Why Our Capital Markets Aren't Competitive

I read with sarcastic glee this story from the Wall Street Journal about Henry Paulson's push to make American capital markets more competitive globally. The Paulson plan is nothing more than a hackneyed, trite and timeworn call for focus-group approved terms like "best practices" and the sine qua non of all modern conservatives: "modern regulatory structure:"

"To maintain our capital markets' leadership, we need a modern regulatory structure complemented by market leaders embracing best practices."

For those of you not in the know, the term "best practices" means market participants should be self-policing. And a "modern regulatory structure" is code for none other than "let us gut all regulations, including Sarb-Ox."

Nowhere in the article or Paulson's plan is any recognition of the real cause for the decline in our capital markets competiveness: greed. As I posted about three weeks ago, the reason Wall Street is losing out on listings, M&A deals and all the other goodies of globalization has absolutely nothing to do with Sarb-Ox. Can anyone honestly tell me that the market regs coming out of Brussels are less stringent than Sarb-Ox? No, you can't. The bottom line here is that Goldman, Morgan, Merrill, Citi, Bear Stearns, etc. charge excessive fees and they are losing business because of it. Greed, plain and simple.