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.