Jun 6, 2005
George Bush nominated Congressman Christopher Cox to replace William Donaldson as chairman of the Securities and Exchange Commission.
This has been portrayed as a move to take a more "hands-off" approach toward business.
David Chavern, director of corporate governance at the U.S. Chamber of Commerce, says, "When Mr. Donaldson came in, there was a need to restore investor confidence. It's a different environment now, and we have fundamental concerns about the competitiveness of U.S. capital markets and about regulatory overreach."Regulatory overreach? In recent years, we've seen companies collapse after overstating profits and running up huge debts. Major banks have helped companies to make their "cash flow" appear larger by carrying out complicated financial transactions. Major firms have been allowed to declare bankruptcy to get out of pension obligations only to quickly return to profitability later. The stock market bubble burst only to be followed by a new bubble. Real estate prices have ballooned in no relation to reality, as anyone who drives by all of the vacant strip malls can see. Everyone who has a 401(k) plan has seen their value plummet. All while the SEC watched.
It's hard to see how the SEC could now take a more "hands off" approach!