We all know the story, an old-line U.S. industry, burdened by high wages and outmoded business practices, starts to lose out to foreign competition. Instead of bringing their pay more in line with world standards, they go running to the government for help. Yep, that's the best way to describe the financial industry's efforts to roll back Sarbanes-Oxley and change other rules of corporate governance. Rather than cutting back the multi-hundred million dollar compensation packages paid to people like current Treasury Secretary Henry Paulsen and former Treasury Secretary Robert Rubin, they want to scale back the protections that make it more difficult for corporate management to rip off shareholders. Since management decides which capital markets to use, this is one way to gain a competitive edge. Given who holds the positions of power in the U.S. government, there is a good chance they will succeed. The conflicts of interest in this story are glaring and should be highlighted in the reporting.
--Dean Baker
