A Rush to Regulate

A Rush to Regulate

Wall Street had been rocked by a series of scandals. Investors had lost tens of billions. The national economy seemed at risk. Congress decided to act.

No, this isn’t the United States in 2010. It’s the United States in 2002.

Lawmakers were reacting to the collapse of companies such as Enron and WorldCom. They passed, with virtually no opposition, the Sarbanes-Oxley Act.

That law proved that Congress does two things well. 1) Nothing. 2) Over-react. Sarbanes-Oxley dealt with a problem that had, for the most part, already been solved by the financial markets. It also slapped massive new costs on American...