State of Innovation

Patents and Innovation Economics

Sarbanes Oxley – The Medicine is worse than the Disease: Part 2

None of these securities laws were able to prevent the stock market decline of 2000.  Sarbanes Oxley was passed in 2002 in reaction to several corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, and WorldCom.  The legislation set new or enhanced standards for all U.S. public company boards, management, and public accounting firms.  The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law. Continue reading

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June 18, 2009 Posted by | -Economics, -History, -Legal, Innovation | , , , , , , | 1 Comment

Phoenix: Mythical Fed Chairman Muses on the Economic Growth of the 90s

Phoenix: Mythical Fed Chairman Muses on the Economic Growth of the 90s

The Federal Reserve Chairman was sitting in his office contemplating the fantastic problem that he and the other fed governors were trying to solve.  The Federal Reserve, since its inception in 1913, had never faced such a dilemma.  Huge federal budget surpluses were likely to wipe out the federal debt in the next couple of years and the fed chairman was concerned how the Federal Reserve was going to control the money supply.  Buying and selling treasury notes was one of the major methods the Federal Reserve used to control the money supply.  Controlling the money supply was necessary to control inflation, ease recessions and deal with banking crises, such as 1930’s style runs on banks.  The Federal Reserve buys treasury bills when they want to increase the money supply and sells treasury bills when they want to decrease the money supply.  If the federal deficit was paid off, then the Federal Reserve would have difficulty using open market operations to control the money supply.  The Federal Reserve could still alter the discount rate or the required reserve ratio of banks to alter the money supply, but open market operations have a more immediate. Continue reading

June 15, 2009 Posted by | -Economics, -History, Innovation, Uncategorized | , , , , , , , , , , | Leave a comment