A GAO report warns that overzealous enforcement of the Sarbanes-Oxley Act promotes consolidation of the accounting industry, implying less competition, fewer firms to choose from, higher fees (and possibly some future casework for Justice Department antitrust lawyers). Reports Forbes.com: ”A series of mergers and the collapse of Andersen last year have reduced the number of top accounting firms capable of auditing large multinational companies from eight in the 1980s to j

From Mises to Morgenstern: The Austrian School of Economics during the Ständestaat
by Hansjörg Klausinger (Vienna University of Economics and Business Administration) 

GDP Growth Accelerates (CNN.com): “Most of the second-quarter increase in GDP was due to a 3.3 percent pace in the growth of consumer spending, which makes up more than two-thirds of the total economy. Also supporting GDP growth was a 25.1 percent gain in the pace of federal government spending, the biggest gain since 30.3 percent in the first quarter of 1967. That spending growth was mostly due to a 44.1 percent jump in defense spending, the biggest gain since a 110 percent gain in the third quarter of 1951.

“The guy is so upfront and earnest,” says Jim Griffin of ING Aeltus, quoted intoday’s Wall Street Journal ($), “it kind of makes you wonder about his motives.”

From John Herrmann, chief economist at Cantor Fitzgerald, comes this insight from a subscriber report (hence no link): “Some very creative accounting by the Administration pushed Q2 GDP growth  up to +2.4%. Following Q1’s +1.4% GDP growth rate, GDP grew at a +2.4% rate in Q2 - we  were looking for a minor gain in Q2’s real GDP growth rate to +1.4%; consensus forecast: +1.4%.

OMB Watch: “Unfortunately, if you take out federal spending on national defense, the economy only grew at a 0.7% rate.”

“Here are some reasons why, good or bad, the U.S. Labor Department’s 8:30 a.m. announcement will be as credible as the fortune you get in those Chinese cookies,” writes  John Crudele in the New York Post.

New Rules Urged to Avert Looming Pension Crisis (NYT): “The high number of pension funds that have defaulted has already severely weakened the pension insurance agency [Pension Benefit Guaranty Corporation], raising fears of a bailout. The agency finances its operations by charging companies premiums, and it still has enough cash flow to make all of its payments to retirees for now.... “

• Zimbabwe Tackles Cash Crunch (BBC): “Zimbabwe is taking its highest-value banknote out of circulation in the face of an economic crisis that has led to long queues outside banks and the widespread hoarding of cash. Finance Minister Herbert Murerwa has said the Z$500 note is to be withdrawn within 60 days, hoping to get people to deposit their notes and replenish the banks with much-needed cash.

What at first appeared to be a hoax is all-too real: the Pentagon really did have a plan to establish a website to permit futures trading in terror attacks. Responding to public outcry, the Pentagon pulled back, which makes you wonder what else a public outcry might accomplish. Perhaps there ought to be a public outcry against 7,000 civilian deaths in Iraq?