Tuesday, March 13, 2007

Feeny Takes on Sarbanes-Oxley - Federal Aid Propping Up Old TVs?

Concerned that some consumers would not be able to obtain television signals after the 2009 analog cutoff, Congress in 2005 authorized up to $1.5 billion to subsidize the cost of converter boxes. In July 2006, the Commerce Department -- tasked with administering the program -- proposed that funding be limited to households without cable or satellite service. As specified by Congress, each eligible household would be eligible for up to two $40 coupons to put toward the purchase of converter boxes, which are expected to cost $50 to $75 in retail stores.
Very intriguing what your tax dollars can end up doing.

Tom Feeney testified for reforming Congress' overreaction to Enron (Sarbanes-Oxley legislation) with some interesting perspective.

Sarbanes-Oxley has been implemented in Section 404. Section 404, essentially, requires not just an internal audit but an external audit. And Section 404, as implemented, has not given us any bright-line suggestions about what are good accounting standards and what are bad accounting standards. We don't know what a de min­imis error is, so that some accountants, for example, have looked at the newspaper subscriptions for the officers in a $2 billion or $5 billion company. We're talking about $70 or $100 or $150 a year for newspa­pers in a $2 billion company, and that has generated reviews that will cost hundreds of thousands of dol­lars. Procurement decisions on a very minor level have triggered these things. Why is this?...We have one estimate of the total indirect costs of Sarbanes-Oxley at somewhere between $1.1 trillion and $1.4 trillion; the American Enterprise Institute printed a study done by some professors that wrote a book referring to this. If this particular economist is anywhere close to right, this amounts to about an 8 or 9 percent regulatory tax on every good and ser­vice produced in the American economy. It's an enormous self-inflicted wound in terms of the cost, and it was totally unanticipated.

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