Letters to the Editor

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The New York Sun

‘The Capitalist Embrace’

The New York Sun is right to note that New York capitalists can easily circumvent American regulations (and taxes). But the Sun fails to mention that they do so often at the cost of middle-class jobs right here in New York [“The Capitalist Embrace,” Editorial, May 25, 2006].

The Sun further notes in the editorial that after an international businessman takes his company public abroad, “one of the first things the businessman may do … Is buy a Manhattan condominium.” But under this scenario, the city quickly becomes the place seemingly envisaged by Mayor Bloomberg:

Wealthy international citizens treat New York as a playground, while our 500,000 illegal immigrants (without whom, Mr. Bloomberg wrote baselessly in the May 24, 2006, Wall Street Journal, New York City’s “economy would collapse”) do menial work for them.

The Sun might consider how a past change in the Wall Street regulatory environment – just as important in its time as Sarbanes-Oxley is today – affected New York’s economy. In 1975, federal regulators declared that stock brokerages could compete on commission prices; in the past, they had had to charge fixed commissions. Discount brokerages sprung up all over the nation. But most of them did not locate their jobs in New York, because they could not afford to charge low commissions and pay New York’s cost of doing business.

The New York Stock Exchange’s attempted purchase of Europe’s stock exchanges may represent a repeat for New York on a global scale: Wall Street firms today can easily compete on a regulatory basis globally if they find that the cost of doing business here is too high.

Ms. Gelinas is a Chartered Financial Analyst.

The New York Sun

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