the Surface Transportation Bill that would create hundreds of thousands of jobs. Instead, this week Congress once again is looking to deregulate Wall Street—this time in the form of the cynically named JOBS Act, which would weaken the ability of the Securities and Exchange Commission to regulate our capital markets and allow companies to sell stock to the public without providing three years of audited financial statements, without having adequate internal controls and without complying with key corporate governance reforms in the recently passed Dodd-Frank Act.
We still have millions of unemployed workers as a direct result of decades of financial deregulation. Workers’ pension funds have yet to recover from the effects of the last time we created a bubble in IPOs during the late 1990s. And yet members of both parties in Congress seem bent on repeating these experiences, even as congressional Republicans block any initiative that might really create jobs and set our economy toward the path of long-term prosperity.
In case our own ugly history with stock bubbles and financial fraud is not enough, Congress should heed the warnings from other developed countries that recently have experimented with deregulated securities markets. In the 1990s, Canadian regulators condemned the “continuing occurrence of shams, swindles and market manipulations” on the Vancouver Stock Exchange of loosely regulated small company stocks. More recently, the London Stock Exchange’s Alternative Investment Market has been described as a “casino” for its highly speculative small company stock listings.
Workers’ retirement savings will be in greater risk of fraud and speculation if securities market deregulation once again is railroaded through Congress. Once again our economy will be at risk from the folly of policymakers promoting financial bubbles and ignoring the needs of the real economy.
Supporters of the bill say it will create jobs, but experts say otherwise:
The package of bills awaiting Senate action after receiving broad bipartisan support in a House vote last week would destroy safeguards dating as far back as the laws that created the Securities and Exchange Commission, according to Lynn E. Turner, a former SEC chief accountant.
“It won’t create jobs, but it will simplify fraud,” Turner said in an interview last week. “This would be better known as the bucket-shop and penny-stock fraud reauthorization act of 2012,” he said, referring to practices banned under securities law.