Nicole Gelinas of the Manhattan Institute had a really great post on The Corner yesterday concerning the recent deal between Goldman Sachs and Facebook. Gelinas analyzes the situation very well, but fails to ask a key question: why isn’t Facebook going public? Why bother with this arrangement?

Going public involves incurring a very high cost of compliance. I was disappointed to see that the blog post doesn’t mention Sarbanes-Oxley. After all, since this act was passed in 2002, IPOs have steadily declined in the US, with some US companies listing in places like Frankfurt instead. Yet it is more than that, these regulations, even when complied with, are a foot in the door for all kind of government pressures. So,while we’d be better off with open markets, the answer isn’t to shove SEC regulations further. Rather, it is to deregulate public markets. (Maybe that will be her next column, who knows! As an aside, I truly love reading her work.)

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