Matt Tiabbi’s reaction to JOBS Act is simply baffling

Matt Tiabbi’s reasoning behind Why Obama’s JOBS Act Couldn’t Suck Worse seems to not much more substantive than the typical liberal knee-jerk reaction (horror) to deregulation. Not to say the conservative knee-jerk reaction (joy) is better. But I wish a pub like Rolling Stone would demand more then this from its published analysis.

From the article:

There’s just no benefit that the JOBS Act brings to an honest startup company.

For real style? Tiabbi bemoans that startups now:

  • Aren’t held liable when their PowerPoints don’t match their prospectuses, which are still mandatory and are available to any investor who wants to compare the PP to the prospectus.
  • Don’t have to spend hundreds of thousands of dollars registering with the SEC
  • Can raise money via crowdfunding

These sound like benefits to me.

And the harm?

A startup can’t be sued if its PowerPoint doesn’t match their prospectus. Market forces alone encourage potential investors to compare the two before making an investment.

Registering with the SEC is a waste of time and money. It’s a high barrier to entry which limits competition and halts innovation while providing absolutely no protection against fraud.

Crowdfunding is a huge deal. Think about what microlending has done for innovators and entrepreneurs the world over. Now think about the benefits of incentivizing microlending by making it potentially profitable, and not just charitable, to microlenders. What a way to encourage innovation and put people with no money but good ideas and the willingness to work hard on the path to prosperity.

Why take a dim view of the JOBS Act unless you want to discourage innovation and entrepreneurship while encourage red tape and bureaucracy?

Microlending photo by Whitney Lauren.

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