The NYT's culture war against de-regulation

I recently wrote about a Saturday NYT article criticizing moves to scale back post-Enron regulatory excesses in the wake of indications that the U.S. is losing international securities business. I failed to note an interesting quote in that article from Duke's Jim Cox: "This is an escalation of the culture war against regulation.”

This was picked up by the Law Blog, together with a quote from a Sunday NYT Ben Stein column on the Committee on Capital Markets Regulation (discussed here):

is it really right for prominent American executives, amid a host of scandals involving other executives looting their shareholders blind, to have the best and the brightest of academe and the Street lobbying for less accountability to shareholders?

Stein (who is, by the way, an idiot) says, among other things, that the proposal to eliminate the private action "would be a bad joke." His evidence against deregulation?

The S.E.C., for example, has taken almost no action on “spring loading,” a particularly nasty form of insider trading and something like backdating, as reported passionately in this newspaper by Floyd Norris. If the S.E.C. cannot see spring loading as worthy of censure, why even have the S.E.C.?) They are going to try to shut down some future Eliot Spitzer, the only man in the country with the guts to take on even the most ornery Wall Street potentates. I shudder to think what else they are going to try to do.

Here's some actual analysis on "spring loading" -- clearly not a "particularly nasty form of insider trading." As for Eliot Spitzer, it's sad when even a journalist can't distinguish guts from political opportunism.

There are better arguments against deregulating, though they don't persuade me. But two things are clear:

First, it's not a "culture war," unless one wants also to describe SOX as a "culture war" against business, or the NYT articles as a culture war against de-regulation. I'd prefer to see it as a legitimate debate over the proper scope of regulation.  Jim Cox, for example, is providing helpful data, and he paid a delightful and informative visit recently to the U of I Corporate Colloquium. But there is another side.

Second, if you want to avoid learning about the issues, and would rather comfort yourself that your prejudices about business are correct, read the NYT.

In any event, the NYT articles indicate the tone and level of the coming journalist battle to save SOX and related regulation.

Comments

[save_the_rustbelt]

Apparently some of the options manipulation was really aimed at tax evasion.

But boys will be boys.

If Wall Streeters and corporate offices can't steal us blind, how will the poor dears afford the place at the Hamptons?

If there is regulatory excess then the Streeters and executives need to look into the mirror. They caused it by their blatant dishonesty.

[Robert Schwartz]

"Apparently some of the options manipulation was really aimed at tax evasion."

Yes, a very clever scheme to increase the amount of ordinary income recieved by the executives.