Matt Taibbi, the prep-school boy wonder attacked the JOBS act
and demonstrated, yet again, that he knows nothing about finance and everything about producing incoherent indignation that his dim fans can use to fuel their anger against that "Dreadful Black Man who Betrayed Progressivism" ® . The key point of the JOBS act is that it permits small and start-up business to raise money without paying Wall Street a big fat commission. When a business "goes public" and gets listed on a stock market, there is a process called the "initial public offering" or IPO. The "underwriters" are the Wall Street operators like Goldman-Sachs and JP Morgan that parcel out the initial sale to the wider market and they get a fee that is generally around 6% of the initial offering price. Generally underwriters can make money both on the fee and on their ability to direct hot new shares to their favored customers at the initial price and by trading themselves. The fees alone are worth billions of dollars a year. The JOBS act relaxes the regulations that forced companies to go public when they got too big or had over a few hundred shareholders. For a good summary, take a look at this
blog. Basically Taibbi is complaining that the government is not going to force new companies to pay commissions to Wall Street. He's complaining that the economy is going to decentralize and the Internet is going to be used to decrease the advantages of Wall Street insiders.
Why is Taibbi complaining about fewer fees for Goldman-Sachs? Well, it's partly that he doesn't know what the hell he is talking about, partly that he has an act, and partly that he is a defender of The Good Old Days when WASP prep-school boys ran Wall Street in a
um, genteel way and we didn't have all these scruffy new people stepping on our weejuns in the Street. Back in the good old days, when Rockefeller protegee and Taibbi hero Paul Volcker ran the Federal Reserve Bank, the government was committed to strong dollar and tight Wall Street management of the economy and everyone knew their place. Under Volcker, unemployment doubled, US manufacturing collapsed, debts of working Americans spiraled up, Union membership crashed, interest rates went past 20%, and the third world was forced into a massive debt crisis that literally killed millions of people. And yet, Taibbi is there in Rolling Stone, selling Volcker as the hero of progressive America against this Obama guy. We live in a world where "Christian" moralists defend pissing on the poor and "leftwing" journalists advocate Wall Street commissions. Both agree, however, that Obama is the bad guy.