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Has the U.S. lost its edge in global markets because government went wild with regulation? Or, is it just Wall Street whining?

United States Treasury Secretary Henry M. Paulson listens to a question following his speech at the Confederation of British Industries annual conference, in London, Tuesday Nov. 28, 2006. (AP Photo/Lefteris Pitarakis)
Lefteris Pitarakis
United States Treasury Secretary Henry M. Paulson listens to a question following his speech at the Confederation of British Industries annual conference, in London, Tuesday Nov. 28, 2006. (AP Photo/Lefteris Pitarakis)

“Though everyone has to suffer because of abuses by a few bad apples, the regulations are necessary. After all, without them, what's to keep further abuses from reoccurring? I think Wall Street is complaining a little too loudly. After all, the American markets are still the most vibrant in the world. Money keeps flowing into our markets at a healthy clip. Besides, global competition is the future. The fact that our markets are held highly accountable, and still vibrant, will in the long run, always make us the market of first choice, for the greatest number of investors.” -- Gary L., Pennsylvania

I believe we have lost or edge in the global market. We are becoming as heavily regulated as Europe and we could learn a few things from Hong Kong.” -- Anthony R., Maryland

U.S. industry has lost its competitive edge? Is Microsoft fading away? Are the Chinese eating Russian soybeans? Is there anything, except cars and some electronics that we have to sell that the rest of the world does not want to buy? The problem is that capitalism, at least as practiced in the US, has become a valueless abstraction.”
Globalism has no home.”
-- Ron N., Virginia

The U.S. has lost some of its edge, but most of that loss is not due to Sarbanes-Oxley. What you never hear Wall Street admit is that its investment banking fees have gotten to be exorbitant. Do not underestimate this disincentive to list on the NYSE. Additionally, the issue cannot be discussed without the obvious acknowledgement that global growth is fueling foreign markets like never before. Attacking Sarbanes-Oxley is not only easy, but it is selfishly disingenuous and obfuscates one of the bigger reasons why U.S. markets are losing business to foreign markets.” --Larry G., Ohio

“In the case of regulation, less is more. Unfortunately lawmakers feel it is there God given duty to regulate everything. The problem arises when lawmakers allow their judgment to be guided by ego and not knowledge…. George H, Florida

“Regulations may need to be refined but we don’t want to allow a “Wild West” environment in our financial markets…. Continual reviewing of rules has been by history to preferable to no rules.” – James C. North Carolina

"Regulations are the biggest impediment to growth. It’s like traveling on a road with machine guns ready to fire. Even the most honest and good companies now fear being on the wrong side of the law, so they are going private or listing overseas. For companies with greedy and incompetent executives, shareholders (especially the institutional shareholders) need to take the lead and put pressure on the board to straighten them out." -- TK Biswas

"Regulations interfere with free market capitalism which, as CNBC's Larry Kudlow famously states, is 'the best path to prosperity.' The effects of the Sarbanes Oxley regulations is unattractive and has obviously been driving foreign companies to search for capital supplies elsewhere, like Hong Kong and London. Though regulations are definitely needed to ensure a safe market place, other interference's from the US government like taxes hold the US economy back from its true potential. With globalization rapidly growing, the United States needs to focus more on how to attract foreign investors and foreign companies to this Goldilocks economy, not driving them away with more and more un-needed regulations." -- Derek W.

"Wall street is whining but that doesn't mean regulations haven't gone too far." -- Douglas W.

"Regulations and accountability are needed. However, it would be a more level playing field if government officials were required to follow the same rules as public companies. How about passing a version of Sarbanes-Oxley for elected officials and hold them accountable for broken campaign promises with similar penalties and fines to offenders?" -- Richard T.

"This is Wall Street whining. I worked for a company that had been producing a product and not billing the customer for a year-and-a-half, Sarbanes-Oxley brought it to light. I am sure this is not the only company to have this type of experience. Wall Street has always had objection to regulation but fails to look for the benefits. Laws are not passed until there is some abuse." -- Bob K.

"In the case of regulation less is more. Unfortunately lawmakers feel it is there God given duty to regulate everything. The problem arises when lawmakers allow there judgement to be guided by ego and not knowledge, and when the golden goose is dead? Blame it on someone else." -- George H, Florida

"If corporate America wasn’t so full of unethical fat cats the government would not have to step in like it has with SOX and other regulations. If Wall street and the executive boards of US companies take issue they only need to look in the mirror to find the parties responsible. I prefer less government, but not more than I prefer to see another Enron or Worldcom where average Americans lose their life savings because of greed." -- D. Megan, Massachusetts

"The issue of regulation is mute in this case. The government via spending without tax consequences and excessive borrowing has encouraged questionable behavior. The current situation with 2nd rate lenders and an estimated 1.5 million foreclosures (ie bankruptcies this year) depicts just a few of the problems thrown on the government when the private sector fails to regulate their own. Other European countries as well as Japan do a better job than the US typically in these areas. It is very difficult to properly regulate and impose penalties with success. The real question is whether the free market and privatization in the US are willing to take responsibility before it is necessary for government regulators to intervene. The environment, community, employee relations are all areas that must continually be analyzed instead of embracing the cut and run opportunities of globalization or corporate excess, ie: Haliburton & Enron." -- Randy L.

more responses...

"Regulations are necessary. Too much regulation though slows down the US corporations’ reaction time to bring products and services to the market. It takes too much 'set-up' time to react on changes in the global market. We are at a disadvantage when competing at the Global Market since there are other countries that do not have as much regulations/requirements as we do." --John S

"Wall Street is just whining. Regulations are necessary because managers are either greedy or incompetent, such as Enron and Worldcom. Greedy such as Adelphia. We need to regulate public companies. If you can't stand the heat and can't afford the cost of regs then don't go public. There is enough private capital available if you have a really good company. There are also a lot of greedy and dishonest manager's out there so buyer beware in all situations - and double beware without regulations. The regs may need to be refined and improved but we need the regs." --Terrance B.

"There is really no debate, participants have already decided evidenced by 1) the number of companies choosing to go or remain private; and 2) the number of new companies choosing to list overseas." -- Tim F.

"The U.S. has run amok with regulation and Wall Street is whining for cause. It would be far better and more competitive environment with less regulation and far harsher penalties for criminal acts & financial crimes. I like the Chinese death penalty for large financial crimes & corruption, if we had a death penalty for financial crimes we could afford to relax reporting requirements, 'lie, cheat & steal and you might get executed' is a very effective regulator. You can bet Franklin Raines would have never allowed the books of FNM to be cooked if had he been subject to the death penalty." --Steve S., West Hills, CA

"Our leadership has given the guts of this country to the Chinese and until we remove one worlders from office it wont change." -- Jack T.

"The U.S. has lost its edge in several major global markets and will only get worse because of regulation. How can the U.S. compete with nations with little or no regulation and with nations who have such low wages? Most 'regulation' in general originally had good intentions but can not be advantageous to the long term health of the U.S. economy because of all the free trade agreements and little or no embargoes. The quality of life world wide will continue to slightly improve at the expense of many, many, lost U.S. businesses, industries, and wages." -- Steve M.

"No Sir, strong regulations are a benefit to us. Data reliability is important in the investment decision. Regulations enforce the credibility of the numbers and the quality of the reporting in our country. How many company reports of companies based in China can you believe? We have the benefit of standard accounting rules so that we can compare companies. We have strong government regulations and required reporting on Edgar so that not much can be hidden. And of course we have the requirements to be listed on our exchanges. Think of how many Enrons there would be without these strong regulations." -- Ed H., Tulsa, Oklahoma