given the state of the economy and relatively robust corporate profits, shouldn’t the stock market be higher?
yes, according to the lobbying group the national center for policy analysis. what’s the cause? the group says, “one factor may be the sarbanes-oxley legislation, enacted in 2002 as a knee-jerk reaction.”
some estimates put the cost at about $15 billion per year, or about $1 million per $1 billion of sales. two university of illinois accounting professors estimated last year that companies had spent 120 million hours complying with sarbanes-oxley and that outside auditors had spent another 12 million hours, for a total of 132 million hours., or 66,000 people working for one year on nothing else. economist ivy zhang found that passage of the bill wiped out $1 trillion of market capitalization. moreover, zhang found no economic benefits to the legislation whatsoever, a view echoed by ucla securities law professor stephen bainbridge. columnist robert novak reports that bush administration officials are well aware of the negative effects of sarbanes-oxley on the economy and the stock market.
more at…
http://www.ncpa.org/edo/bb/2005/20050810bb.htm
for zhang text…
http://www.aei.brookings.org/admin/authorpdfs/page.php?id=1154
for bainbridge text…
http://www.techcentralstation.com/010804b.html
for novak text…
http://www.townhall.com/columnists/robertnovak/rn20050407.shtml