It’s not easy to get a legislator to admit that he or she made a mistake, but former Ohio Rep. Mike Oxley finally gets around to it:
“No law is perfect.” True words. But not exactly what I expected to hear from Mike Oxley, the former Republican congressman who penned the Sarbanes-Oxley legislation with former senator Paul Sarbanes, a Democrat. A decade after enactment of the eponymous regulation, created in response to the Enron and WorldCom scandals, Oxley came on Squawk Box to reflect on its effectiveness. His surprising regret? “I would have initially had more of a scaled-down provision that would have treated smaller companies different from the larger, Fortune 500 companies.”
Sarbanes-Oxley was and is one of my least favourite pieces of legislation, as I noted in my (originally) 2005 piece A Punch in the Face for Capitalism. But why, after all of these years, does it finally dawn on its author that small businesses got the shaft with this?
It always amazes me that Congress–the opposite of progress–never has enough regard for the simple fact that small businesses don’t “amortise” (to use the polite term) the cost of regulation as well as large ones do, the regulation being equal. But Congress goes on passing legislation like this, and our current Executive Branch, no fan of small business to say the least, is more than happy to accommodate and follow-up on such stupidity.
All large businesses started as small ones. That simple statement of the obvious, however, eludes those who own and operate our society, and who see small business people as power challengers. Laws like Sarbox, however, have and will over the long haul drain the dynamism that has characterised the economy of this Republic since its inception.