Senate Approves New Government Jobs Bill

July/19/2010 16:14PM
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With a vengeful country wanting to blame someone for the recession, our government jumped on the collective anger to pass a bill that will do absolutely nothing to prevent another financial meltdown. But, the 2,300 page bill will create thousands of new government jobs.

Remember the last time Americans got mad at corporate America. That time under the misguided stupitidy of one George W. Bush, they Congress passed another bill heralded as the end to corporate shenanigans. Just like Obama said today, ” the average American will never have to foot the bill for Wall Street.” That bill, passed in 2002, was Sarbanes-Oxley.

Here’s an update:
Section 404 is still consuming more than $2.3 million each year in direct compliance costs at the average company. The SEC’s survey shows the long-term burden on small companies is more than seven times that imposed on large firms relative to their assets. Are the internal controls audits helpful? Among companies of all sizes, only 19% say that the benefits of Section 404 outweigh the costs. More respondents say that it has reduced the efficiency of their operations than say it has improved them. More say that Section 404 has negatively affected the timeliness of their financial reporting than say it has enhanced it.

In the years since its passage, the country has experienced an historic drought of initial public offerings. Is Sarbox to blame? Many financial pundits say no, but the SEC survey results point in the other direction. When public companies are asked whether Section 404 has motivated them to consider going private, a full 70% of smaller firms say yes, and 44% of all public companies also say yes.

Has Sarbox driven businesses out of the country? Among foreign companies, a majority in the survey say that Section 404 has motivated them to consider de-listing from U.S. exchanges, and a staggering 77% of smaller foreign firms say that the law has motivated them to consider abandoning their American listings.

Despite an hour of research I can’t find the government budget for Sarbanes-Oxley. It seem to be blended into other budgets. But, rest assured it’s big.

The budget for Financial Reform is a couple of billion. Add that to Heath Care Reform, where 16,000 jobs will be added to the IRS and it’s bigger.

So Sarbanes-Oxley costs business billions and taxpayers billions and it did nothing to stop the housing mess.

The same will be true for this bill. It will drive businesses offshore and take jobs with it, it will add billions in cost that will be passed through to you, and it will not stop future problems. Since it didn’t’ address the real culprits, Freddie and Fannie Mae and the FHA, the same problems are still simmering in the housing markets.

Don’t you wonder at the stupidity of our government?

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