As the stock market staggers in the aftermath of the September 11 terrorist attacks, the Enron and WorldCom accounting scandals, and Eliot Spitzer’s politically motivated assault on Merrill Lynch, the state’s Democratic gubernatorial candidates are launching yet another attack on the heart of the New York’s economy, the financial industry. First out of the gate is Andrew Cuomo, who announced a proposal yesterday to use the New York Common Retirement Fund as a tool with which to address what he sees as the shortcomings of corporate America. In essence, he is proposing that New York State’s $112 billion pension fund be employed not to cover the state’s obligation to its retired employees, but as a means of scoring political points.

One might expect better from H. Carl McCall, the state’s comptroller and the pension fund’s manager, given his greater experience with the stock market — and especially after our friends at the Wall Street Journal’s editorial page praised Mr. McCall in June for his role as co-chairman on a New York Stock Exchange committee that eschewed trial-lawyer friendly reforms that would have made it easier for shareholders to sue whenever a company’s stock price fell. The Journal said Mr. McCall was “clearly no Eliot Spitzer,” and even suggested that “If Mr. McCall wins the Democratic primary, New York voters may yet have a sensible alternative” to Governor Pataki. Well, the Journal may have spoken too soon. Today, Mr. McCall is scheduled to announce new policies, along with Mr. Spitzer, ostensibly intended to bolster accountability and disclosure from corporations in which the pension fund is a major stockholder.

Such political use of the pension fund is par for the course for Mr. McCall, who recently courted the anti-capitalist left wing of the New York Democratic Party by voting the fund’s shares of Stanley Works against the company’s proposed migration from New Britain to the warmer tax climate of Bermuda — a move that would be a financial boon to the company’s stock holders, including New York retirees. It is too bad that both Democrats in the governor’s race see the stock market as a political football with which to score points, especially at a time when New York’s largest financial firms are moving staff across the river to New Jersey, and when London is rising as a viable alternative to New York as the financial center of the world. The challenge for the gubernatorial candidates is to find a way to welcome companies and economic growth to New York, not to discourage them by erecting a network of onerous financial regulations. If Messrs. McCall and Cuomo want to play at the rule-making game, they could seek the position of chairman of the Securities and Exchange Commission, or Treasury secretary. Or Mr. McCall could remain state comptroller and invest the pension by whatever criteria he prefers (our main one would be the total return, by which measure Mr. McCall has actually done pretty well). But the job of the governor is to lure business to the Empire State, not to scare it away.