January 14, 2005

Virginia Postrel

I hope y'all are reading Virginia Postrel's Dynamist Blog every day. Hers is a great example of a "long-tail" blog. Her posts are infrequent but very insightful. They probably lend themselves better to an RSS blog reading system than to daily visits.

She has been on a tear lately. If you haven't clicked in a bit I would go read her top seven posts. Two of them are on Sarbanes-Oxley. I think she has captured the Conservative Zeitgeist once again. Buyer's remorse of this high-intentioned but ill-thought bill is really starting to set in:

Taxes and spending get most of the attention, but regulations can be just as expensive and far more wasteful. Take the Sarbanes-Oxley bill, passed in the post-Enron panic as a demonstration that Congress and the administration cared and were doing something. Compliance costs a fortune, siphoning funds from productive investments (including hiring); that the law took effect in the middle of a recession didn't help the economic recovery. More significant is the long-term effect. The law threatens to block smaller firms from going public, cutting them off from a major source of capital. That effect will filter backward, making venture capital funding more difficult by eliminating one way VCs get their money out.

Indeed, this bill was cited as a contributing factor toward the US's drop out of the Top Ten Freest Nations, and the Wall Street Journal has highlighted how it scares good people off of corporate boards, where they could really help governance.

This is a bad bill, passed in haste, to prove Congress could "do something about Enron." Well, yes, we could shut down all Corporations, that's one way to cut corporate corruption...

Posted by jk at January 14, 2005 10:00 AM
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