19 September 2011

A Cheap Way to Create Jobs - Subsidizing Sarbanes - Oxley for IPOs

In 1999, there were 486 Initial Public Offerings (IPOs) in the US and unemployment was 4.2 percent, the lowest it had been in 30 years.

In 2009, there were only 63 IPOs and unemployment had jumped to 10.1 by October of that year.

The drive to efficiency means that companies will always be shedding jobs and to counterbalance that, we need an equal number of new jobs created by expansion and start ups. We need IPOs.

One of the differences between 1999 and 2009 is the Sarbanes-Oxley Act of 2002, which added millions to the cost of an IPO.

I like the idea of regulations to make sure that investors have good information about companies, but it seems like we'd want to do all we could to encourage IPOs. Maybe the cost of Sarbanes-Oxley could be covered by the government for IPOs? For all the money we spend on supposed jobs creation plans, it is hard to think of one that would more directly fund job creation than making it cheaper for new companies to go public.

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