Obama, in a continued attempt to revive the job market,
signed a bill Thursday that rolls back restrictions on how new start-up
companies may raise initial capital. The
bill, part of Obama’s larger Jobs bill, allows for individuals to make small investments
in entrepreneurs via the internet. Obama
endorsed the bipartisan bill, citing how “new businesses generate almost every
new job in the United States”.
Critics of the bill claim that the law will “open the door
to investor fraud”; in response, Obama insisted that the SEC would provide
overriding regulation of such web sites, and that information availability in
our current day makes fraudulent schemes unlikely.
The bill has more serious political implications however. With the formal signing set to coincide with
the monthly employment report from the Labor department, which has become “an
important political barometer”, Obama hopes to make the most of a positive
upward trend in the job market. If the
numbers return strong, Obama will only strengthen his reelection chances.
What do you think? Is this a sound political move for Obama
and his reelection campaign, or is it simply too little too late, with the rest
of Obama’s Jobs bill still floundering in Congress?
3 comments:
As much as I like the idea of being able to directly invest money in entrepreneurs, I feel like it is risky for average Americans to take part in the investment market. Investment bankers are hired for their expertise in the market. I doubt that the average American will have a thorough grasp of risk assessment and other factors that investment bankers consider before investing sums of money into a start up company. However, I think the lifting of regulations is good for new companies and has a good chance to help the economy by providing more jobs. Moreover, I think less regulations and the capability of direct investments is a good way to instill more confidence in the consumer, which is very important for America's economy in order to rebound from the recession.
I think that it's a good move for his reelection on Obama's part, but I just don't know that it will actually have a big effect on his campaign. It may make him look a little better in that they make the bill sound great since it will create more start-up companies and thus more jobs. However, this seems a bit miniscule in relation to the rest of his Jobs bill that has been in the air for a long time now and seems to have little chance in getting through Congress.
In addition, it seems to me that this plan for promoting start up companies may not work very well. I have to agree with critics that this really opens the door to investor fraud. Even with the SEC oversight, I still think that people will find numerous ways around it and regulation will be unsuccessful in preventing fraud.
As much as I like the idea of being able to directly invest money in entrepreneurs, I feel like it is risky for average Americans to take part in the investment market. Investment bankers are hired for their expertise in the market. I doubt that the average American will have a thorough grasp of risk assessment and other factors that investment bankers consider before investing sums of money into a start up company. However, I think the lifting of regulations is good for new companies and has a good chance to help the economy by providing more jobs. Moreover, I think less regulations and the capability of direct investments is a good way to instill more confidence in the consumer, which is very important for America's economy in order to rebound from the recession.
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