TEXT OF COMMENTARY

KAI RYSSDAL: Treasury Secretary Henry Paulson made a big speech Monday. He said he’s worried U.S. capital markets aren’t as competitive as they ought to be. That overlapping rules are strangling American businesses. Sound arcane? Too down in the weeds for us regular folk? Not at all, says commentator Glenn Hubbard.

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GLENN HUBBARD: SCRIPT: America prides itself on getting our hard-earned savings to the best American firms and entrepreneurs in the form of investment capital. In turn, financial markets keep investors’ assets profitable and help us finance retirement, education — our very futures.

But now something’s rotten in Denmark. Back in 2000, our markets handled half the world’s initial public offerings. Last year, we handled just 5 percent. Foreign companies are shying away from listing their shares here. And American companies are going undergound. One out of every four takeovers in the past three years have been transactions that take public companies private.

When companies go private, publicly-held shares are bought out. These investments are closed to millions of average investors who now look to public markets to invest their savings.

Why is all this happening?

Some blame Sarbanes-Oxley, the get-tough law passed in the wake of the Enron scandal. But that’s not the whole story. The law toughens the accountability of corporate leaders, auditors and directors. And that’s a good thing.

But we’ve grown a little heavy-handed here with regulatory and legal interventions. The section of Sarbanes-Oxley that governs a company’s internal financial oversight may be too expensive for small businesses and may cost more than it does good at bigger companies too.

And frivolous class action lawsuits that generate large damages happen all too often. We’ve got to raise the bar on those.

But, you might say, regulation is meant to protect American consumers, more than half of whom now invest in the markets.

I’m not saying we should regulate less — this is about regulating smarter. We need regulation that promotes investor confidence without costs so high that our competitiveness is compromised. Our advantage is slipping, but we can and have to fix that.

We’ve all got a vested interest in capital markets. After all, they’re not just a source of strength for old and new companies alike, but also for the protection of investors’ hard-earned cash.

RYSSDAL: Glenn Hubbard used to run the Council of Economic Advisors for President Bush. Nowadays he runs the Graduate School of Business at Columbia University. You ought to know Mr. Hubbard’s been among those pushing Secretary Paulson to call for changes in the regulation of U.S. markets.