- The Washington Times - Thursday, June 2, 2005

Quickly following the resignation of Securities and Exchange Commission Chairman William Donaldson, President Bush yesterday nominated Rep. Christopher Cox, a former securities lawyer, to take over. If confirmed, Mr. Cox would be the third SEC chairman in the Bush administration, and we have little doubt that three times will be the charm. Mr. Cox, who has distinguished himself in Congress as a free-market conservative with a head for numbers, is a fine choice to lead the wayward SEC in the post-Enron-WorldCom financial world, which is in desperate need of some balance.

Following the eruption of the corporate scandals early in Mr. Bush’s presidency, the nation — and Washington in particular — overreacted. Stricter enforcement of existing regulations was indeed needed, but the demonization of corporate America and the passage of Sarbanes-Oxley were the wrong solutions. Mr. Donaldson was brought in to steer the ship aright. Unfortunately, his tenure at the helm poorly reflected the administration’s view of deregulation.

To be fair, any SEC chairman is asked to perform a difficult task: Instill confidence in investors through regulation but not to the point of stifling vigorous economic activity. Currently — and somewhat understandably — the commission leans toward the first category. Instead of targeting individual executives who had broken the law, for instance, the Donaldson SEC went after the entire corporate world. But the time has come to restore balance to the SEC and reinvigorate economic growth. Our sense is that Mr. Cox will recalibrate the regulatory meter away from the tendency of his predecessor.

The only downside to Mr. Cox’s nomination we can see is that the House will be losing one its finest members. While currently the chairman of the Homeland Security Committee, Mr. Cox has a long pro-business record which includes sponsoring tax-cut and deregulation legislation. Opposition to Mr. Cox from labor and consumer groups goes all the way back to 1995, when he sponsored the Securities Litigation Reform Act, which sought to limit frivolous lawsuits by shareholders against businesses. Undoubtedly, these groups will pressure Democrats on the Senate Banking Committee to aggressively oppose Mr. Cox’s nomination.

But Mr. Cox is no stranger to the Senate confirmation process. In 2001, Mr. Bush considered nominating him for a seat on the 9th Circuit Court of Appeals, but never did after Senate Democrats, who were the majority, signaled their opposition. For the economy’s sake, we trust this time Mr. Cox will enjoy a swift confirmation.

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