Fannie Mae and Sarbox are tiny, tiny pieces of their respective puzzles. Blowing them up because it's ideologically satisfying is thinking with your amygdala.
(BTW, the "big government / little government" argument exists entirely in the heads of the ideologically pure. The rest of us are more concerned with the "works / doesn't work" argument, on a case by case basis.)
I'm a near-statist liberal, so I'm pretty sure it doesn't just exist in the heads of comic book caricatures. I take your point about making scapegoats of things like SOX, but "unintended consequences" is part of the core narrative of regulation, even minor regulations (SOX isn't minor), and you're really not answering my question with this comment.
Do you think more companies should go public?
If not, do you think private companies should be forced to be more transparent? Why?
If so, do you not believe that it's become more expensive to be a public company in 2010 than it was in 1995?
I've stated my opinion several times now, and unfortunately it doesn't fit into those questions:
Sarbox's additional costs are a very small part of the equation compared to the fundamental difference between public/private, not to mention all of the costs that existed prior to Sarbox. If you're making the decision to go public or stay private, Sarbox is very unlikely to be a deciding factor. Hence, bringing it up is something of a red herring IMO.
EDIT: In response to below, I haven't read Sarbox, but I'm pretty sure it has no provisions regarding building a new HBase messaging system or online user privacy.
Respectfully, I'm pretty sure you need to read up on SOX before you talk so stridently about it. SOX most definitely does increase the costs of going public to a point where it changes the types of companies that do go public. In the '90s, companies went public with little or no revenue. In the 2000s, you can't get anyone to underwrite you until you pass a fairly high 8-figures revenue threshold.
Which Facebook has. So why arent they public? Obviously not the monetary cost of SOX. It could be one of the toher parts of SOX (such as the regulations on public company execs) but I find it hard to believe the cost of the accounting department is the reason Facebook isn't public. There are thousands of companies smaller than Facebook being traded every day and they're not going backrupt because of the accounting costs.
Even without SOX, there were a lot of reasons to remain private. On the margins some companies remain private because of SOX costs. (If SOX is preventing useless companies with 0 revenue from going public I see that as a feature and not a bug). But on the scale of Facebook, the costs are not important. So there are other reasons driving this, not SOX.
You're right; Facebook easily can go public. I think the subtext is, had SOX not happened, it's very likely they would already have gone public.
What I'm suggesting happened was, SOX took the IPO mechanism, which was a common and easy path to liquidity for VC, and made it a much bigger deal --- not just because of the regulatory burden that it imposes, but also because it washed out many hundreds of companies that might have gone public instead of taking a C round.
Being one of a small number of standard bearers for tech's return to the public markets is a different thing than being one of the best of hundreds of tech companies at varying stages of growth on the market.
But that's a decision on the part of the person doing the underwriting, right? You're describing psychological factors that have nothing to do with the cost of doing the underwriting.
Are you saying SOX tripled the cost? 10X?
If not for SOX, are you suggesting that pets.com would have a successful IPO today?
Yes, if it wasn't for SOX, I think a lot of companies no more sound than PETS.COM would have gone public. They'd have lots of users, moderate and consistent revenue, but no real prospects.
You continue to focus on the cost of Sarbox, but what if the real objection is that increased regulatory requirements would slow down a company that famously has a core value of moving very fast?
Fannie Mae and Sarbox are tiny, tiny pieces of their respective puzzles. Blowing them up because it's ideologically satisfying is thinking with your amygdala.
(BTW, the "big government / little government" argument exists entirely in the heads of the ideologically pure. The rest of us are more concerned with the "works / doesn't work" argument, on a case by case basis.)