Categories
free trade & free markets national politics & policies too much government

Don’t Kill The Angels

President Obama is blasting what he calls “the furious efforts of industry lobbyists” to fend off tighter regulation of the financial industry.

Pretending that Fed credit expansion and governmental incentives to take on temporarily cheap mortgages had no part in the current crisis, officials carefully direct our attention elsewhere. Widespread moral hazard stemming from bailouts, both guaranteed and implied? Shhhh.

But the government, uninterested in regulating itself and its own excesses, is instead targeting you and me.

“Tighter regulation” means less freedom to make your own decisions about your own time and resources.

Venture Beat magazine reports on a provision of Senator Chris Dodd’s proposed reform that would make it much harder for so-​called “angel” investors to fund new start-ups. 

An angel investor is somebody willing to fund a new business with his own wealth, even when venture capitalists managing others people’s funds decline to invest. Dodd’s bill would force start-​ups raising funds to register with the SEC and wait 120 days for the filing to be processed. It would also increase the minimum capital that “accredited investors” must have in the bank before the government will permit them to invest.

Based on nobody’s considered judgment about a particular venture but only on lawmakers’ nebulous fear of entrepreneurial risk, the proposed law would kill in the crib many pioneering and timely, must-​act-​now innovations. 

Accidentally, I’m sure, current businesses would be spared competition from upstarts.

And this is supposed to help the economy?

This is Common Sense. I’m Paul Jacob.

Categories
insider corruption national politics & policies

A Suicide-​Inducing Congress?

Say you are president. You thunder about how your predecessor’s bailouts let corporate execs keep big bonuses at taxpayer expense. That won’t happen on your watch!

And then it does. AIG bigwigs take $165 million.

So you are angry at yourself, for signing that stimulus bill with its specific language permitting TARP recipients to pay bonuses if bonuses were part of contracts made before February of ’09.

Maybe somebody should have read the legislation. So who has that job? Besides you … I mean the president himself. Why, Congress, of course!

Iowa Sen. Charles Grassley said he would at least “feel better” were AIG executives to apologize and then either “resign or go commit suicide.”

Connecticut Sen. Christopher Dodd and New York Sen. Chuck Schumer advocate passing a special tax to confiscate all the bonus money ex post facto. 

Dodd didn’t mention that he had authored the provision specifically permitting the AIG bonuses. He has now said he’ll return the $280,000 in donations he’s received from AIG executives. Schumer was mum about his $112,000 from those same execs.

Minnesota Sen. Amy Klobuchar said, “We’ve got to do whatever it takes to make sure people that basically ripped off the American people weren’t able to profit from it.”

So is she talking about AIG … or Congress?

This is Common Sense. I’m Paul Jacob.