A breezy new little book called "Size Matters: How Big Government Puts the Squeeze on America's Families, Finances and Freedom," by Joel Miller provides a great snapshot of what Americans should have in mind in the midst of the current wave of scandals in Washington and calls for lobbying reform.
The book is filled with anecdotes showing, clearly and simply, the inverse relationship in runaway growth in laws, regulations, and taxes _ allegedly passed for our benefit _ and the ability of businesses to grow and provide new and affordable products. Or in the ability of Americans to afford core necessities such as buying a home or saving for retirement.
Particularly timely, given the current environment in Washington, is Miller's discussion about the Sarbanes-Oxley Act of 2002, passed and signed into law in the wake of the Enron and WorldCom scandals.
Sarbanes-Oxley was another case in point that it is inconceivable to politicians that free people, when left alone, can simply learn from their mistakes. Those who commit crimes go to jail, and the rest of us, businesses and consumers, can read about what happened and avoid making similar mistakes (e.g., don't put your life savings into one stock). Change and improvement can take place cheaply and efficiently.
But, under such a scenario, how can our senator or congressman be a hero? No, they must pass new laws to demonstrate that they are indeed manning the ramparts, ready to deliver new solutions for making a better world.
Of course, this better world somehow always winds up with government even bigger than it was before, with new laws, regulations, and costs.
Miller points out that Sarbanes-Oxley will cost large firms about $5 million on average in new compliance costs, with auditing costs going up around 50 percent. Small firms are seeing their auditing costs doubling and tripling.
Furthermore, as result of this law, private firms are having second thoughts about going public and having to submit to the regulatory nightmare. As result of staying out of the capital markets, they forego new growth opportunities, which translates, for us simple folks, into jobs.