Friday, December 22, 2006

Steffy on Sarbanes-Oxley Again

Once again, the Houston Chronicle's Loren Steffy writes on a topic that he obviously knows nothing about - the SOx regulations that are, indeed, stifling businesses of all sizes. What he fails to recognize is the business is good right now, SOx or no SOx. That businesses are making money right now does not correlate the the detrimental effect of SOx. In other words, we are making money despite SOx. Productivity is being sapped by the wave after wave of external, internal and corporate audits, all to comply with the nebulous SOx regulations. The effect are seen in the number of companies that are going private or moving their stock offerings to the UK or Singapore. In the medium-to-long run, there will be an effect on American industry as the ratio of overseers to workers increases.

A similar economic effect is seen with income tax compliance. Surely, no one would argue that the income tax regulations aren't onerous and sap national productivity. And yet, American income is at an all time high. In Steffy's world, the application of more tax law would prevent income growth when in the real world, more regulation prevents even more productivity from working its way through the economy. That is the situation with SOx. Imagine what corporations could do with the lost hours spent with 20-year-old kids who never had to make it in the real business world.

Once again, I call for Loren Steffy and the Houston Chronicle to be subject to the same auditing that I get every month. Then we will see if his productivity is the same.


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