JOBS Act: Lots of Financial Deregulation, Few Jobs

A blog about business and economics.
Aug. 8 2013 11:31 AM

JOBS Act Creating More Unregulated Financial Entities Than American Jobs


Photo by Mike Ehrmann/Getty Images

It remains remarkable that one of the major legislative acts of the Obama years was a bipartisan bill to substantially reduce regulation of the financial sector, the absurdly-named Jumpstart Our Business Startups or JOBS Act. Get it, the acronym spells "JOBS"? So it must be good, right?

Well, it definitely contains some provisions I could get behind. But then you have Third Point Reinsurance, a company based in Bermuda with no American employees whatsoever that is taking advantage of provisions of the law for companies with less than $1 billion in revenue "allowing reduced disclosure about executive pay and waiving requirements for auditors to attest to a company’s financial controls."


Probably nothing terrible will result from this. Probably. But you never know. Reinsurance is a weird business. The idea is that you provide insurance to insurance comapneis. So it's the kind of thing where even if your business is totally mismanaged, on any given day things will probably be fine. If your restaurant doesn't know how to cook tasty food, we'll find our right away. If your factory can't actually make cars, we'll find our right away. But the whole point of reinsurance is that it's about rare events so it could take a long time horizon for problems to emerge. It's long been a very stodgy industry as well, dominated by a couple of big firms like Swiss Re and Munich Re. But over the past few years several hedge funds have gotten into the business, and know Daniel Loeb is prepping an IPO for the one his hedge fund started. Creating a new netherworld of untested low-disclosure reinsurrance companies isn't exactly the job-creating crowdfunding nirvana we were promised. But make no mistake—this kind of broad financial deregulation was always at the core of why the bill had so much legislative momentum.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



The Irritating Confidante

John Dickerson on Ben Bradlee’s fascinating relationship with John F. Kennedy.

My Father Invented Social Networking at a Girls’ Reform School in the 1930s

Renée Zellweger’s New Face Is Too Real

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

The All The President’s Men Scene That Captured Ben Bradlee

Medical Examiner

Is It Better to Be a Hero Like Batman?

Or an altruist like Bruce Wayne?


Driving in Circles

The autonomous Google car may never actually happen.

The World’s Human Rights Violators Are Signatories on the World’s Human Rights Treaties

How Punctual Are Germans?

  News & Politics
Oct. 22 2014 12:44 AM We Need More Ben Bradlees His relationship with John F. Kennedy shows what’s missing from today’s Washington journalism.
Oct. 21 2014 5:57 PM Soda and Fries Have Lost Their Charm for Both Consumers and Investors
The Vault
Oct. 21 2014 2:23 PM A Data-Packed Map of American Immigration in 1903
  Double X
The XX Factor
Oct. 21 2014 3:03 PM Renée Zellweger’s New Face Is Too Real
  Slate Plus
Behind the Scenes
Oct. 21 2014 1:02 PM Where Are Slate Plus Members From? This Weird Cartogram Explains. A weird-looking cartogram of Slate Plus memberships by state.
Brow Beat
Oct. 21 2014 9:42 PM The All The President’s Men Scene That Perfectly Captured Ben Bradlee’s Genius
Oct. 21 2014 11:44 PM Driving in Circles The autonomous Google car may never actually happen.
  Health & Science
Climate Desk
Oct. 21 2014 11:53 AM Taking Research for Granted Texas Republican Lamar Smith continues his crusade against independence in science.
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.