America's capital markets are losing ground to foreign competition due to excessive expense and regulation.
The United States received only 6.9 percent of the funds raised in global initial public offerings in 2007 and did not participate in any of the top 20 global IPOs, Harvard Law School Professor Hal Scott said at the U.S. Chamber of Commerce's second annual capital markets conference.
"We found U.S. public markets had increasingly become uncompetitive," said Scott, director of the private-sector Committee on Capital Markets Regulation.
In comparison, in 2000, about half of the value of global IPOs was raised in the United States, according to Scott's committee.
Scott also noted that many foreign companies in 2007 took advantage of a U.S. regulatory change that let them delist from U.S. exchanges. About 15 percent of U.S.-listed foreign companies left the U.S. markets in 2007, about three times the historical rate, he said.
We need to ease regulations and cut taxes, or businesses will go elsewhere. That's capitalism. If we keep moving towards greater regulation and government meddling, we're going to end up on the losing end of economic history.
(HT: John Rutledge.)