The bear in the details

JASON ZWEIG had an interesting take in the Wall Street Journal the other day, specifically his column about the number of publicly traded companies that are disappearing. Hadn’t heard? That may be because the stock market is on an incredible run these days, as conditions ( and presidents) have changed in Washington, D. C.

But Mr. Zweig noted a detail in the stock market that some folks might have missed: The number of publicly traded companies has fallen. Far.

In 1997, there were 7,355 U. S. stocks. Now there are less than 3,600.

Why? Experts say there’s so much red tape that publicly owned companies have to go through ( each year). Then there are venture capitalists these days who can keep a private company private. And buy- outs that take shares off the market.

In the recent past, all the new laws and regulations have made it difficult to operate as a small publicly owned company in America. The Sarbanes- Oxley act ( thanks, Enron) costs public companies hundreds of thousands of dollars in compliance costs. Dodd- Frank makes it more difficult to get loans. So many of these companies stay private and get financing from less regulated lenders.

This is a real shame, since the purpose of a stock market is to provide a source of capital to young, smaller companies with new ideas and innovations. It is often these companies that provide much of the growth in new jobs and employment. Here’s hoping the new president keeps on his current path of making things easier on business. Or at least pushing obstacles out of the way for small business— which is often called the backbone of the American economy and for good reason.

It’s for these kinds of reasons, we think, that the American people elected a businessman president. Unlike a professional politician, he would have seen these kinds of obstacles up close and personal.