Newt Gingrich on Corporations
Former Republican Representative (GA-6) and Speaker of the House
The 2002 Sarbanes-Oxley Act, which added massive new reams of accounting red tape for businesses, has driven IPOs out of the US. Furthermore, the legislation is leading public companies to delist from the stock market in order to avoid red tape (and potential criminal penalties). The Sarbanes-Oxley Act effectively drives businesses to be LESS accountable than they were before and has done vastly more damage to the American economy than the corporate accounting scandals it was supposed to reform. It has had a substantial effect on New York as a financial center and has been a big asset for London. It is a wound inflicted by Congress on the American economy.
Gingrich pinpoints 5 enemies of entrepreneurship: bureaucracy, credentialing, taxation, litigation, and regulation. Any efforts to save the cities must start there. The bureaucracies stop welfare recipients from earning extra money. They stop enterprise by demanding credentials, and they create red tape that daunts most people. Individuals must be free to manage themselves.
It is here that Gingrich's arguments are the weakest, for many inner-city children aren't near the kinds of businesses that can provide even an entry to the work force. There is hope but no proof that reining in bureaucrats, reforming tax code, and cutting through red tape will be enough to spur development.
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