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While I agree that Sarbanes-Oxley Act is a tremendous burden on business, Enron was criminal fraud perpetrated by the company's executives and the accounting fi

by conover 17y ago

While I agree that Sarbanes-Oxley Act is a tremendous burden on business, Enron was criminal fraud perpetrated by the company's executives and the accounting firm that was supposed to be overseeing them. When a company fails transparently, it's typically not an overnight collapse that destroys the entire value of the company. I think the lesson here is to find a balance between the overreaction that is Sarbanes-Oxley and the criminal frauds that were Enron/Arthur-Anderdon, WorldCom, etc.

fnid 17y ago
I think that balance is prosecuting the fraudsters. There have always been laws against fraud. Locks keep out the honest people. The criminals are going to find ways around SOX too. I think the real solution here is to stop treating corporations like individuals. Stop allowing them to contribute to political campaigns. End soft money. The enron guys were in bed with washington. You have to end that kind of relationship to prevent the power shift that pushed the balance to the corporations.
- anamax 17y ago
  > I think the real solution here is to stop treating corporations like individuals. Stop allowing them to contribute to political campaigns. End soft money. The enron guys were in bed with washington. Campaign contributions are the weakest way that corps influence DC. Ending it won't matter in the slightest, and neither will public financing. The only way to keep corps from getting favors from DC is to make sure that DC doesn't have the ability to give favors. Regulatory capture is unavoidable.
  - fnid 17y ago
    I think preventing reciprocity for the behaviors that benefit corporations is a step in the right direction.
    - eru 17y ago
      Yes, even if it would be a small step.
    - anamax 17y ago
      Nope - it's a waste of time to even try. Your intent does not determine the effect of various measures. Regulatory capture does (at least in this domain).
gojomo 17y ago
The mere knowledge that Enron happened was enough for private actors to adjust their behavior, tilt a little more towards vigilance and skepticism, and thus prevent an exact repeat. Sarbanes-Oxley was superfluous grandstanding -- the ritual enactment of an attractive but false narrative where regulators rush in as saviors -- except too late, too costly, and wasting attention on the last problem (Enron) instead of the next (subprime/Fannie/overleveraged banks). The greatest favor the government could do would be adopt the discipline and restraint to say, "yes, sometimes markets blow up in new ways, but the lessons of the blow up may be enough for everyone to adapt and protect themselves -- new legislation isn't necessarily required by every boom-bust". (Unfortunately, the election/news political cycle makes this sort of calm, measured response almost impossible.)

by conover 17y ago

fnid 17y ago

I think that balance is prosecuting the fraudsters. There have always been laws against fraud. Locks keep out the honest people. The criminals are going to find ways around SOX too. I think the real solution here is to stop treating corporations like individuals. Stop allowing them to contribute to political campaigns. End soft money. The enron guys were in bed with washington. You have to end that kind of relationship to prevent the power shift that pushed the balance to the corporations.

anamax 17y ago
> I think the real solution here is to stop treating corporations like individuals. Stop allowing them to contribute to political campaigns. End soft money. The enron guys were in bed with washington. Campaign contributions are the weakest way that corps influence DC. Ending it won't matter in the slightest, and neither will public financing. The only way to keep corps from getting favors from DC is to make sure that DC doesn't have the ability to give favors. Regulatory capture is unavoidable.
- fnid 17y ago
  I think preventing reciprocity for the behaviors that benefit corporations is a step in the right direction.
  - eru 17y ago
    Yes, even if it would be a small step.
  - anamax 17y ago
    Nope - it's a waste of time to even try. Your intent does not determine the effect of various measures. Regulatory capture does (at least in this domain).

gojomo 17y ago

The mere knowledge that Enron happened was enough for private actors to adjust their behavior, tilt a little more towards vigilance and skepticism, and thus prevent an exact repeat. Sarbanes-Oxley was superfluous grandstanding -- the ritual enactment of an attractive but false narrative where regulators rush in as saviors -- except too late, too costly, and wasting attention on the last problem (Enron) instead of the next (subprime/Fannie/overleveraged banks). The greatest favor the government could do would be adopt the discipline and restraint to say, "yes, sometimes markets blow up in new ways, but the lessons of the blow up may be enough for everyone to adapt and protect themselves -- new legislation isn't necessarily required by every boom-bust". (Unfortunately, the election/news political cycle makes this sort of calm, measured response almost impossible.)