Are Regulations Killing the Recovery?

The struggle to revive the IPO market is a microcosm of the larger debate: Is government regulation strangling the economic recovery?

IPOs — “initial public offerings” of stock to outside investors — occupy a special place in the folklore of American capitalism. We are, it is said, the world’s most entrepreneurial nation. People with new ideas can raise money, often from venture capitalists, who can recoup their investments many times over through an IPO if the company succeeds. Down that path have traveled Apple, Starbucks, Home Depot, Genentech and many others. But if early investors can’t cash out, they won’t invest in the next round of startups.