Your editorial "Reshaping Sarbox" (December 15), says that the Securities and Exchange Commission "deserves credit" for its current proposal to reduce the costs of Sarbanes-Oxley. So it does, but not too much credit.

Resident Fellow Alex J. Pollock

The proposal is only a beginning of the required reform of Sarbanes-Oxley--and, to paraphrase a great Briton, not even the end of the beginning. Its most important achievement is symbolic: the official, public recognition that the wasteful expense generated by an act passed in political panic needs to be brought under control.

Alan Greenspan, the former Fed chairman, recently described most of Sarbanes-Oxley as "just a cost creator for no benefit". Indeed, the key point is that since its costs are much greater than its benefits, the implementation of Sarbanes-Oxley has been by definition bad for investors.

Even an infinite number of accounting procedures and a vast library filled with three-ring binders full of risk control memoranda will not prevent cyclical recurrence of booms with their attendant frauds, and subsequent busts with their attendant scandals.

Such devices can, however, certainly succeed at multiplying deadweight bureaucracy. So the reform of Sarbanes-Oxley, now just begun, must march on, cutting the bureaucracy and reducing the monopoly profits of the accounting firms that the act has so unfortunately engendered.

Alex J. Pollock is a resident fellow at AEI.