June 02, 2005

Who is this Cox guy anyway?

Dubya has nominated Chris Cox to head the US Securities and Exchange Commission, the federal agency that regulates the securities industry (stock markets, stock brokers, and the like). Dubya says Cox is 1a champion of the free enterprise system in Congress' who will be 'an outstanding leader of the SEC.'

Dubya's praise should send up warning signs and, sure enough, they're so plain that even the AP caught one of them:

He ... is a longtime advocate of repealing taxes on capital gains as well as on dividends.

What that means is that Cox thinks it's great that all of us wage earners have to pay taxes on what we earn, but that people and corporations who make big bucks from holding and trading stocks and securities shouldn't have to worry about such mundane responsibilities as paying taxes.

The AP, of course, qualifies this item by sticking this just ahead of it:

Cox supported the Sarbanes-Oxley Act of 2002, Congress' response to financial scandals at Enron Corp., WorldCom Inc. and other large companies. The law ordered the most far-reaching changes in corporate accountability since the Depression, imposing stiff new rules on companies and their top executives.

So Cox will be tough on corporations, right? Well, maybe not. When he was in Congress, Cox was a primary sponsor of the Private Securities Litigation Reform Act of 1975 which ... well, let's let a LA Times op-ed piece from 2002 explain it:

The Private Securities Litigation Reform Act might more accurately be labeled the ?Corporate License to Steal Act.? Approved by just two votes over a presidential veto, the law was written largely by and for powerful corporate interests. It gutted historic safeguards against fraud and weakened those protecting investors. It set up legal obstacles that may have enabled Enron to hide its questionable accounting practices. Under the law, victims must prove a fraud in detail without access to evidentiary documents. Damages are limited. Those collaterally responsible for a fraud like, perhaps, an accounting firm, are protected from liability.

That's right. Cox was the guy that was so enamored of the notion of freeing corporations from restrictive government rules that he helped create the regulatory environment that led to the biggest corporate frauds in recent US history. We know it's a cliché, but isn't appointing Cox to head the SEC just a wee bit like appointing the fox to run the henhouse?

But then that's undoubtedly the reason why Dubya made the appointment in the first place.

Via Think Progress.

Posted by Magpie at June 2, 2005 01:43 PM | US Politics | TrackBack(1) | Technorati links |

I wrote about this subject myself today in my own blog. Bush's nomination of somelike like Cox reflects Bush's hostility to the reforms advocated by the current SEC chairman, which in turn reflects both Bush's own history as an inside trader and the fact that he simply supports the idea of his rich friends being able to use the system to make themselves richer.

Posted by: The Haikuist at June 2, 2005 02:04 PM