Sarbanes-Oxley: Could This Be a Key to the Financial Crisis?

Some economists, financial experts and even Federal lawmakers are talking a lot about Sarbanes-Oxley today. What is it? The Sarbanes-Oxley Act of 2002 is also known as the Public Company Accounting Reform and Investor Protection Act of 2002. Named for Senator Paul Sarbanes of Maryland and Representative Michael Oxley of Ohio, it was passed (very quickly) in response to several corporate scandals. (Think Enron, Tyco and WorldCom.) Sarbanes-Oxley was supposed to improve standards for publicly held companies, but some believe it created too much complex government regulation.

As Congress debates the $700 billion bailout plan, some experts say rather than essentially handing over a blank check to fix the problem, why not suspend some of the stiff rules included in Sarbanes-Oxley. This would free the market up and un-freeze sub-prime bonds so that companies could finally unload them.

Take a look at what Dave Ramsey and Economist Brian Wesbury say about this possible solution. What do you think? Do you agree with the $700 billion bailout plan?