A Stitch in Haste

"London has a 26.4 per cent share of the global IPOs in which $1 billion or more was raised this year. New York has only 6.5 per cent. In 2001, the year before the Sarbanes-Oxley Act was passed, London had 8.7 per cent to New York’s 59.1 per cent, according to Thomson Financial. ... Many non-US chief executives have balked at the rules, which require them to take full responsibility for their accounts and can take thousands of hours and cost tens of millions of pounds to comply with."
--Times of London, 28 September 2006

It became necessary to destroy Wall Street in order to save it?

But have no fear — Bloomberg is here!

Michael Bloomberg, the Mayor of New York, is so concerned about the Big Apple ceding its status as the world’s financial centre to London that he has appointed consultants to look at the problem.

Mr Bloomberg's Economic Development Corporation, which is paying $600,000 for the project, may take a range of measures after the two-month investigation by McKinsey, the management consultancy. The measures could include putting together a committee of heavyweight Wall Street bankers to fight New York’s corner and lobbying to change some of America’s financial regulations, a corporation spokesman said.

Yeah right, good luck with that (especially considering that it's my tax dollars that are underwriting it).

Here we see the failure of hack politicians at all levels and across all time periods. Washington, in a binge of the Politics of the Warm Fuzzy Feeling, passed an insane law that is causing global firms not to list their securities here, and local firms to do the same (i.e., via a frenzy of management- and investor-led buyouts). When oh when will Congress repeal the Law of Unintended Consequences?

The local hack politicians of New York City, meanwhile, have for years — decades, generations — been content to lazily suck at the teat (leech at the blood?) of Wall Street to finance their limitless need for fiscal recklessness.

But City Hall is not more powerful than Capitol Hill, and Gracie Mansion is not more powerful than the White House. The whining of Mayor Bloomberg and his hired mouthpieces will not get Sarbanes-Oxley repealed — not even Wall Street itself has been able to achieve that.

What may, someday, force Congress' hand on Sarbanes-Oxley will not be New York City's increasingly tax-deprived fiscal woes, but a different, near-Randian phenomenon: the disappearance of corporate directors. It is now in some ways an irrational act to become a non-management director of a publicly-traded company. The pay is unexciting, stock options aren't what they used to be. Oh, and you can go to jail if anyone, anywhere, in the company screws up the books, intentionally or even accidentally. Would you agree to that deal? I wouldn't.

(Via Samizdata.)