That was the headline of a WSJ article today. It begins with the story of Invitrogen Corp. having spent $2.5 million and 10,000 man hours on SOX requirements.
Officials at the Carlsbad, Calif., biotechnology company think the costs are excessive. But they say Sarbanes-Oxley helped to spur other changes that made Invitrogen a better-run business.So, this is an article about the benefits of a policy whose costs exceeded its benefits. This made me think of other policies that could spur similar articles:
* The government requires all restaurant food to be tested for bacteria before being served to customers. "Incidences of Food Poisoning Reduced"
* The government lowers highway speed limits to 40 mph. "Fewer Deaths on Our Nation's Highways"**
* The government mandates blender blades be diamond-tipped. "Smoother Smoothies for Everyone!"
If positive, absolute benefits were the primary criteria by which laws should be passed, we'd end up with nominally more benefits, but with significantly less of the things that we could have had if our resources had been allocated elsewhere. (Sound familiar?) Unfortunately, newspapers can't write compelling stories about the things we don't have as a result of resources that were not devoted to them.
Congress, of course, counts on invisible opportunity costs staying that way. That's why they didn't simply mandate that companies put the proposed SOX rules up to a shareholder vote. They had neither the good will nor the good sense to do that. Letting people decide what to do, letting them weigh their interests for themselves, is not what lawmakers do.
** (HT: Larry Ribstein)