Emmett Tyrrell
LONDON -- A couple of decades ago there appeared a new blossom in the moribund garden of liberalism called neoliberalism. Naturally with that ever-hopeful prefix, "neo," slapped onto it, the liberal faithful were aglow with anticipation of yet another glad and glorious morn. Happy days would be here again. We now know that those days never came. Neoliberalism was a bust mainly because there was not much new to it. Essentially it was the same old nanny state mentality motivated by envy and indignation.

One of the neoliberal's tenets was that white-collar criminals were getting off easy. That is to say white-collar criminals, for instance a corporate fraudster, were being treated much gentler than muggers, bank robbers and other violent criminals. It was a class thing or a racial thing. The neoliberal promised to end this injustice. Neoliberals were going to get tough with errant businessmen.

Well, the neoliberal blossom has wilted along with all the other varieties of liberalism. Its obsession with white collar criminals, however, has remained, much to the detriment of justice as a whole and of a vigorous entrepreneurship. To begin with, a white-collar criminal is profoundly different from a violent criminal. The first is a scoundrel. The second is a scoundrel and a menace to human life. Further, America has always been inhospitable to white-collar criminals and long before the rise of the neoliberal we have been locking them up. Two reasons that America has been a vibrant place to do business is America's rule of law and its relative freedom from corruption. Yet now America is losing its position as one of the most favorable countries in the world to do business. The reason is the government's obsession with white-collar crime as manifest by such inhibitors of business as the Sarbanes-Oxley Act.

The law was passed by congress as a typical overreaction to the white-collar criminals of the 1990s, most of whom were prosecuted and jugged without resort to Sarbanes-Oxley. It has always been illegal to defraud. What Sarbanes-Oxley has achieved is the stifling of honest business dealings. It has placed redundant accounting regulations on business and nearly criminalized serving on the board of directors, whether the board be that of a giant corporation or a local publicly traded plumbing company. The cost of Sarbanes-Oxley has driven IPOs abroad and persuaded entrepreneurs to forego IPOs entirely, denying them access to public capital, to growth and to job creation.

Emmett Tyrrell

R. Emmett Tyrrell Jr. is founder and editor in chief of The American Spectator and co-author of Madame Hillary: The Dark Road to the White House.
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