Senate’s phony “JOBS Act” not about jobs, deregulates Wall Street

AFL-CIO president Richard Trumka came out with a blistering statement on the Senate’s passage of the so-called “JOBS Act” Mar. 22:

“The bill will do nothing to create good jobs and stabilize the U.S. economy. Instead, it will deregulate Wall Street – voiding investor protections put in place after Enron and the 2008 financial crisis to protect the retirement savings of America’s workers from fraud and other risks.”

The Senate passed the deregulation bill 73-26, despite testimony against it from financial market regulators, law professors, institutional investors and consumer advocates.

Last year, the Economic Policy Institute presented guidelines for evaluating a job-creation plan, which “should be measured against specific criteria.”

When examining a jobs-creation plan, the EPI says ask:

1. Will it make a real difference in job creation in the next 12 months?
2. Is it effective and efficient?
3. How is it funded?
4. Is it at the appropriate scale to produce a substantial number of jobs?

Not only does the bill just passed fail to meet these basic criteria, it follows dangerous examples that have already been discredited after doing damage in Canada and countries of the European Union.

Trumka warned that deregulation has terrible consequences for workers:

“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. The AFL-CIO calls on Congress to set aside the politics of the 1%, the old game of special favors for Wall Street, and turn to the business of real job creation. The labor movement strongly opposes the JOBS Act and any other effort to weaken the Dodd-Frank Act.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) was signed into law by President Obama on July 21, 2010.

The calculated cynicism of naming the deregulation bill a jobs act inspired Richard Eskow of the Campaign for America’s Future to blast it as the “dumbest ‘bipartisan’ move since repealing Glass-Steagall.” Glass Steagall was the 1933 bank reform act that was overturned in 1999 by an act cynically named the “Financial Services Modernization act” that, as Eskow pointed out, turned back the clock to 1929.

Simon Johnson, an MIT economist, was quoted on nasdaq.com as saying this on the JOBS Act, “Bipartisanship is greatly overrated. Whatever else it does, it’s not going to create jobs.”

Photo: Chicago 2011. People’s World photo.