George Will

WASHINGTON -- California Congressman Chris Cox, the president's nominee to be chairman of the Securities and Exchange Commission, would like to write a book giving Leibniz his due, at Newton's expense, for the invention of calculus. Could Cox really also be ``a devoted student of Ayn Rand''?

     She wrote fat and pitilessly didactic novels -- e.g., ``Atlas Shrugged'' and ``The Fountainhead'' -- celebrating severe individualism and unfettered capitalism. The third paragraph of The New York Times front-page story reporting Cox's nomination called him ``a devoted student'' of Rand.

     Cox, however, has never read a Rand novel. He sampled her work only when preparing, for the Times, a less-than-reverent review of a collection of her correspondence. Still, the ``devoted student'' description swiftly reverberated in the echo chamber of Washington journalism, where much of the reporting about Cox's nomination has had a cartoon-like quality.

     Now in his ninth term representing Orange County, Cox, who simultaneously  earned degrees from Harvard's law and business schools, worked in the legal counsel's office in the Reagan White House. The Washington Post's headline on his nomination said: ``Congressman Has Taken Pro-Business Stances on Issues.'' Who today, one wonders, is ``anti-business''? And what does that mean?

     A Times columnist disapprovingly said Cox ``is a big-business advocate.'' Leaving aside the vacuity of such labels -- what might it mean to be an ``advocate'' against ``big business'' and its big numbers of employees -- the ``big-business advocate'' obscures an interesting fact: Cox has been criticized by big-business interests because he opposed requiring employee stock options to be recorded on balance sheets as expenses.

     Why? Many small start-ups, such as high-tech ventures in the 1990s, with low or no initial profits, needed to attract talented executives without their compensation devouring the companies' earnings. So they offered stock options -- a bet by the executives on the companies' futures. To record these options as expenses involves putting a highly speculative future value on those options; that means putting a mushy number in the middle of companies' financial statements. Nevertheless, some envious big businesses, with price-earnings ratios much lower than those of the new companies, wanted to handicap the new companies by forcing the options to be recorded as expenses.

George Will

George F. Will is a 1976 Pulitzer Prize winner whose columns are syndicated in more than 400 magazines and newspapers worldwide.
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