We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
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The consequences of legal bullying and bad rules Sometimes you see a set of numbers and they really make you sit up and gasp:
Last year, more than 350 companies went public in Europe, selling $86
billion of stock, according to data compiled by Bloomberg. In the U.S.,
235 companies raised $48 billion in IPOs. In 1999, 507 companies went
public in the U.S., selling a combined $63.93 billion of stock. Not one of the 10
largest stock issues of 2006 was listed in New York.
Nice work, Messrs Sarbanes, Oxley and Spitzer.
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No wonder NASDAQ wants a piece of LSE.
Can you link to the source please?
Simon, glad to oblige. I have done so.
As the newly-elected governor of New York, Mr. Spitzer will get the chance to explain to New Yorkers how Sarb-Ox will further benefit their city.
The figures may be meaningful. Or not.
Notice the average size didn’t vary much from EU to US. It would be more useful to see counts for family owned v. venture capital startups going public.
Family corporations have various motivations. Venture capitalists want the money.
Consider this: When you go public one reason may be you don’t think the future looks really great. You are bailing out, taking capital and putting it somewhere else. Maybe some in the EU think it time to split.
But that is mind-reading. Those in the financial markets want to be where the action is. And it doesn’t bode well for the NYC cash cow.
K, a fair point. If you read the Bloomberg article, it points out that regardless of where the actual listings occur, the banks like Morgan Stanley or G.Sachs collect fat fees for their work. The IPO exodus does, however, come at the expense of fees that would otherwise be earned by the various US exchanges. The money is migrating to London, Amsterdam, and elsewhere.
This may be a short-term thing. I would like to imagine that the authorities in the States realise the damage done by Soxley and the Spitzer terror, and rectify it. The loss of business has been rapid. Michael Bloomberg, who founded the news service that bears his name, realises this. One might hope he has impressed this fact upon his GOP colleagues.
The problem of course is that Congress, now dominated by a regulation-happy Democrat party, may not be prepared to make concessions. New York Democrats may realise, though, that shafting the cash cow of Wall St could hurt part of their own electorate in the East Coast.
For all the hoopla over the tyranny of the PATRIOT Act (which is quite heinous, I agree)…I personally believe that the McCain-Feingold act (campaign finance “reform”) was (and will be) a FAR greater blow to American liberty.
Sarbanes-Oxley is going to rank well up there, too. How does the saying go? Exceptional cases make bad law? That would seem to be appropriate for both acts.
The majority of well-intentioned and consciously law abiding people and companies will be further burdened by laws which will not likely “cure” the problem anyway.
I need to find a new America. This one is getting kind of used up, already. This planet is getting way too small.
Agreed on “campaign finance reform”. Even if one restricts the meaning of “free speech” to free “political” speech (thus, according to the courts, giving government the right to regulate ads for toothpaste and other such) elections are about as “political” as one can get.
If money for polticial ads and other such can be regulated by the government then the First Amendment has no meaning. And the fact that Senator McCain could not see this (in his desire to be “anti special interest”) is a bad sign.
Of course the Act has failed anyway – the recent midterm election was the most expensive in history, and the 2008 election will be the most expensivie election in history.
All the Act (like all the other capaign finance regulations) has meant is that getting the money is more complex, more underhand, and more expensive (one must spend money to get money).
As for financial regulations undermining private property and freedom of contract – the most disturbing element is how popular they are.
Mr Spitzer won about 70% of the vote to be the new Governor of New York State. His lawless (in the sense of the princples of law) antics made him very popular.
“But we have no idea if this contract is going to be hit by Spitzer or not” – does not matter, as long as you are bashing evil corporate America, this will be popular. This the Democrats in Congress know well.
Why do so many people have this attitude?
Well what is taught in schools and univerisities (government = public service, private enterprise = evil greed) is part of it – but so is the culture.
The vast majority of radio (and then television) shows, and Hollywood films have shown business in a bad light – and this has been true for more than 70 years.
That the films and so on are financed by corporations makes no difference – evil buinessmen is the main theme.
Newspapers (also owned by corporations) have become the same, as has so much else.
“But that is what the customers want”.
Is it?
Films and other such that show business in a positive light have tended to do well. But such things are not often made – key elite groups have decided that business bashing is the best way to change the culture and via the culture the economic system (a sort of reverse Marxism – “cultural superstructure” first, and “economic base” afterwards), and they have had a big impact over time.
Money is NOT what motivates these groups.