A few weeks ago, Congress passed the JOBS Act and Obama signed it. The law declares Steve Jobs to be a saint, June 4th will be Steve Jobs Day (a national holiday), and everyone gets a free iPhone.

No, it’s something else. It’ll have a big impact on Silicon Valley, but oddly, there’s been very little talk about this.

The JOBS Act encourages small business growth by removing restrictions on investment. Previously, an investor had to be “accredited”, which meant $1m in assets or $200K in income. Now, anyone can invest up to 5% of their income. A video clerk can be an investor now. The crowdfunding sites (such as Kickstarter or Indiegogo) allow thousands of people to fund projects. Sounds good, right?

Here we go again. Remember when Al Gore said he invented the Internet? It wasn’t far off. I was working in a telecomms startup and we knew about this. Netscape IPOed in 1995. In 1996, President Clinton signed the Telecommunications Act. Those two events were the key to the dotcom boom. The telecomms act was part of the deregulation craze of the 80s and 90s: it got rid of rules and allowed anyone to get into telecomms. When Netscape raised $2.9b, hundreds of Wall Street investment bankers (IBs) dashed out to Silicon Valley to see how they could make money like that. The Telecomms Act allowed them to create companies such as Enron, WorldCom, and Tyco with outrageous lies about customer trends, revenues, and profits. Morgan Stanley, Goldman Sachs, Arthur Anderson, and others participated by touting (fake) companies. Investors were so eager to get rich like Netscape so they invested. That’s how President Clinton’s Telecomms Act created the Internet, or at least, the dotcom boom.

And that boom became the dotcom bubble, which popped in spring 2000, because the numbers were fake. Those dotcoms weren’t profitable, heck, many didn’t even have revenues. VCs created shell companies, IPOed them on Wall Street, and took money from investors. After the IPO, they walked away. Was the company sustainable? Could it actually make money? Who cared? Wall Street got rich. Hundreds of thousands of workers got screwed; five trillion dollars vanished.

Okay, write this in your diary: April 5th, 2012: Obama signs the JOBS Act. May 17th, 2012: Facebook IPOs for $100b. Circle these dates with red lipstick (may I suggest “Colour Riche”?) One day, you’ll show those diary pages to your grandkids as all of you huddle under a bridge.

Here’s what’s coming:

– FB’s $100b IPO will turn VCs and IBs into freaks to create more companies with billion-dollar valuations (such as Instagram, which has zero revenues).

– The JOBS Act removes onerous regulations that require startups to report actual numbers. No more independent auditors. Startups can say whatever they want. (BTW, my cat is building a startup in my Palo Alto garage: it’s amazing. Not even three weeks and the cat already has $4.2 billion in revenues. What a cat! You can buy pre-IPO shares.)

Remember the national craze over that $500m lottery a few weeks ago? We’re talking $100b. That’s 200X more than that lottery. There’s going to be traffic jams of Ferrari and Lamborghini in Palo Alto.

Yes, it’s a bubble. Yes, they’re doing it again. But don’t you want to get rich this time? Of course you do! Hurry and buy pre-IPO stock in my cat’s startup! OMG! Cat just made another billion! Freaking incredible! HURRY!