Anyway, Sarbox was exactly what any libertarian-minded accountant would have predicted back when Andersen fell: more government regulation that does more harm than good but is a BOON for accountants – and particularly, auditors (Big and small). Whaddayaknow? That’s exactly what happened. Now, audit firms – and particularly big four audit firms (like Deloitte and Ernst & Young) – actually charge more hours, make FEWER conclusions (b/c now the onus is supposed to be completely on the company to figure everything out without any help from those they’re paying $200+ an hour), and generally don’t work nearly as hard because the client has to all but diagram the paper trail for every g-d’ed journal entry they make. Trust me. It’s a nightmare (one I’m living). The system is worse off now because accountants who are worth a damn are saying “I’m not going to put up with this bulls–t” and finding better uses of their time. That is, unless they’re partners at these big firms making millions a year (the average salary for Ernst & Young’s 2,000 partners PRE-Sarbox was a cool half-million. Imagine what it is now – six years later).

Anyway, it’s no surprise what is happening and “plibbles” is as good a word for it as any. The reality is that the corporate paradigm is f–ked by nature of the gross disconnect between principle and agent. And no amount of regulation can make that risk go away, so why keep trying??

However, such an event is a slight misnomer, for the simple reason that stock brokerages generally pre-subscribe for all of the shares in an IPO (if it is a company that is worth the asking price or more), reserving them for their biggest clients, who then themselves resell the stock at a large markup on the open market, which the issuing company never sees. This is one of the dirty little secrets of the market that encourages the perpetuation of the “the rich are getting richer” anti-capital meme.

And that’s about the limit of any useful knowledge I might offer…

Hey! Smoke is rising from my head!

Oh, god! I’ve burned out my brain, trying to help Mrs. Solent!

Oh! It hurts—the pain! THE PAIN!!!

AAUUURghgUURHRHGU..1.1….curse you natilie solent….you made my brain hurt…..

Recent regulations (such S.O. as mentioned above) have done this again – so business that might have been done in New York is being done overseas. However, there are more regulations in Europe these days (with such things as the various financial services regulations and the new E.U. regulations) so business may not stay in the main European cities.

Even Switzerland has been pushed towards “insider trading” and “antitrust” regulations.

As for Mayor Bloomberg – his idea that paying for consultants can solve the problem is yet more evidence that being a good businessman does not make someone any good as a Mayor (or other political office) – the regulations need to be repealed (and tort law – which allows people to sue without there being any real malpractice – should be reformed).

Mayor Bloomberg’s first action was to massively increase tax on cigarettes – thus showing that he knew nothing about political economy (whatever he may know about the separate matter of running an individual business), he (without knowing it) boosted organized crime (by making their product cheaper compared with the legal product).

As for corporations and companies going private again: Americans tend to be deeply paranoid about corporations (every Hollywood film, ironically films made by corporations, and television show, ditto, tells them that corporations are the root of all evil) – contrary to what most Americans believe, the American government (at Federal and State level) taxes and regulates corporations more than most Western governments do.

“But corporations capture the regulators” – sometimes in the early stage yes. The corporations use the government regulations to sit on potential competitors – but over time the regulations increase and increase so that (in the end) even corporate special interests lose by them.