Done in by reform

Doug Fisher proposed another attempt for the vagabonds bloggers in the Carnival of Journalism to tackle a single issue for the July stop in our Carnival.

He asked if we might write upon this theme:

What changes will need to be made in national and international legal systems to help the digital age, and especially journalism in the digital age, flourish?

Fisher is a South Carolina journalism professor and I’m glad that is not an essay question on my final exam. I fear I would flunk.

At the risk of sounding a bit like Ron Paul, the issue I choose to rail about — and rail, it is — in response to his question doesn’t really limit itself to the “digital age” or “especially journalism in the digital age.” But it does deal with the “flourish” part of the question.

The Sarbanes-Oxley Act of 2002, the legislative reaction to a string of spectacular corporate scandals that lost investors billions of dollars, continues to be a morass of utterly Byzantine regulations whose effect is the lost of billions in cash and time. You can call it SOX or you can it Sarbox if you like, I call it the scandal’s scandal.

It institutionalized with a regulatory hammer busy work reports. It forces bureaucracies of approval and review perhaps appropriate for the largest of companies onto mid-size and smaller companies. It has disproportionate costs to smaller companies. It discourages capital formation through going public and encouraged hundreds of companies to leave the public stock markets altogether.

And, based on the results, it failed to be the canary in the bird cage to billions of dollars questionable loans in the real estate crisis. One would have thought balance sheets laden with loans of dubious quality have been exposed early by the regulations in a law designed to find just such corporate financial hanky-panky with its legions of auditors and requisite financial controls. But, no.

But where is the journalism issue in this six-year-old law? Guess what, companies are laying off in newsrooms, not in audit departments.

And the IT knowledge and skills that ought to be focused on making media companies more technically adept and gazelle-like, are taking inventory and doing compliance reports.

And the continuos innovations that ought to be occurring in newsrooms and advertising departments and circulation departments and marketing departments rolls along at the speed of dollops of refrigerated honey in part from the regulatory overhead of Sarbanes-Oxley regarding IT.

Surely, the problems of mainstream media cannot be found in the briar-brush of Sarbanes-Oxley, but it most certainly is part of the insidious invisible drag on the creativity needed to remake media either from new ventures from people with new ideas and who need capital, or from the reinvention of the struggling traditional media.

To flourish. the reformers’ law needs reforming.

(Update: Steve Yelvington did my post in 140 characters … via Twitter.)

Read all the July Carnival of Journalism pieces at Fisher’s Common Sense Journalism Web site.