Did Government Regulation Kill Wall Street?

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Never ceases to amaze me how some of the wizards of smart these college professors and just their way of thinking. Today there was a article in the Wall Street Journal written by a professor. This guy’s name is Mark Rose, a professor at a Harvard Law School. And then there’s this guy, C .I. Wang. He’s a professor at Harvard Business School. And they’re talking about public companies.

and saying how public companies, companies that trade on stock exchanges are alive and well. Yeah, the ones that are out there, they’re alive and well. But they go back and they point out, and this is something that I’ve lamented for a very long time. There’s not that many anymore. You go back to the mid 1990s, right to the mid 1990s, and I was a kiddo.

There was a youngster on Wall Street at that point in time. I was there. I was there. Okay. I’m here to tell you. I’m here to tell you it was much better. Wall Street was a zillion times better back in the mid 1990s as it was today. First and foremost, the exchanges were nonprofits, which again, they should be. They’re an exchange. They should be almost like an umpire for crying out loud or a referee. Got away from that later on. But anyway,

You go back, you think and look at all the investment banks that existed at that point in time, the type of competition that took place, the ability for small businesses, small companies to go public and get financing. Did many of them go bust? Yeah. Yeah. Did many of them go bust? Sure, sure. That happens. But also, did many of them become some of the most successful companies that we know today? Yeah.

And guess what? Guess what? Did average investors, smaller investors, independent investors, were they able to get in on these companies at a very good level, a lower price? Yes. Today, not the case. There were 7 ,000 publicly traded companies back in 1996. We’ve got about 3 ,500 today. Yet these, again, professors from Harvard are telling you that…

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It’s better today than it was then. Jamie Dimon recently came out and lamented on the diminishing role of public companies in the American financial system. And again, this is a big fat old school watchdog on Wall Street. See, I told you so moment. George W. Bush’s reaction.

George W. Bush’s reaction, again, George W. Bush getting rolled when it came to what? The dot com collapse and some of the issues that took place was to pass this ridiculous piece of legislation called Sarbanes -Oxley. Sarbanes -Oxley made it that much more difficult for companies to go public. The regulations piled on. And that’s all we really seem to do here in this country is just pile on.

dumb regulation after dumb regulation, making things more difficult. Why would we do that? Why would we make things that more difficult? And yeah, their argument in this column is that US public companies profits accounted for 4 .5 % of GDP in 1996. That doubled to 8 .2 % in 2021.

But they’re making that as an argument that, okay, you know, the companies are more powerful. They’re bigger. Okay. I get all of that, but isn’t it better to have more? Isn’t it better to have more competition within an industry, greater innovation? to me, again, we’ve talked about this red tape nation.

all of the obstacles that are thrown up in people’s way. I even talked about it. I’m not a publicly traded company. But again, if I were to try to start my business today with the capital that I had back in the 1990s, wouldn’t be able to do it. We’d be able to. It’s just way too expensive. And you push people out. You want more participants in capitalism. You want as much competition as you can. And you also want you want it to be as accessible as possible.

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We’re told today that, well, look at you got free trade on Robin Hood and this and that. Yeah, that’s all well and good. And what happens is that people on Robin Hood, they end up buying into companies that have been laddered up by private equity for a decade or more. Where back in the nineties, they could have gotten involved in these companies at the ground level. Try to tell me that it’s better today than it was then. Come on, man. Watchdog on wallstreet .com.