Would President Bush be such a big fan of Sarbanes if his own Oxley were being gored? Christopher Preble tests the theory.
New at Reason
Comments to "New at Reason":
Jason Ligon | July 15, 2005, 5:00pm | #
Mark my words, Sarbanes Oxley will be remembered in infamy. The costs of compliance are stratospheric and the benefits are almost nil. As benefits packages get cut and shaped in certain odd ways, no one on the outside will appreciate at first how much this asinine law is responsible.JMoore | July 15, 2005, 5:04pm | #
Totally agree, Jason. I think it will ultimately be more disastrous than anything from the New Deal.Although the idea of applying it to the president does have a certain appeal....
JMoore | July 15, 2005, 5:21pm | #
Oh, and I meant to say that, just as we often look on FDR with disgust, we may very well look back on GWB with even greater disgust, not for his foreign policies (I offer no opinion on that), but for SOX.It really is vile.
friendofliberty | July 15, 2005, 5:54pm | #
SOX sucks. Hopefully the SEC will take the teeth out of it through rule making and interpretation.metal, I have only luv fer 'Murika. Which is why I'm so sorry it has to suffer over-regoolashun from all them damn revenooers.
M1EK | July 15, 2005, 6:04pm | #
S-OX is the worst possible response to the Enronesque debacles of a few years ago except for doing nothing, which is apparently what the Reasonites would have preferred, despite the fact that it bankrupted many innocent people.Robber Barons Unite!
MyNameIsAsh | July 15, 2005, 6:06pm | #
Totally agree, Jason. I think it will ultimately be more disastrous than anything from the New Deal.Social Security is worse. You its easier for smart accounts to fool the government with fake paperwork than it is to quit paying entitlements to old people .
MyNameIsAsh | July 15, 2005, 6:07pm | #
Not that we should argue over which is worse since New Deal, SOX, not to mention the entire SEC are worthless.JMoore | July 15, 2005, 6:10pm | #
M1EK-I suspect others will be happy to correct you, so I won't bother, especially since I've already posted way to much to this thread. I will point out one reason, though, that SOX is so god-awful. It was passed as a result of the Politician's Syllogism, the logic of Congress. It goes something like this:
We must do something!
This is something.
Ergo, we must do this!
Ayn_Randian | July 15, 2005, 6:23pm | #
Ok, M1EK, I'll step to it...S-OX essentially demands of CEOs full and complete knowledge of every single aspect of accounting and revenues possible in a company. Most CEOs do not have advanced accounting degrees. Is it honestly fair to have corporations go the way of government, in that government is now run by lawyers because of the technical language of the law, and so corporations would all have to be run by professional, FBI-level accountants? I sure hope you don't use anything Ted Turner, Bill Gates, Henry Ford, ad nauseaum created, because those companies would probably have never existed under SOX.
Frankly, expecting a CEO to know everything about accounting so that he can catch someone with their hand in the cookie jar is like, well, expecting the President to know everything about the country of Iraq before invading it. It'd be nice, but it's not realistic, just like every other government regulation?
Am I the only one that was left wondering from the article if SOX should be supported so we can go after Bush with it?
SR | July 15, 2005, 6:34pm | #
"S-OX is the worst possible response to the Enronesque debacles of a few years ago except for doing nothing, which is apparently what the Reasonites would have preferred, despite the fact that it bankrupted many innocent people."Actually, I think many "Reasonites" would have supported doing something that would have a better effect on corporate accounting practices than SOX: lowering the tax rate on dividends to below the tax rate on stock sales. Taxing stock sales as capital gains at a maximum of 20%, while taxing dividends as income at a maximum of 39% creates a perverse incentive for accounting fraud, which can produce paper increases in stock prices but can't produce cold, hard cash for dividends.
JMoore | July 15, 2005, 6:38pm | #
OK, after this, I promise to shut up.M1EK, here's an analogy to think about. Imagine that you cut off your hand by accident. Imagine that you are, for whatever reason, unable to get any sort of medical treatment. But you do have a fifth of scotch. You now have two choices: do nothing except try to stop the bleeding, or drink the scotch because it will make you feel better. Of course, the alcohol will make you bleed more readily, which will kill you. Doing nothing is painful and you may even get an infection and die anyway...but it's still a better choice than getting drunk.
Enron hurt. But SOX is just scotch. It makes some people feel better because it's "doing something!", but it is nonetheless deadly.
Oh, and don't imply any equivalence between Enron & the robber barons. They all stayed in business and made lots of profits for themselves and thousands of others.
Johnny Clarke | July 15, 2005, 9:04pm | #
So, we're officially fascist now, correct? The government owns all property, controls all commerce, and dictates business practices.It's also militaristic, elevates the good of the state over the rights of the individual and is willing to deny equality to minority segments of the population.
Short of the whole "cult of the leader" bit (and maybe I just don't watch the news enough) I think that's a textbook definition of fascism.
kevrob | July 16, 2005, 12:03pm | #
Everyone noticed that Mr. Scrushy was acquitted, right?I was reading JMoore's hand-accident analogy and thinking, "Well, you could always use the booze to disinfect the wound, then cauterize the stump."
Does thinking outside the box like that mean I should go get my MBA? Speaking of which, skill at business does not necessarily transform into success as an executive in politics. Herbert Hoover was a famously talented exec, trained as an engineer, who had a few problems behind the USA's big desk.
Kevin
M1EK | July 18, 2005, 9:47am | #
"lowering the tax rate on dividends to below the tax rate on stock sales."GOSH, a TAX CUT? Who could ever have guessed?
Give me a fucking break. Come up with something that would have punished the evildoers at Enron and Worldcom and whatnot, or don't waste my time.
And "providing slightly less incentive to do evil" doesn't count.
Don Mynack | July 18, 2005, 11:40am | #
In addition to the Scrushy case, the gubernment is doing a great job screwing up the "slam-dunk" Enron broadband case by using fabricated evidence, inflating loss evaluations, and intimidating potential defense witnesses by telling them "they are the targets of an investigation". Check out this blog for a great rundown of what's going on with that case. http://blog.kir.com/archives/002184.asp