A Shill for Crowdfunding?

Robert Shiller, economics professor at Yale and co-founder of the S&P’s Case-Shiller Index, took to the airwaves on CNBC this morning to stump for crowdfunding. But Shiller—much like the legislation, which was touted out of the gate by venture capitalists—came up against some unexpectedly tough opposition (voices that echoed concerns like MIT economics professor Simon Johnson’s, who spoke with Connie Loizos for a Q&A yesterday).

Squawk Box co-host Andrew Ross Sorkin, who has previously been critical of the JOBS Act and the potential pitfalls it poses, told Shiller the newly-minted law could “lead to the recreation of old boiler rooms” that decimated investors nearly a century ago.

Shiller countered—noting that investors cannot sink their entire net worth into a single crowdfunding investment—but he didn’t exactly provide the kind of fodder VCs and the National Venture Capital Association were hoping to hear.

“The JOBS Act is an experiment,” Shiller acknowledged on the air. “It could be that it works out badly.”

While Sorkin and others questioned whether reducing disclosure was the optimal way to lure investors into private companies, Shiller said existing disclosure requirements would hamper startups, and that, aside from a recently robust pipeline, US equities investors have essentially been disenfranchised.

“I think we have to allow that,” Shiller said, of the reduced disclosures.