Legalizing Local Investment
Picked up this post from Michael Shuman @ energybulletin.net where he points out another 99% that could use some attention: the 99% of Americans essentially prohibited from investing locally. Shuman points out that the House recently passed HR 2930 which promises to liberalize things a bit for the crowd-funding set and shares some links for those interested in showing support for the pending legislation. From Shuman:
If we could overhaul securities laws that we enacted during the early Jurassic Period, local businesses could be fabulous investments. They are the most important job producers in the economy. They account for more than half of private sector jobs. They are increasingly competitive—so much so that their their share of the national workforce actually growing. Stunningly, sole proprietorships are three times as profitable as C-corporations.
For the first time in decades, reform is finally possible. A remarkable coalition has emerged bringing together leaders of the Tea Party and the Obama Administration. They agree that investment apartheid should be abolished. Republican Representative Patrick McHenry of North Carolina is leading the charge in the House to legalize small businesses raising money through large numbers of small investments (aka “crowdfunding”), with minimal paperwork, for companies raising less than $1 million. Recent changes in his bill (HR 2930, The Entrepreneur Access to Capital Act) actually make it very similar to reforms President Obama proposed in his jobs package in September.
On November 3, HR 2930 passed the House with overwhelming support (407-17). But passage of crowdfunding legislation is still uncertain. Senate Republicans may be afraid to support anything that Obama has proposed as part of his jobs package. And many Democrats are defending the status quo, because they are understandably afraid of deregulating the financial industry. What Dems don’t appreciate, however, is that the key to Wall Street reform is to ratchet up regulation at the top and loosen things a bit for the 99% at the bottom.
The Occupy Wall Street protestors could make a critical difference here. They – and we – should occupy Congress until they legalize local investment. Once that occurs, we’ll see thousands of small companies owned by their customers. We’ll see the emergence of local stock exchanges that will provide investors with liquidity. We’ll see mutual funds with local securities (none exist today), and local pension funds.