Legislation that was supposed to help smaller companies go public has aided larger firms to keep financial data out of the hands of investors.
The “Jumpstart Our Business Startups Act” (or JOBS Act) was promoted by President Barack Obama as a way to assist small businesses in their efforts to raise money through IPOs (stock market launches).
The same legislation, though, made it possible for larger companies (those earning less than $1 billion a year) to dodge reporting details about executive compensation and financial histories to the Securities and Exchange Commission.
Companies also can delay disclosing their plans to go public until just before the big day, under the JOBS Act.
“In effect, it means the press and potential investors have less time to comb through financial information, as well as less information to examine,” wrote James Temple in the San Francisco Chronicle.
The abuse of the law should not come as a surprise. At the time that the JOBS Act passed through Congress, Democratic Senator Carl Levin of Michigan warned, “We are about to embark upon the most sweeping deregulatory effort and assault on investor protection in decades.… It will allow vast new opportunities for fraud and abuse in capital markets.”
Meanwhile, the new law, which was adopted in April, hasn’t done much to boost the numbers for IPOs, according to Ernst & Young. This year, 130 companies raised $45 billion on U.S. exchanges, compared to 124 businesses and $40 billion in 2011.
The JOBS Act was the “brainchild” of the President’s Council on Jobs and Competitiveness, which is headed by General Electric CEO Jeffrey Immelt and, at the time the JOBS Act was proposed, consisted of 18 corporate CEOs and investment executives, two academics and two labor leaders.
December 16, 2012 Posted by aletho | "Hope and Change", Corruption, Economics | Chief executive officer, General Electric, Initial public offering, James Temple, Jeffrey R. Immelt, Obama | Leave a comment
Compensation for chief executives at American companies grew 15 percent in 2011 after a 28 percent rise in 2010, part of a larger trend that has seen CEO pay skyrocket over the last three decades. Workers, on the other hand, have been left behind.
Since 1978, CEO pay at American firms has risen 725 percent, more than 127 times faster than worker pay over the same time period, according to new data from the Economic Policy Institute:
From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.
In 1978, CEOs took home 26.5 times more than the average worker. They now make roughly 206 times more than workers, EPI found. The pay isn’t always tied to the performance of their businesses – as ThinkProgress has noted, CEOs at companies like Bank of America often pocket huge pay increases even as the company’s stock price plummets and jobs are cut.
As a result, American income inequality has skyrocketed, growing worse than it is in countries like Pakistan and Ivory Coast. Wealth inequality is worse than it was even in Ancient Rome. And, as pay skyrockets and tax rates fall for the richest Americans, the rising inequality has left the bottom 95 percent of Americans saddled with more debt than ever before. – thinkprogress.org
Workers’ wages aren’t tied to productivity either. Despite substantial gains in productivity since the 1970s, worker pay has remained flat. According to Labor Department data cited by the Huffington Post, inflation-adjusted wages fell 2 percent in 2011. – thinkprogress.org
Working and middle-class Americans have seen their debt balloon since the 1980s. Today, Americans owe some $704 billion in credit card debt, and more than that in both auto loans and student borrowing. CNN
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From the Archives
Allies in the Medieval-Modern Struggle
By Harry Clark | Dissident Voice | March 15, 2014
In his farewell address in 1796, George Washington warned the nation he had served as its first president against a “passionate attachment” or “inveterate hatred” toward any nation. Some Americans were impassioned about revolutionary France. Within a few years, agents of foreign minister Talleyrand would boast to American diplomats of French power within the United States, and demand large bribes and loans to advance relations. The correspondence was eventually published in the US, in the XYZ Affair, which embarrassed France and the French party in the US, and incited US opinion against France. The rupture was not permanent, and relations eventually resumed on dispassionate terms, to the benefit of both countries.
Since the 1992 publication of The Passionate Attachment: America’s Involvement With Israel, 1947 to the Present, by George W. Ball, undersecretary of state for Presidents Kennedy and Johnson, and his son Douglas B. Ball, Washington’s prescient term has become ubiquitous to describe the US-Israel relationship. No agents of Israel have ever been embarrassed by boasting of Israel’s power in the US, or by demanding loans and aid. The protestations of American diplomats at Israel’s aggrandizement and damage to US interests have embarrassed them, not the pro-Israel party, which has gone from strength to strength until quite recently.
This has produced a loose establishment diaspora of US diplomats, military and intelligence officers, politicians, academics and journalists critical of the US-Israel relationship, in Washington and elsewhere. … continue
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