Last week I posted about the kvetching and cavilling over Sarbanes-Oxley, the corporate transparency act passed in response to Enron and other boardroom scandals. Senator Schumer and Mayor Bloomberg were the latest to throw their lot in with the anti-government conservatives and the panicky Wall Streeters, predicting economic doom for America - and New York in particular - if SOX were not "reformed" to within an inch of its life.

The Wonkster points to this week's James Surowiecki column in the New Yorker, which provides a number of nice big grains of salt for you to take with all that criticism. Surowiecki outlines some of the many different reasons why companies seek out foreign markets for IPOs, and points out that attracting foreign listings is not necessarily indicative of economic health anyway. He goes on:

And there is no evidence that America’s attractiveness to investors has diminished. Its share of global stock-market activity in 2005 was actually three points higher than it had been a decade earlier. In the same period, the market capitalizations of the New York exchanges rose almost twice as fast as the market cap of the London Stock Exchange. And, according to the New York report, if you look at the annual growth in equities—which is what Sarbanes-Oxley would presumably be a drag on—you find something unexpected: from 2001 to 2005, the U.S. market grew significantly faster than that of Europe or the U.K. Does that really look like an industry crippled by regulation?

There’s no doubt that Sarbanes-Oxley is an imperfect piece of legislation, but it is not a harbinger of doom for America’s capital markets, and we should be skeptical of any analysis that says it is. Wall Street, after all, has greeted practically every important market regulation introduced in this century with howls of dismay and predictions of disaster.

The right-wing ideologues will always attack corporate regulation - even when that regulation ultimately contributes to the health of the market. And New York politicians will always feel pressure to bend to the manias of Wall Street.

But let's not forget why Sarbanes-Oxley exists. It exists because ordinary people lost their jobs, their pensions, and their futures thanks to shady accounting and irresponsible corporate governance. It exists because no economy can prosper without strong investor confidence. It exists because sometimes the private sector only works when government sets boundaries.