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The financial-regulatory bill now before Congress is a fraud: Under cover of "reforming" Wall Street, it would inflict tremendous costs on Main Street.
All the fresh publicity about alleged dirty doings by Goldman Sachs, etc., is beside the point: Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has produced a bill that skips over the real issues to focus on a Democratic bugaboo — supposedly abusive lending.
Thus, Dodd's bill fails to end bailouts, as many have noted. Instead, it adds new restrictions on credit — which are likely to cost our economy tens of thousands of jobs a year.
Sadly, the job destruction doesn't end there. Former Clinton Treasury official Robert Litan and financial expert John Mauldin warn that Dodd's new restrictions on "angel investors" would dampen or even shut down that investment market.
An "angel investor" is a wealthy individual or small group that provides start-up capital for business ventures. The Dodd bill would require start-ups to file with the SEC before seeking "angel investments" and delay those investments while the SEC reviews the filing. The added legal and filing fees could raise the cost of starting a business by tens of thousands of dollars. It could also add another half-million jobs to the body count.
If the Dodd bill were to eliminate future financial crises and related bailouts, perhaps its high cost would be worth paying. But it instead ignores the causes of the crisis, in favor of an agenda that rewards the very regulators that failed us the last time.
It's a win for special interests, and a loss for job creation.