Strengthening American Enterprise

This morning Pech brought a Ben Stein essay to my attention. The economist and lawyer most famous for saying “Bueller…Bueller…” has several interesting things to say about the country’s direction, despite his position as a conservative and Bush supporter (and yes, we will be holding the latter against him.)

One especially relevant item decries the lax standards and weak penalties for corporate managers. I couldn’t agree more; have you heard anything about Enron indictments lately? (Or ever?)

The timing of the Stein piece is especially interesting given what Andrew Tobias has to say today. The investment guru quotes a forthcoming book when he says that since the 1939 establishment of the SEC [by liberals, natch] the volume of trading has increased to some 200,000% of its original level. Over the same time period, the staff increased by 72%.

Now that’s certainly not to say that we need x investigators for every y stock trades — computers and analysis tools are doing a lot of work. But this is an agency that nets money for the government, to the tune of five times its budget. It’s great to throw money into the general fund, but better still to use that money to do a better job for those who pay it in.

As Tobias rightly notes, the SEC’s budget must be increased, its staff enlarged, and its pay rates hiked. We must take these steps quickly to show that everyone’s investment is treated with equal respect in America’s capital markets lest we, as Stein puts it, “ruin American enterprise.”

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