Alan Greenspan, the former chairman of the U.S. Federal Reserve, was in fine fettle Thursday, aiming sharp barbs at the Sarbanes-Oxley (Sarbox) rules governing U.S. public companies.He was the keynote speaker at AMR Research\u2019s Executive Leadership Conference in Boston. Greenspan stepped down from his role at the Federal Reserve in January after heading the agency for 18 years. In a wide-ranging look at the U.S. and global economies, Greenspan gave his take on Sarbox legislation, which was implemented in the wake of major corporate accounting scandals.A lot of financial reporting is less of a historical record and more of a forecast, according to Greenspan. "What the chief accountant creates is a work of art," he added to audience laughter. So, requiring chief executive officers and chief financial officers to sign off on company accounts is a good thing, he said, since they have the best sense of where the value of a business lies.However, he described Sarbox Section 404 as a "nightmare" and extremely costly. That section requires a company\u2019s auditor to attest to the effectiveness of internal controls implemented to protect financial reporting systems and processes."What can you expect when you get virtual unanimity in both houses [of government]?" Greenspan asked. "Any bill that gets that can\u2019t be good." He believes that the vast majority of members of the Senate and the House of Representatives failed to actually read the bill, which passed largely uncontested in 2002.Greenspan is hopeful that changes to Section 404 are likely, praising the efforts of Democrats Chuck Schumer and Barney Frank seeking a re-evaluation of the legislation. Schumer, New York\u2019s senior U.S. senator, was particularly concerned about New York City\u2019s status as a financial center. "He was seeing IPOs [initial public offerings] going to London," Greenspan said.Tackling the age-old question of how IT impacts productivity, Greenspan noted that computer technology has radically changed some parts of the economy. In particular, companies have used IT to better track and manage inventory, he said. But he doubts that computerization can raise productivity at a faster level than previous technological breakthroughs. The limiting factor isn\u2019t technology, but human intelligence. "The obvious answer is we\u2019re not smart enough," he said.For IT to become more ubiquitous, Greenspan said more may need to be done to change the existing physical infrastructure globally. He drew an analogy with the move from steam to electric engines. Although electric engines appeared at the start of the 20th century, they didn\u2019t start really affecting the economy until 15 to 20 years later when companies tore down tall buildings designed to house steam engines and replaced them with flat manufacturing plants. The new plants enabled companies to capitalize on the benefits of the new technology.When asked about the pros and cons of the continuing consolidation of the software industry, Greenspan pointed to the "creation of natural monopolies" such as Microsoft. One of the reasons companies like Microsoft hold such sway is that customers are unwilling to learn new technologies after having learned to use products like the Excel spreadsheet, he said.As a former Fortran programmer, Greenspan said he was frustrated that he couldn\u2019t immediately fix things the way he wanted to when using Microsoft software. However, he eventually "gave in," and got familiar with the technology.-China Martens, IDG News Service (Boston Bureau)Related Links:\n\nHow to Dig Out from Under Sarbanes-Oxley\n\nThe Sarbox ConspiracyCheck out our CIO News Alerts and Tech Informer pages for more updated news coverage.