Economics and Social Policy XXVI

Welcome to the December 24, 2006 edition of Economics and Social Policy.

Hakim Abdullah presents Notes & Dialogue on Family and Liberty posted at Wa Salaam. It’s an interesting starter piece – the downside is that there isn’t a direct link back to the Redstate discussion, so the reader gets the sense of coming in on the middle of the conversation. I’d be interested in a piece where Mr. Adbullah fleshes out his perception of the Muslim view of liberty.

Murad Ali notes some important news items: NYSE and Euronext make Mega-Stock Exchange! and Port Needs Protection from Terrorist Attack: Imports Cost to Increase on The New Business World.

Tom Blumer Tackles SOC in Weekend Queston 4: Is Sarbanes-Oxley Unconstitutional? on BizzyBlog. Leon Gettler seems to agree in Is SOX unconstitutional? on Sox First, but is significantly less optimistic about the chances of the courts ruling against SOX.

SOX always seemed like an unneeded bit of legislation. After all, the Enron and Worldcom cases were prosecuted without the benefit of SOX. Fraud has always been illegal. Seems like we could have had some legislation that improved the transparency of financial reporting without placing a trillion dollar regulatory burden on the economy (for those of you keeping score at home, even in Washington, a trillion is considered a lot of money).

From a Congressional perspective, however, the trillion is a hidden cost, spread across many industries. It also has side benefits: additional complexity means more jobs and profitability for legal, accounting, and consulting firms. Complexity and money also bring out the lobbyists to work congress for exemptions, loopholes, etc., with resulting increase in cash flows to congressional re-election campaign funds.

Perhaps the biggest hidden cost is the diversion of thousands of very smart people into managing and consulting on regulatory compliance, rather than spending that brainpower of figuring out how to make their company’s services better, and cheaper.

In short, all this does is to increase government power, hamper the economy, increase costs for public companies, and drive business overseas. All without much benefit to the consumer, worker, or investor.

Plug: Get your “London & Hong Kong ‘heart’ SOX” bumper stickers here.

Brandon Peele presents The Economics of Self-Awareness posted at GT.

Riversider presents Riversway Riverworks Consultation - Ignoring the Questions That Most Concern Residents posted at Save The Ribble!. Here’s the wiki entry on the River Ribble. If you’re not from the U.K., you probably need the background.

Wenchypoo presents The Law of Unintended Consequences Part 1: Opposites Attract, The Law of Unintended Consequences Part 2: Red Tape and Loopholes, and The Law of Unintended Consequences Part 3: Something for Nothing posted at Mental Wastebasket.

Thanks for reading. Special for the December 31 Edition – Fearless Predictions for 2007! Sprain your forecasting brain and reveal your blog’s prognostications! Submit your article to Economics and Social Policy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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