My real job has interfered with my blogging activities this past week, but I have been meaning to take note of this Wall Street Journal article (appearing on A1 of Thursday's print edition, and highlighted in real time by Mark Thoma):
In Call to Deregulate
Business, a Global TwistOnerous Rules Hurt
U.S. Stock Markets,
But So Do New Rivals
It begins:
Prominent figures in the U.S. are warning that the nation's financial markets have been handicapped by post-Enron regulatory overreach. Treasury Secretary Henry Paulson has made addressing the problem a signature political issue. A blue-ribbon committee chaired by former Bush economist Glenn Hubbard has echoed this sentiment, as does a report commissioned by Sen. Charles Schumer of New York and New York City Mayor Michael Bloomberg.
Their key evidence is data suggesting that U.S. stock markets are increasingly unattractive places for companies to list shares. Mr. Hubbard, now dean of Columbia University's business school, says this is the "canary in the coal mine," an early warning of the increasing costs to U.S. companies of raising money, which in turn threatens investment and growth. Their solution: a lighter touch in regulating corporate behavior.
I would also draw attention to an issue I pondered just a handful of posts back:
Are the days of the US dollar as the predominant world currency over? Maybe not. As was noted in the research of Menzie Chinn and Jeffrey Frankel cited in my 2005 post, there are many factors that determine which country's monetary assets become the leading international reserve currency. But to the question of what currency will emerge, we are increasingly ticking off items on the list that would make the answer "the euro."
Burdensome regulations that make our financial markets less attractive are at the top of that list, and in the pecking order of things to worry about regarding our global economic position I would advise thinking a lot less about what China is doing to us and a lot more about what we may doing to ourselves.