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Twenty-five years ago today five US senators sat across from three regulators with the Federal Home Loan Bank Board in a meeting that became a high-profile scandal within the broader Savings and Loan crisis. The five US senators were dubbed “the Keating Five,” named for Charles H. Keating Jr., a deep-pocketed campaign contributor and chairman of Lincoln Savings and Loan. The April 9th, 1987 meeting was called while Lincoln was being audited by the Federal Home Loan Bank Board under suspicion that it was obscuring insolvency caused by risky investments in violation of federal law. The Keating Five senators were later investigated by the Senate Ethics Committee and were found to have acted unethically for calling the meeting. Lincoln Savings and Loan collapsed two years after the meeting in 1989, costing the government $3 billion dollars and defrauding some 23,000 investors.

On Thursday, President Obama signed into law the Jumpstart Our Business Startups, or JOBS, Act. He called the effort, supported by House Majority Leader and Republican Eric Cantor, “[e]xactly the kind of bipartisan action we should be taking.” The JOBS Act was passed in late March, with votes of 380 to 41 in the House, and 73 to 26 in the Senate. It is also supported by a majority of the President’s 27 member Council on Jobs, which is stacked with 19 corporate executives. The main effect of the JOBS Act will be to remove regulations that govern how start-up companies can make their stock available to the public through the Initial Public Offering, or IPO, process. Economic and labor watchdogs are warning the bill will end up hurting investors and will generate few actual jobs. One of the most prominent and outspoken critics of the JOBS Act is economist William K. Black. Black was present at the infamous Keating Five meeting 25 years ago, and he served as a deputy staff director of the national commission that investigated the causes of the Savings and Loan crisis. He says the JOBS Act perpetuates the regulatory “race to the bottom.”

GUEST: William K. Black: Black is an associate professor of economics and law at the University of Missouri, Kansas City and the author of “The Best Way to Rob a Bank is to Own One.” He was the deputy staff director of the national commission that investigated the cause of the savings and loan debacle.