Posted by on April 22, 2013
A little over a year ago, Congress passed the Jumpstart Our Business Startups (JOBS) Act. The JOBS Act was designed to make it easier for entrepreneurs to raise capital and turn their ideas into job-creating businesses that might one day go public. At a time of slow growth and high unemployment, the JOBS Act was a big win for the St. Louis region and the American economy.
Not only was the JOBS Act good policy — it also was an important bipartisan breakthrough at a time of heightened partisanship. During the Rose Garden signing ceremony, President Obama hailed the bill as a “potential game-changer” and noted that the JOBS Act “represents exactly the kind of bipartisan action we should be taking in Washington to help our economy.”
I couldn’t agree more with the president. But unfortunately, the gears of bureaucracy in Washington have kept the JOBS Act from being implemented. As entrepreneurs and investors in the St. Louis region sit and wait, the Securities and Exchange Commission (SEC) has failed to finalize key aspects of the JOBS Act.
Congress directed the SEC to write simple rules that would allow entrepreneurs to start raising capital, while also ensuring strong investor protections remain in place. But one year later, the SEC has missed important deadlines to finalize two of these rules, and there is little indication they are ready to implement other portions of the bill.
For example, one provision would make it easier for businesses to advertise investments in their company to potential investors. The SEC was required to issue a final rule for this provision by July 2012. However, nine months later the SEC has only gone so far as to issue a rule proposal, which is Washington’s way of saying “We’ll get back to you later.”
Another provision would create opportunities for startups to “crowdfund,” or pool small investments from a number of people who want to invest in companies they believe in. The SEC was required to finalize crowdfunding rules by December 2012, but again they have dragged their feet as startups and investors stand idle. It’s not as if these rulemakings are foreign to the SEC. In fact, writing rules that facilitate capital formation while maintaining investor protections is largely why the SEC exists. If the SEC is able to finalize rules dealing with “conflict minerals” in the Democratic Republic of the Congo (as they did in August 2012), there’s no reason why the JOBS Act should remain unfinished.
The St. Louis region stands to benefit from the JOBS Act in terms of jobs, growth and new innovations — but only if the Washington bureaucracy gets out of the way and lets American entrepreneurs do what they do best. The House Financial Services Committee, on which I serve, has made implementation of the JOBS Act a top priority for this Congress. The time for delays and excuses is over — the SEC must recognize that their inaction has real economic consequences.Ann Wagner is the Republican U.S. Representative from Missouri’s 2nd Congressional District.
Posted by on April 20, 2013
WSJ-MarketWatch: How Thatcher would have fixed the financial crisis
She ignored conventional wisdom, acted on her beliefs
UK Telegraph: The IMF is flunking the financial crisis
By turning its fire on Britain, the IMF gives the impression it is out of ideas and solutions
Financial Times: Wake up to the #Twitter effect on markets
Investors need to spend more time thinking about the way social media can affect financial markets
Reuters: New regulations require cleaner data
Continuing efforts by financial regulators and by firms themselves to monitor and offset risk have affected almost all areas of firms’ operations, including the management and maintenance of data. The overhaul of global systems following the financial crisis has led to an audit of data, and specifically of the information which firms hold about themselves and their counterparties or clients, known as business entity reference data.
It is time to close both Fannie Mae and Freddie Mac—the government-sponsored mortgage giants. Both entities distort the country’s housing finance market by issuing mortgage-backed securities with subsidized government guarantees that the mortgages will be repaid. If guarantees are necessary, they should be priced and issued by the private sector, not by the state. Financial institutions expert David C. John details specific steps to achieve this shutdown carefully and methodically without further upsetting the delicate housing market—and without making the situation worse.
Heritage: Promoting Economic Freedom Key to Realizing World Bank’s Mission
Posted by on April 12, 2013
Margaret Thatcher’s economic policies, we are often told, were cruel, harsh, immoral. In fact she was a deeply moral thinker, and the moral superiority of the free market was central to her thinking. She made the case for it like no other major political leader.
Washington Post: Is easy money creating a new wave of bubbles?
Trillions of new dollars, euros, yen and pounds are sloshing around the global financial system, a result of extraordinary efforts by the leading central banks over the last several years to try to yank their economies out of their long slump. And it has to go somewhere. Will that somewhere wind up being a new set of financial bubbles that pop and send us back where we started?
RealClearMarkets: President Obama Trumpets 'Financial Capability' While Undermining It
The President proclaimed April to be National Financial Capability Month, a new twist on what used to be called financial literacy month. Who can argue with wanting to make sure that people have "access to the information and tools that empower them to operate safely and smartly in the marketplace"? The strategy being employed to achieve this objective is the problem.
WSJ-MarketWatch: Getting used to a slow-growth future
Irrational exuberance is back. I know, I know. The Dow Jones Industrial Average just rose to yet another record close. Call it irrational, but exuberance is being handsomely rewarded in this market.
So far, Bitcoin is not a big deal. Its total value in circulation was $1.4 billion as of this week. That's equivalent to the currency stock of a small nation -- somewhere between Iceland and Uruguay -- and just one-thousandth of the total value of U.S. dollars in circulation.
Should the federal government break up America’s big banks? Once confined to the populist fringes of policy debate, the idea has developed surprising momentum in recent months, with a number of conservative voices jumping on the bank breakup bandwagon
Momentum to break up the nation’s largest banks is building quickly on Capitol Hill, just weeks after a unanimous, symbolic vote in the Senate to end taxpayer subsidies to Wall Street.
News from the housing market is finally positive: house prices are rising and the share of seriously delinquent loans is down. One major exception? FHA-guaranteed mortgages.
Posted by on April 01, 2013
Government backing for the Federal Housing Administration (FHA) gives it competitive advantages over private sector mortgage insurers, driving them out of the marketplace and leaving homebuyers with fewer choices, witnesses told the Financial Services Subcommittee on Housing and Insurance.
Wednesday’s hearing was the third in a series the Financial Services Committee is holding this year to examine the nation’s housing finance system. Committee Chairman Jeb Hensarling (R-TX) announced in January that the hearings will focus specifically on the financially troubled FHA and the need to create a sustainable and competitive housing finance system.
“Too Big to Fail”
Nearly three years after enactment of the Dodd-Frank Act, two powerful regulators created under the law are not fulfilling their missions and operate far from the public’s eye, according to a Government Accountability Office (GAO) report reviewed at a Financial Services Oversight and Investigations Subcommittee hearing.
Thursday’s hearing was the first in what will be an ongoing series of hearings this year that will examine Dodd-Frank, which enshrined “too big to fail” into law. Last week, Attorney General Eric Holder told the Senate Judiciary Committee he was “concerned” that prosecuting large financial firms would have a negative impact on the national economy. Financial Services Committee Chairman Jeb Hensarling (R-TX) and Subcommittee Chairman McHenry sent a letter to Attorney General Holder and Treasury Secretary Jacob Lew asking for documents and information the Obama Administration is relying on to determine which financial institutions it believes are “too big to fail” and, thus, “too big to jail.”
Last week Chairman Hensarling and Oversight & Investigations Subcommittee Chairman McHenry sent a letter to Attorney General Holder and Treasury Secretary Lew seeking any and all documents related to the consideration of economic factors in the decision to prosecute large banks for financial crimes. The committee's investigation comes out of Mr. Holder's recent comments at a Senate Judiciary Committee Hearing in which the Attorney General suggested some large financial instutitions are now "too big to jail."
Read the letter to Holder and Lew.
While the court ruled only on the NLRB appointments, Richard Cordray, the President's nominee to head the Consumer Financial Protection Bureau (CFPB), was appointed at the same time and in the same manner as the unconstitutional NLRB appointees. Chairman Hensarling anticipates that a federal court will soon reach a similar conclusion with respect to the validity of Mr. Cordray's appointment.
Given that the Dodd-Frank Act authorizes the Federal Reserve to fund CFPB only at the request of the CFPB's director, the circumstances under which funds were transfered from the Federal Reserve to the CFPB must be called into question.
Read Chairman Hensarling's letter to Chairman Bernanke questioning the circumstances under which the Federal Reserve may lawfully fund the CFPB's operations.