The Damage of Sarbanes-Oxley Regulation

Sarbanes-Oxley was passed in 2002, as a reaction to media-enhanced investor-debacles. The law of unintended consequences was the ultimate result.  Negatives by far outweigh any positives.

Sarbanes-Oxley has been a great profit center for accounting firms. It’s also a good talking and campaigning point for populist politicians, but an expensive headache for companies.

Lots of smaller corporations no longer seek public funds because it has become too expensive for them to be publicly owned. Audits are too expensive. That causes havoc among small business which cannot afford the added costs..

What’s more, the legislation helps little in preventing fraud, the intended purpose. Moreover, this keeps foreign corporations, even giants, out of the U.S. or has existing ones reconsider their American status.

If any corporate executive wants to commit fraud, Sarbanes-Oxley will not prevent collusion to do so. On the other hand, anyone with corporate experience (that leaves out most in Congress) knows that Sarbanes-Oxley makes running a business more like a steeplechase or handicap than it should be.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

What Are “Fair” Labor Wages?

A worker gets what he or she produces in a really “fair” productive society, Labor has to be productive. If it is not, there is an eventual economic disconnect.

An example is the downfall of the American automobile industry which priced itself out of business because of its labor costs. You can talk style and product non-competitiveness, But management was coerced into giving catastrophic labor contracts, in order to avoid immediate costly union walkouts.

The breakdown in schools can be attributed to the same cause. Here it is the avoidance of competition in the form of the public-school-only monopoly of unionized teachers. A choice of vouchers would make for better productivity of teachers, and better schools.

Unfortunately, labor unions and real wage conflict have grown into the American social and cultural contract. They have been highly politicized by union campaign funding, so it will be almost impossible to rectify in the foreseeable future. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

The Use of Patents

Patents are not only being issued for actual products and things, but for general ideas and business solutions. Or the method by which payments are made online.

Patents were originally intended for pure inventions. They contributed to the U.S. becoming the industrial leader of the world.

Courts have been evaluating cases in dispute, to see if clarification of patent law is necessary and whether interpretation of the law is to be more limited.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Inflated and Devalued College Grades

Inflated college marks are now the norm around the country. Pay the tuition and pass with flying colors.

What used to be called a Gentlemen’s C” grade for the class dummy is now the “Gentlemen’s A” for all.

It’s hard for today’s students to believe but the following is fact you will never, never get from a current college manual:

At the College of the City of New York during World War II, students were admitted only if they had the highest grades in New York City schools.

If they were getting war-service deferments because they were special science and engineering majors, they had many of their classes marked on a “curve.” This was comparable to having to make the cut in PGA professional golf. The lowest 10% or so of each class flunked, no matter what top mark they got. Classmates competed against each other.

In the toughest college in perhaps the U. S., open only to the best high school graduates, a student with one class “failure” immediately lost any armed service deferment.

Compare that to the Ivy League standards of today! Students go to Ivy League schools because of the aura about them, and the contacts they afford. The overrated Ivies are not tough. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Importance of Free U. S. Global Trade and Other Economic Lessons

Smoot-Hawley protectionist import duties in the U.S. set off the world-wide trade protectionism whereby industry was stifled and the 1930’s Great Depression became global.

That mistake, along with Franklin Roosevelt’s high taxation policy and government spending,  induced by pump-priming Keynesian philosophy, added to U.S. woes. It was a similar stimulus theory that the Administration is still advocating.

Never forget: We are primarily an export country. Playing games with protectionism to save a relatively small number of jobs, compared to the whole jobs picture, can be deadly. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Recession-Lost Jobs at Small Business

Small business accounts for more than half of our work force and is a solution to unemployment. Unfortunately, most bureaucrats and influential politicians are not in tune with small business interests. The heavy lobbying and influence comes from big business and labor unions.

Ever-higher minimum wages, hidden taxes and insurance costs will guarantee that small business can not fulfill its conventional role of creating new jobs. Unless Washington’s political elite relent.

It will take years for lost jobs to come back. In fact, many may never be available again. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

   

Deep Recessions are Government-Made

Economic cycles are normal, but excesses have man-made causes.

Folks are constantly misled on this subject by the media and politicians.

The current financial mess started as a result of a concerted government policy of making home mortgages available to those who could not afford to have those mortgages.

Government pressure, and threats of law suits from “do-gooders,” in addition to the opportunity for profit by banks, who collateralized the mortgage obligations (CDOs) facilitated the problem.

Government-licensed rating agencies gave these CDOs the AAA ratings that assured the global sale of the securities.

A bubble resulted from this man-made series of pressures, until, like all bubbles, it burst.

To add to the bad psychology that accompanies any bust, the government came in with a series of disastrous man-made steps.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)