And Speaking of Regulations....Businesses Just Want to Have Fun
It's amazing how their arguments are all the same, no matter what the crimes, or what the regulations. They just want to be left alone to rape and pillage.
Steven Pearlstein has an interesting column in the Washington Post today about business resistance to reform of accounting and corporate governance practices -- in the face of a new round of corporate indictments. It's interesting how similar their arguments are to their arguments against any kind of health adn safety or environmental regulations:
This is the same crowd, you'll remember, that once argued that the problem was only "a few bad apples." Now they are making the rounds in Washington peddling the nonsense that reform has gone too far, costs too much and even jeopardizes the risk-taking that gives the U.S. economy its competitive edge.And then there's the evil labor unions and other "public interests" who are seeking to undermine capitalism as we know it:
Let's start with the hokum about runaway compliance costs.
A survey by Financial Executive International found that the first-year costs to comply with new regulations ranged from roughly $280,000 for companies with up to $25 million in sales to $4.7 million for companies with more than $5 billion in revenue. By my calculation that works out to be somewhere between 0.1 percent and 1 percent of sales -- hardly an excessive fee for restoring investor confidence and reducing the cost of capital.
Much of the cost of compliance has to do with beefing up internal controls. Companies used to argue that they already had them. Now they argue that they are too expensive. It's hard to see how they could be both....
It is a tad disingenuous for corporate directors to say they knew nothing about the skulduggery that went on during their watch, as many have, and then turn around and argue there's no need for better internal controls.
Nothing has the corporate class more riled up, however, than the Securities and Exchange Commission's proposal to allow shareholders to nominate competing directors if more than 35 percent withhold their votes for the company slate. In lobbying against the idea, the Business Roundtable sheds crocodile tears over the erosion of states' rights and raises the specter that labor unions and other "narrow" interest groups will turn corporations away from their only legitimate purpose, which is to meet the next quarter's profit number. What the Business Roundtable really means, but doesn't have the guts to say, is that corporate democracy is a sham and if investors don't like the way a company is run, they can sell their shares and put their money elsewhere.