If You Regulate Something, You'll Get Less of It
Fact: NYC has 8 million people, but more than half the wages and salaries are collected by just a few hundred thousand workers in the financial services industry; and the businesses that serve that industry, such as law firms and printers, account for much more.
Fact: From 2002 to 2005, London's financial-services work force expanded 4.3%, while New York City's fell 0.7%, or more than 2,000 jobs.
Reasons (according to a recent McKinsey & Co. report):
1. The American regulatory framework, particularly the Sarbanes-Oxley Act, is "a thicket of complicated rules, rather than a streamlined set of commonly understood principles, as is the case in the United Kingdom and elsewhere."
2. The legal environments in other nations "far more effectively discourage frivolous litigation."
3. Immigration restrictions that make it difficult for skilled workers and foreign business visitors to come to the U.S.
Read the WSJ article here and the IHT article here.