The Five Dumbest Things on Wall Street This Week

Congressional Accountants FASB overruled by 'experts'

1. Congress Has Your Number

When doctors are pondering how to treat a vexing heart disease, Congress tends to delegate the decision to the cardiologists.

When NASA has to choose a new Mars rover, Congress usually lets the engineers design the right model.

But when a bunch of accountants are determining how companies should account for employee pay -- well, all of a sudden our elected representatives figure the industry experts can't be trusted.

Yes, this Tuesday, the House Financial Services Committee voted to override the Financial Accounting Standards Board's decision to force companies to account for all stock options as a compensation expense.

The bill, which has an alarming number of co-sponsors in the House, would instead require the expensing only of options granted to a company's top five executives. Plus, according to Reuters, it would delay implementing any change for a year so that the Securities and Exchange Commission could study its potential impact.

Wow. As if the options-expensing rule, which was first proposed about a decade ago, hasn't been studied enough. As if expensing options granted to an arbitrary number of employees makes more sense than expensing all of them. Would Congress be so agreeable if, say, FASB decided that Intel (INTC) didn't report any of its debt other than the money owed its top five creditors?

The dumbest thing here, though, is how so many congressmen have convinced themselves that -- with the help of a few meetings with lobbyists and a few big-pocketed constituents -- they know better how to accurately write up financials than do the professionals who have been debating accounting theory for years.

Yes. Congress has done such a good job with the public sector's finances that it can't help cleaning up the private sector's, too. Thanks, guys, but no thanks.